LeaseLeads Revenue & Valuation (2024)

guys there you have it launched an agency helping real estate or those in real estate launched their own websites back in 2015 to 300 can sales then grew that agency to about call it a million point seven 1.7 in Revenue before saying you know what I want to go build the software thing because other agency co-founder kept the agency kept a little Equity but now David split off and built lease leads dot Co which is effectively templatized websites for these folks but also more importantly apis and Integrations that allow them to update their sites automatically they've got 70 customers paying on average or they're doing about 80 000 a month right now all in on Revenue 25k of that is pure SAS the rest is productized service but churn's almost non-existent because they spend so much setting up and integrating and onboarding those 70 customers hey folks my guess it is David freund he's the co-founder and CEO of lease leads he boasts a virtual leasing agent that helps to increase tours and leads for multi-family properties more than 300 percent he lives in Denver Colorado also a competitive Enduro mountain bike raker musician and coffee snob David Ray takes to the top let's do it all right what what makes your coffee choices snobby um I live really close to this place called sweet Bloom that is absolutely phenomenal um and when I don't get it from there I order from Onyx on benville so I guess it's a little bit of the price point but um I've gotten really picky about my coffee it's amazing I I many times will go to Denver just to work at a Union Station for a day during the holidays it's so pretty there and uh I would just get whatever coffee is nearby but this is cool okay so where are you like an ex real estate agent or what got you into this space how did you learn about the problem so actually we've been in web development for real estate for probably six years or so and we've been working in the API space really nerdy granular API space all these guys use all these different systems to feed in floor plan data you know rent's always changing especially here in Denver availability things of that sort but it would never display on their website you either use kind of the crappy websites that they have out of the box or you get a big custom site but the problem is the data is static so really early on we got really into the API space and uh really saw a problem with this dynamic dynamic information on both the website and a lot of the conversion tools that were out there so that's really so were you I mean were you did you get exposed to this were you running an agency building custom websites for agents exactly yeah I was running an agency for about five five or so years before this to what you launched in 2015. yep and have converted it slowly and then really aggressively this past year into more of a SAS type product there's still a pretty heavily service based component with the website development but you know as you've probably seen through our site like we've standardized a lot of it through templates yeah that's super interesting so 2015 the first year of the agency do you remember how much revenue you did I think the first year we did about 300 000. that's awesome for your first year that's super cool yeah okay so what did you scale the agency up to how many people full-time as of like what 2020 I guess so when we started we were really really big on the freelance model so I would say it's a little bit skewed if I give you the full-time numbers we got to about nine um and I I recently split off with my business partner because he was mostly focused on the SEO side of things but we got to about nine full time but we had a freelance team of almost about 50 people and those are like vetted thoroughly vetted like extended team members uh for freelance there that's wild okay so your best you're at the agency maybe what was it 20 20 in terms of Revenue 2020 uh we did about one points uh about one and three quarter million Revenue one one and three okay one point seven five something like that yep and then and then walk me through I mean some of the most successful stats can they start off like this is an agency but there's friction right you have a co-founder what if they want to stay with the agency and you want to do SAS how do you split it does the agency own any portion of lease leads like how did you do that negotiation oh my gosh I uh we could spend a lot of time there but it was super fun I learned a lot about business structure and selling assets and defining value of them it was it was hard in the moment but it was one of the best learning lessons I've ever had um you know I would say my business partner at the time we definitely wanted to strangle one another but now we just we're on great terms we love one another um I stay in touch with him every quarter he's crushing it with his business um but so who owns the agency today do you guys still own the agency together or no you shut it down yeah so he runs the SEO agency it's called intergrowth um and they are they're doing really well last time I talked to him um he's just wanted to stay more on the agency side of things and I really wanted to double down in a SAS Venture I saw the opportunity here and I had a lot more kind of knowledge and exposure in the API and development space along with my business partner Dylan so that's really where I jump full-fledged into this so interhyphengrowth.co was is the agency you got it yep okay so you own no equity over there anymore no profit sharing no nothing I actually do I own some help yeah as part of the transfer um my my shift was making into a parent company and kind of a holding company for all of our different Ventures and in in part of that was getting samasa or uh getting some oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret valuation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your founder path dashboard this is all free by the way is because depending on who's doing the buying of your SAS company you're going to get a different valuation a VC is going to pay a different valuation private Equity Firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when I hover over here here right so the teal is what a VC would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on YouTube all these datas are built from real-time valuation data points Founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of SAS valuation than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the YouTube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform I hope to see you there all right let's jump back into the interview interesting yeah okay so so what about the spin out how do you keep a clean cap table for lease leads is the agency on the lease leads cap table uh the intergrowth is not at all no association there um I was able I was able to do a clean cut buyout for that interesting okay so you plus your co-founder that you found who is not related to the agency are now 100 of lease leads you got it okay very cool this makes a lot of sense okay so question for you for your first customers on lease leads do you have permission to sell to folks who are customers of the agency I do yeah they're one and the same so really what we did is uh the the agency model that we were doing web development for um we brought over to lease leads so we really turned it into a recurring product so what we found out was they want this pricing information coming through and they want their leads going to their portal and then we also added some things like Source attribution you know telling them what the user is actually doing on the site what floor plans they're looking at what amenities they're looking at um so a lot of those things we were able to pass through to the uh systems that they're using so exactly that yeah that makes a lot of sense um okay so let's fast forward to lease leads today right so what what are what are customers paying you on average per month to use the technology yeah so there's ability if they do a website and there's some different options based on the templates they want to use those range anywhere from five to six thousand dollars for the initial build and then there's a recurring fee the lowest recurring fees 200 a month and that's just going to cover like keeping the engine up feeding the data to and from your systems that you're using back to the website so the whole thing we sell is you don't have to update your website you know there's there's really no reason for you to log in unless you're going to do content updates um but other than that it's going to be purely API data feeding from exactly what your your ilm or or your property property management system says there but then the virtual leasing agent which is kind of our I would say our Flagship product that's really taking off is that conversion project uh product that lives in the corner of the website um that one's going to be 350 a month there going to be so that one you don't have any customers for yet oh that one is sorry sorry for this live yeah we have about 70 customers total on that oh wow okay so you have 70 customers paying 350 bucks a month already that's great okay so that's what was that 24 500 a month in Revenue there already right yep that's awesome that's awesome okay and then and then that's on top of I assume if they pay you the 350 a month fee they have to also be paying the 200 a month fee right for the website so we merge them together for a different package uh we are you know we're learning every day so we are rebuilding a different package for both of those services but um it does include that they feed within that virtual leasing agent as well oh I see I see okay so is the right way to think about as to say is the right way to think about your mrr today you're doing about 25 000 bucks a month in Revenue All In yep um so in recurring Revenue now we do have a pretty heavy service based component still um because we inherited like I was mentioning previously We inherited a lot of the agency services that we were doing previously for web builds we do a lot of custom builds outside of the templates custom API Integrations that aren't necessarily they don't fall in the recurring bucket like our productized offerings yeah so all in we're doing about uh 80 000 a month in total that's awesome I love this model because I want to ask you a question how many of your customers have turned uh very few it's been great yeah because they're kind of sticky it's a pretty sticky model with the data so um you know it's probably less than one percent I would say it's been early on so far with the recurring but in terms of yeah because because of sun costs right if they pay you five grand to set up a website and they cancel two months in they don't want to cancel you they just spent five grand on a website exactly we also pull the API feed too so they get their data it's not like we pulled down the site but the data doesn't update anymore so if they're floor plans change the pricing changes it's really contingent on that this is the Counterpoint guys the VC argument that you shouldn't sell Pro Services inside of your SAS I would always argue the opposite which is if you touch a SAS sale with a big upfront fee like 5K they're just not going to churn you're not dollar 10 is going to be through the roof and you're seeing that here with David David You can disagree if you want but you know you're a smart guy I totally agree with you I know yeah interesting so 80 grand a month I mean so will you guys do a million bucks in Revenue this year all in uh I would say yes in a in a trailing 12 month we had a little bit of a slow start but yeah if you take a trailing full month here towards the end of the year we'll we'll be looking at a million dollars and when did you launch lease leads was it this year or last year officially in January this year that's interesting yeah so so were you still making money last year based off salary from the agency spot on yeah okay so you guys just did this split early this year yeah exactly very very new in that sense so a lot of the services that were already occurring like the web development services those were brought over uh we've tried to productize as much of them as we can as you know you can't throw everything in a template right you can't yeah that's kind of where I would I would totally Echo that service based sentiment is like these guys you know this industry especially at the Enterprise level I don't think you can always fit them in a template now a lot of these companies have custom solutions for multiple feeds I just got off a call earlier where uh client uses you know a CRM for one component but then they use like two separate data feeds for their property management so it's you know you do have those instances that come through and you can't necessarily throw them in a in a recurring template so to speak yeah that's wild what's the how many folks are full-time on the team today uh right now it's six full-time uh some of them went over to the SEO agency when we split so six full-time on our team and then we still have a pretty substantial amount of Freelancers that we work with anywhere from how many uh content loading QA Specialists uh some part-time web developers but we have about 15 Freelancers I'd say in total and so like everyone wants the superpower of like finding cheap Talent that's like really talented right so like how are you finding these free for example how do you where did how did you find your good content Freelancers yeah so we vet very very intensely I would say we vet obviously better in the spaces that we know best with our development um content wise I would say that was a labor of love over the years just working in the agency testing different relationships things of that sort uh we found our folks that work really well uh what's the top of funnel there is like upwork five or others and then if they do a bunch of work for you bring them off those in marketplaces and into your network directly exactly so we you know we test for like initial questions you know how many hours are you looking for personality fit you know we obviously move quickly how do you measure that oh we have a type form that we that we uh use you know you try to standardize it for each for each role especially for development we can get pretty specific with that like what's your vision of you know X Y and Z code base you know what frustrates you most about say WordPress as an example um so we do a lot of betting around that and then like we ask for specific test examples of their code before we even get a call with them to evaluate new steps interesting can you send me the type form you use for con hiring content people Freelancers yeah for sure I would love that I'll attach it to the show notes so you guys can see how David Betts content folks that's interesting absolutely um very cool okay so team of six now have you bootstrapped at least leads or be raised totally bootstraps yeah we uh we strapped from day one I took the cash from the agency and rolled it over into this Venture that's smart but but the agency's not on your cap table right so how did you take that cash or that's like your personal cash you made from the agency yes yes yeah are you all in did you invest all your savings 100 into Visa at least leads uh no not all of it um you know it didn't take much I feel like the you know when you have a really really solid team especially our CTO Dylan it doesn't take much just takes time and a really narrow scope of what you want to build for an MVP so that was a big thing like you know pushing out all the other features on the nice to have lists and being like what's the core solution we're trying to solve here especially with the virtual leasing agent because that was kind of the unique value you probably really wanted to get to Market did you win Dylan's put Equity 50 50 at the start or you took more because you're bringing in customers we did not no we we split it a little bit differently um just because uh you know ideation kind of premium and bring it to customers and things of that sort yeah so you own more just to be clear yeah yeah okay very cool let's wrap up here with the famous five number one favorite Business book favorite Business book I would say the obstacle is the way I think it's a beautiful book from Ryan holiday number two is our CEO you're following or studying see you know following or studying at this point I would say I like darmesh from HubSpot I really like everything he has to say I also like Brian Halligan but uh darmesh is just so philosophical one insightful I love that guy number three what's your favorite online tool for building lease leads favorite online tool I'd say figma that's kind of a weird one but figma's just the coolest tool for me number four how many hours of sleep do you get every night eight hundred against sleep that's good and situation married single kids uh you cut out there a little bit Yeah Yeah married single kids oh married married any kids no kids yeah yeah my uh that's a question you have to say that's a question you want to get right by the way yeah no kids right now no kids right now we're uh we're working on it slowly uh life's awesome and David how old are you I'm 33. last question something you wish you knew when you were 20. uh something I wish I knew when I was 20. yep uh things take time patience is patience and persistence is virtue over everything else guys there you have it launched an agency helping real estate or those in real estate launched their own websites back in 2015 to 300 can sales then grew that agency to about caught a million point seven 1.7 in Revenue before saying you know what I want to go build the software thing because other agency co-founder kept the agency kept a little Equity but now David split off and built lease leads.co which is effectively templatized websites for these folks but also more importantly apis and Integrations that allow them to update their sites automatically they've got 70 customers paying on average or they're doing about 80 000 a month right now all in on Revenue 25k of that is pure SAS the rest is productized service but churn's almost non-existent because they spend so much setting up and integrating and onboarding those 70 customers now looking at a scale totally bootstrap team of six we'll see what happens next David thanks for taking us to the top hey thank you so much appreciate it Nathan one more thing before you go we have a brand new show every Thursday at 1pm Central it's called Shark Tank for SAS we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back-end dashboards their expenses their revenue our poo CAC LTV you name it they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m Central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2PM Central to make sure you don't miss any of that make sure you 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