Building a PropTech Venture with a Virtual Team: Discount Lots President Paul Hersko (Part 5)

Sramana Mitra: What is your primary use case? City dwellers wanting to buy property outside the city?

Paul Hersko: Yes, I would say so.

Sramana Mitra: Were you self-financing still at this point?

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599th Roundtable for Entrepreneurs Starting in 30 Minutes: Live Tweeting by @1Mby1M

Today’s 599th FREE online 1Mby1M Roundtable for Entrepreneurs is starting in 30 minutes, on Thursday, February 16, at 8 a.m. PST/11 a.m. EST/5 p.m. CET/9:30 p.m. India IST. CLICK HERE to join. PASSWORD: startup  All are welcome!

Building a PropTech Venture with a Virtual Team: Discount Lots President Paul Hersko (Part 4)

Sramana Mitra: All of the properties are in Los Angeles?

Paul Hersko: In the desert though, like near Joshua Tree. That’s how we started. We just bought a bunch of properties.

Sramana Mitra: Why did you choose outside of Los Angeles area?

How to Raise Pre-seed Startup Funding

The toughest round of funding an entrepreneur will seek to raise is pre-seed investment. It has the lowest probability of success, the highest amount of ambiguity, is poorly defined, and causes the greatest amount of confusion and missteps out there.

Over 99% of the entrepreneurs who seek financing are rejected.

So, my humble advice to all entrepreneurs: please learn to assess your own probability of getting funded.

For our Seed Capital series of podcasts and blog interviews, I’ve interviewed hundreds of investors, especially micro-VCs and angels who play an important role in the early-stage game.

As I expected, a large number of investors are still chasing Unicorns. They are interested in investing in companies that will go from 0 to $100M in 5-7 years. And they will consume a great deal of capital in the quest of hitting the coveted billion-dollar valuation mark.

However, I am pleased to report that I have spoken with a good number of investors who recognize the niche opportunities.

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Building a PropTech Venture with a Virtual Team: Discount Lots President Paul Hersko (Part 3)

Sramana Mitra: How do you finance yourselves?

Paul Hersko: We have a fund that we run. People can invest in our fund. Let’s say you invest $150,000. We take that money and purchase property with it and provide our investors a return. Then, we sell the land.

Sramana Mitra: What behavior are you seeing in your user base? Are people buying the land to make money off of the land or are they mostly buying just to use the land?

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