This Pitch Deck Raised Millions for a Firm Guaranteeing Rent to … – Business Insider

It was late 2021, and the founders of Doorstead, a tech-focused property-management company, were losing sleep.
Their worry: What would happen to housing and the throngs of landlords who relied on high rents and cheap financing if the Federal Reserve began raising interest rates?
With inflation quickening, Fed rate hikes seemed likely. So Ryan Waliany, Doorstead’s CEO, and Jennifer Bronzo, its chief operating officer, shifted their focus at Doorstead to a more-conservative one of profitability and cash flow, instead of growth.
“At first, we got gaslighted,” Waliany told Insider. “People didn’t want to believe that the economy and the market was changing. They wanted the status quo to continue.”
But as the executives’ fears began to play out in the economy, they felt vindicated.
Investors, also aware of deteriorating markets, turned to recession-proof strategies. One of those seemed to be Doorstead’s model to backstop rent payments, Waliany said, adding that perspective probably helped them raise money as others in the property-management sector turned to mergers to stay afloat.
Doorstead this month raised a $21.5 million Series B round led by Avanta Ventures, the venture arm of the insurer CSAA, with additional funding from the proptech specialists MetaProp, M13, and Madrona, as well as the former Opendoor executives Eric Wu and Tom Willerer. The company used some of its funds to acquire the assets of the venture-backed property-management and -investment startup Knox Financial.
Unlike some managers of venture-backed single-family rental properties, Doorstead’s focus is entirely on mom-and-pop landlords who own more than 90% of their single-family rental properties, instead of the deep-pocketed Wall Street owners who took the market by storm over the past decade. Its main selling point is guaranteed rent on most properties.
It works like this: Once a landlord reaches out to Doorstead, the company offers a guaranteed monthly rent rate in exchange for fees. Doorstead pays the entire rent if the home remains vacant or makes up shortfall when discounts are offered. If there’s a premium to the initial rent, the owner keeps that extra cash. 
Doorstead profits from a 50% tenant-placement fee in the first month and then an 8% management fee on the properties. While guaranteeing rents can be risky, the promise results in greater occupancy rates because the property manager and the landlord are aligned in their agendas, Waliany said. 
“One customer lost $20,000 in rent because their former property manager sold a promise that couldn’t be fulfilled by the market,” Waliany said. “We filled the vacancy in 34 days.”
The combination of the rental guarantee and property-management services has helped the company attract property owners seeking passive income.
“Now our owners can set it and forget it,” Bronzo said. “We’ve taken a stressful piece of their lives and made it something they don’t have to think about.”
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