Commercial real estate is a notoriously complicated prospect. Borrowers may not always know all the potential options they can pursue. Getting the right borrowers and lenders connected is also difficult and time-consuming.
Janover Ventures wants to simplify that process and bring it fully into the Internet era. We sat down with founder Blake Janover to talk about his vision for commercial real estate, his team’s intense drive, and why equity crowdfunding was the perfect fit.
Can you give us a brief elevator pitch for your company?
We’re a technology-enabled commercial real estate financing marketplace, sourcing borrowers through our wide net of educational-based websites and placing them with the best commercial property and business lenders in a closed ecosystem. You can learn more on our campaign page at: https://republic.co/janover-ventures.
What inspired you to take the leap and build this company?
I was doing some “finding myself” time in a small fishing town in the Dominican Republic for a year or so. My personal background is in real estate capital markets, and I ended up having a serendipitous call with an old friend about multifamily financing. I had owned a residential and commercial lending and advisory institution in the last real estate cycle so it was a business I intimately understood. Anyway, I hopped on Google to see what the most recent trends were in multifamily capital markets and the results were disappointing to say the least. There was no easy way to access and digest data out there… So I bought a nifty little domain, “multifamily.loans”, and built a website laying out all the basics. There was no plan in mind other than to build a universally helpful resource for anyone in the same conundrum I found myself in. I was, and am, simply a geek for digital & tech trends and economics and capital markets… I always will be. Anyway, I build this website, crawl it and am almost instantly ranked #1 on Google for “multifamily loans” and dozens of other search terms. My phone started to ring and I started to build more sites and begin my migration back to “civilization.” The story is a good deal longer and more involved than this but the heart of it is: I wanted to create a place for multifamily and commercial real estate owners to access all the information they need in a simple, well-organized website and to empower them to make the best financial decisions possible for their businesses. Fast forward to June 2020, and we’ve arranged more than $100,000,000 in loans YTD and have had billions of dollars in online loan applications. Whoa.
What past experiences prepared you to start, build, and lead your company?
My preparation was owning an innovative real estate finance company in the last real estate “cycle.” I was young, in my early 20’s, when we got meaningful traction and similarly young when global financial markets combusted and real estate prices caved in on themselves. I learned countless valuable lessons about humility, leading in a crisis, how to pivot without ensuing chaos, and the list goes on. As Mike Tyson so elegantly put it: “Everyone’s got a plan, until they get punched in the face.” Well, having been punched in the face so many times, I’m better prepared to maneuver just a tiny bit more [like] Mohammad Ali and a good bit less [like the] Three Stooges these days.
What is your vision for the future of the industry you are operating in?
My vision is to reduce the need for people on the client-facing and credit side of things. I believe the future is one where outputs are highly automated and low touch in intuitive environments for client engagement, loan processing and underwriting, and where people are in the background of the industry innovating, designing and creating. I think that our industry is stuck in Wall Street, the 1980s movie with Michael Douglas (you know where “lunch is for wimps” and his cell phone is the size of Hulk Hogan’s hiking boots? I digress). The point is, we can improve efficiencies while reducing frictions and costs across the board. In the long term it also means an improvement in long term loan performance and [an] increase in everyone’s net happiness. There’s a ton of space for a lot of folks to innovate and improve here without stepping on each other’s toes, and I’m excited to see how it plays out.
Who is on your team and how did you come together?
Our team is super culturally and cognitively diverse. As a consequence, the outputs of the team are greater than the sum of the individual players, and it’s quite cool in action. We’re a bunch of ragtag marketing, capital markets, engineering and management geeks that, as per the previous summary, transcend verticals and specialties. We came together slowly as we hired contractual specialists to fill needs. After running through countless people, we were able to identify the best of the best that fit with our values and culture… And we cultivated those relationships. Now as we approach 20 team members, it feels as much like a family as it does a company, and that’s pretty neat stuff.
Do you have any competition, if so, how do you differentiate?
Sure we have lots of competition, but nobody is doing it quite like us. Some of our differentiators are:
- We own lead generation in the sense that we own a digital media platform consisting of high-value, high-traffic websites in our niche delivering unique, educational content to our users and leading to us owning the top of the funnel.
- We develop proprietary technology that allows us to aggregate, enhance, score, distribute and engage with more leads per human and at a faster clip than any incumbent we know of.
- We work with our partner-lenders and intermediaries that have, in aggregate, a wide box. And as such we are able to empower more borrowers and create superior unit economics than traditionally possible in our industry.
What does your business model look like?
Our business model exists in two pieces and we have two sets of clients: borrowers and lenders. Here is a quick breakdown of those two parts:
- Low touch: borrowers enter our platform through our network of websites and, via our closed-ecosystem, connect directly with lender-sources. We sometimes provide concierge advisory, packaging and underwriting services in the middle to enhance the transition to the lender-partner. In this environment we are most times comped by the lender who is sharing in revenue with us. The value-proposition and theory for everyone here is that (1) the borrower gets access to a lenders, terms or loans that he did not have access to before; (2) the lenders get access to a new borrower that they would not have had access to; and (3) the lenders make lower net unit economics since they did not need to go through the expenses of acquiring that client and any savings are passed on to the client.
- High touch: We roll up our sleeves and do high-value consultancy work which may include deep underwriting, developing financial models, creating proprietary loan packages and aggressively shopping for debt. Think of it like a capital markets concierge service for complex or large commercial mortgage transactions. We primarily undertake high-touch opportunities for large loans (generally over $10MM) that have a good story but may not fit with an existing partner-lender.
What brought you to equity crowdfunding and how do you intend to use the money you raise this round to scale the business?
There are a lot of reasons. The standout is that it matches with our values and vision for democratizing capital markets… “Flattening the curve,” as they say now. We chose Republic specifically because we believe them to be the highest quality CF platform on the market (not to take away from other premium players). There are a lot of other reasons too. Here are some of the standouts:
- We are deeply aligned with the idea of embracing technology to level the capital markets playing field.
- We want to give all of our clients and users an opportunity to invest in us, grow with us, and hopefully evangelize our cause along with us.
- We believe in the power of people and what’s more powerful for a growing company like ours than a deep and diverse group of humans that want us to succeed?
- We want to raise money, duh. We want to accelerate our growth and invest in building our team [of] engineers, content writers, project managers and more. We have what we believe to be a significant lead, and we want to expand that moat.
- We aren’t ready to cede control to “the man.” There are a lot of restrictions and potential misalignment that come along with institutional investors. We’ll get there but right now we want to be nimble and in complete control of our destiny. A Crowd SAFE ensures that we can continue to blaze this path and iterate without hierarchy.
What do you want potential investors to know about you and/or your company?
That we are tough on ourselves, hold ourselves to the highest standards, are deeply-goal oriented, and we have every intention of building something special and be game-changing in our industry. Our goals are lofty to say the least but I recall hearing an expression to the tune of “long shots are never as long as they seem.” I tend to agree.
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? have you set any future goals for the company?
First answering the 5-10 year question… We have tons of exit opportunities in our opinion, all with a really good story. An IPO of course would be super cool unless LTSE turns public markets on their head, in which case we would love to review the idea of an offering on their public market platform. I think we’re an excellent positive cash flow buying opportunity for a number of PE firms. Lead aggregators like Lending Tree are trying to break into business finance which is currently performing as their biggest growth market, and we would be a segway into the commercial property side (to supplement their business and residential lead generation efforts). There are many REITs and lenders out there that we digitally power who I think would be interested in owning us.
As far as future goals, we have a lot of them… We’re an extremely goal-oriented shop and follow some of the sound principles set forth by Verne Harnish in Rockefeller Habits. We have weekly, monthly, quarterly, annual and long term goals, all of which drive each other. We aim to be the first and most frequented digital touch point for commercial property borrowers across the nation.
We are excited to see where Blake and his team take the company. Janover Ventures is currently raising on Republic.
About: Olivia Strobl
Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.