Dan Wenhold is with me today in Venice. He's a partner at Fifth Wall where he co-leads the real estate technology investment team. Prior to joining Fifth Wall, Dan was the first employee and director of Retail at the Black Tux and a growth equity investor at Battery Ventures.

Dan. I previously had your partner, Brendan Wallace on the pod, but Fifth Wall has grown a huge amount and just announced a new-ish billion dollars worth of AUM. Congratulations.

Yes. It's been an exciting, I guess, past 12, 18 months for us. Yeah, it's been fun. I mean, when I joined Fifth Wall I was actually, you know, one of the first 10 employees at the firm, And it's been fun over the last five and a half years now since I joined to be able to see the growth not only on the headcount side, but the AUM side.

And we've launched several new strategies. In fact, when I joined, I started investing in retail companies, which we, we don't really, as much of anymore.

Now, I, I spend most of my time on the real estate technology side and fifth wall, you're right, has launched new products, including our climate tech fund, uh, which we announced last year.

And we did announce a billion dollars of new a u m across the real estate technology funds in December of 2022.which is the team that I helped to lead here. I'm based in, in LA but we now have offices also in New York, in San Francisco.

Uh, we have a few folks over in London. We just actually announced our Singapore office, Uh, I think we are over 70 people now, and we've taken the number of LPs that we have, you know, up to over 110 strategic partners on the real estate side. So that's grown.
Just the breadth of our, our ability to work with companies across all different types of real estate and really help them accelerate their growth post-investment.
Yeah. So with your fund, do
you talk about how big the fund
is that you're investing?
is? Yeah. We have out of our, real estate technology fund, a billion dollars.
That's the one that I'm, I
helped to
so it a billion dollars for Just PropTech, which is a massive
amount of money.
So there's different strategies within that. we've actually started to dabble in seed stage investments, which is a first for us. we have about 20 seed stage companies, some that have been announced, some that have not been announced over the last year.
And then we have, you know, a portion of that that we put towards early kind of emerging growth startups. That's typically your series A, series B, and those rounds, we, we like to lead seed, we usually follow. And then we, we have a new growth team actually, John Hong, my partner, he joined us from SoftBank about a year ago, and he leads our growth team
So yeah, a lot of flexibility
And
so at the early stage,
How does
seed
play into a, maybe
play into B for you?
Yeah,You know, we really look at the seed program at Fifth Wall as a feeder into our series A and B rounds. we oftentimes found ourselves, you know, not being able to get to know founders, entrepreneurs as well as we'd like to, and we think we can still help them out a lot at that stage.
You know, we're actually seeing a willingness of real estate owners now want to work with seed stage companies, which actually didn't exist five or six years ago when I joined Fifth Wall.
And we're usually falling on and anywhere, you know, from 250 to $500,000 with a strong lead that will, you know, kind of get in the car alongside of us and do a lot of the work And we're still there with our real estate partners
lead. Yeah.
So
your real
estate partners, you said there's a
hundred.
Yes. We, I believe at last count have over 110 now, which when I joined I think we had five or six.
Wow. That's really impressive LP growth. Tell me about the state of the industry. Now
i would have characterized it as more slow movers people not necessarily eager to adopt seed stage technologies
I think that's, that's accurate. Real estate 10 years ago hadn't yet woken up to, I think, the reality of technology impacting their businesses. You know, they were very focused on asset acquisition and management of those assets through, you know, many offline, you know, traditional ways, that didn't involve using things like, uh, you know, digital technologies to enable, everything from engagement of tenants to, you know, communications across workforces.
That's all changed and I think there has been pressure put on real estate owners in this economy in particular, where they're seeing their cost of capital increase. They're seeing pressure on their noi, that's decelerating in terms of the growth. And as a result of that, they have to be creative in the different types of, technologies that they're partnering with.
So we're really bullish, you know, on real estate technology.
And I think for the long term, we're just still in the very early innings of the transformation that's happening in this industry.
What's the status of commercial real estate nowadays, And people just not going to the offices. As much
I think commercial real estate's, it's not in a bad place. I think it's in a transitionary state right now where they're having to adapt yes, to a new, a new normal.
you're going to still need physical space, you know, on the office side. Um, however, that doesn't necessarily mean that you can think about your physical space the way you did 10 years ago.
You need to be able to provide more amenities to tenants now. you need to think about different types of flexible use. You know, can you take a commercial real estate building and introduce new alternative types of tenants that may not have at lease space from you, you know, five, 10
years
ago? You know, it's interesting.
Just naming kind of one company we've looked at they're actually taking commercial real estate and putting labs, like medical
labs Into office buildings. um, in urban areas. So, you know, I, I don't think anyone necessarily would've thought that you would have a, you know, medical lab, doing research on one floor and then, you know, a traditional, you know, financial services tenant right below them.
I think everybody went home during Covid and got used to being able to go out to the gym during lunch and, got used to be, uh, able to run to their favorite retail store. And we're seeing a lot more mixed use, you know, types of developments where you're actually layering in commercial real estate on top of retail and on top of that is residential.
And then also, Software is something that we're focusing on too. You know, there's been a lot of adoption of tenant engagement, applications across, different buildings.
Think about communities that are basically being built, for office building owners where they can then communicate, you know, everything from the taco truck that's going to show up on Tuesdays, uh, to other types of special events, and announcements for all of the tenants in their building. and it also fosters, you know, inter sort of tenant communication and ability to connect with your neighbors, which you didn't really have before.
So, you know, I think office buildings as, communities and technologies that help to really foster, communication and community are, are gonna be things that, you know, continue to be of high interest to commercial real estate owners.
Do
you see a lot of this internationally? Right? Because one of your big expansions, I think was your LP base is now international and I was just in Singapore and it seems like they've really far ahead of, of us in terms of these mixed
use
office building style
Yeah, I I mean, take, you know, real estate owners over in, in Japan for instance, they're far ahead of real estate owners in the us commercial real estate owners, excuse me, when it comes to things like, you know, access control, You know, I don't know if you've ever, you know, been to an office building and, you know, in Tokyo, but some of them have, the types of technology we haven't seen here, you know, on a more, I think, you know, widely adopted basis, you know, facial recognition technology and things such as that.
In the Middle East, for instance, you know, we, we, have also, you know, I think been spending time there with our European team. a lot of the buildings there are brand new, ground up developments, you know, that is happening at a, at a much faster rate than in other parts of the world right now.
So the way that we interact with, you know, potential LPs in the Middle East is actually entirely different. Cause we're not talking about retrofitting buildings there as much as we're talking about getting new technologies in as part of the development process. So they're obviously very interested in things like construction technology Everything from, you know, robotics to software that will allow them to build, more cost efficiently and, faster.
Anything particularly cool or anything. Uh you're particularly focused on There
And climate tech is obviously a huge push for us right now.
you know, that's everything from, you know, we're, investing in companies. We have a business that, will literally convert sunlight into water. things like that, that are, definitely a little sci-fi. Yeah. But that is where the future is headed.
How
do you convert sunlight
into
a good, that's a good question
for climate
team.
Yeah. Yeah, totally.
my
partner,
my partners Greg, and, and Peter can speak more, directly to that. But, you know, we do have an entire team at Fifth Wall dedicated to climate tech with really looking at the problem, rooting from real estate, you know, being the largest emitter of co2.
and buildings themselves, you know, many of which have already been, been built, you know, actually provide the biggest opportunity, you know, for many of these tenants and owners to reduce their carbon footprint. They're going to need to actively be adopting And integrating new technologies, many of which are, you know, hardware and software based.
You know, these are, you know, a lot more, I'd say, complex, you know, types of businesses than, than, you know, some of the marketplace or, you know, software applications that we'll look f at, in a more traditional sense. And we're not talking about property management software, you know, we're talking about, you know, ways to make, you know, buildings more energy efficient by actually, you know, substituting out some of the, the actual mechanical systems that they're using. So it's a completely different type of, of conversation, which is why we have a separate team that speaks to our LPs about, that opportunity.
Are you only doing software or only mostly doing software?
only. So in the real estate tech side, we do software.
we do marketplaces. And in real estate, it just lends itself more to, you know, manage marketplace models versus true two-sided marketplaces. We have a few of, each, but, you know, many times you sort of need that trusted third party. If you think about, you know, the, the high value that's tied to many types of real estate transactions, like buying a home for instance.
and then we'll also look at some FinTech as well. So, you know, we have LPs that are, in the mortgage space. Uh, so we'll look at a lot of lending technology, you know, for those mortgage servicing type technology. but really, you know, those are kind of the three broad categories. We're Fifth Wall is spending the most time now software, marketplaces, FinTech.
Got it.
And that's changed a lot. If you actually go back and look at when Fifth Wall started and I joined, we were doing a lot of tech enabled services businesses, you know, five to six years ago. Many of the startups that were in the real estate space, you know, were really, you know, I'd say. Adding a, a thin layer of technology on top of, you know, potentially like a lease arbitrage type business model.
And
what has driven that change? Like how much is it
your LPs
are interested in things differently or you are seeing
the value of doing that and bringing along the LPs? Or how has that.
I think it's a little bit of both. I think it's LPs being willing to work, you know, with newer entrants, or newer types of technologies in those spaces. So, take software for instance. You know, let's specifically talk about like multi-family software, you know, multi-family, property managers and owners, they really are, oftentimes dealing with, you know, one, of, of a handful of legacy property management software companies that, that exist.
You know, names that, you may be familiar with Yardi RealPage, they've been around for a while.
So we've really had the chance to, I think now work and hold a hand of a lot of our LPs and get them comfortable with adopting applications that can sit on top of. Yardi in RealPage, it's never a good idea to go in and I think, say, Hey, we want to totally rip and replace,
Instead, I think it's better to find out where you can actually augment what they currently have and, you know, quickly sort of, land and expand from a technology standpoint. So many times, you know, we'll, start with one product that sells in and, you know, oftentimes then look to build quickly on top of that sort of hero products, uh, acv and that's the business modeling that has worked really well within vertical software for real estate.
mm-hmm.
Anything else in vertical real estate software before me. We move on
The other kind of interesting thing that we're starting to see, Is actually vertical API players within real estate that are focused on interoperability across the legacy players. So we actually invest in the company that we haven't yet announced, but we're really excited about that's doing this for one of the particular areas within real estate.
And that is gonna be a complete game changer for many of these newer entrants that would otherwise have to dedicate significant engineering resources to build integrations into all of these well-established platforms when instead that they can just, you know, integrate via, you know, company X, Y, Z that's doing this for property management software or that's doing this for project management software.
Sure. So that makes a lot of sense. If someone has many different properties, many different PMs is, So it was the need for this sort of solution being driven in part because the whole asset class is becoming more institutionalized and less sort of mom and pop owners Owners
thing? No, I think it's definitely changed. I mean, take the single family rental market for instance. You know, I think we've seen the institutionalization of that asset class really accelerate over the last, you know, call it three to five years. Wow. Um, Well, it began really, I would say back with Invitation Homes, they are a fifth wall p and they also, you know, happened to be co-founded by one of Fifth Wall's Managing Partners.
Brad Grimy, Brad, after founding Invitation Homes, you know, went on to meet Brendan start Fifth Wall, but he has a lot of that dna. And, you know, after imitation homes, there were many similar types of groups that went and purchased a lot of these single family homes across the United States, you know, using algorithms, to basically take those and, and create an entirely new, you know, real estate investment trust asset class where, you know, they are now, you know, publicly traded.
I think that. From our perspective, there's different ways to play that where, you know, we've actually invested in companies that are helping, you know, single family rental companies acquire properties, uh, you know, using more data to give them an edge in the market when they're buying. we've also invested in services marketplaces that allow sfr, you know, companies to do what they do best, which is, you know, buy and, and manage properties. you know, they don't want to actually be doing the renovation work and the, ongoing service, for those properties themselves. So one of our company's lesson takes that entirely off their, their sort of their plate and, and manages that for them. And as far as the mom and pops, you know, I think that's still a massive opportunity as well.
Uh, another one of our companies that we invested in last year, uh, belong, you know, they're, Property management software business that is only targeted at mom and pop owners.
So, we think the opportunity in, in property management, you know, whether you're talking about individuals or whether you're talking about institutions,
Hmm.
But almost the software and some of
these innovations
are really allowing more aggregation
and sort
of more institutionalization
Yeah, I think that's, I think that's definitely happened with, with sfr, you know, as with, yeah, I think that there's been probably a slowing in terms of the, the purchase activity over the last, uh, couple of quarters.
But yeah, single family rentals, you know, SFRs are, are certainly, I said, you know, undergoing, uh, an institutionalization as far as the asset class is concerned.
Did you see me
try to figure out what SFR was?
Yeah,
I should have said that up front.
There are a lot of things, you know, sometimes I make the listeners, you can go look it up on your own if you don't know what we're talking about.
Um, So for your
LPs, are they you know, do they think about starting their own CVCs? Like
what
are they most looking for when they are deciding whether to,
you
know, become investors?
Yeah, so I think they're really looking to partner with someone that's in the trenches and rolling up their sleeves when it comes to being on the front lines of, trying to figure out, you know, which companies are best. You know, we, we do something interesting, which is, I think we, listen more than we, you know, talk.
I think at our LPs initially, we want to actually hear what they're. Challenges are, we want to better understand where their pain points are, you know, what types of costs do they wanna remove from their business, you know, where do they think that there are revenue expansion opportunities? And then we actually take those insights and use that to invest.
and as far as I think working alongside, you know, innovation teams, we do that a lot. I think some of our LPs even invest directly alongside of us at times. So, you know, I think one of the things that we can be creative around is thinking about how do we, you know, potentially even incentivize LPs to move even faster.
And there's obviously ways we can do that sometimes with structure, with giving them additional upside and deals, uh, with things like performance warrants, that may even be outta the money initially where, you know, for the entrepreneur, you know, it's almost like if you allow an LP to basically, you know, integrate faster, you know, pay you, you know, today versus.
12 months from now, why not give them a little bit of ownership in your business as well? and something like that for the lp I think is, is a way that they can sort of circle the, the wagons internally and really pound the table for fast tracking, you know, these types of technologies through their own internal approval processes. real estate's an interesting beast as far as like approvals. You know, you usually have somebody that's actually at the asset level. You have somebody that, you know, could be at a regional level and you have somebody that may be sitting at HQ Q Q more at a corporate level. And you have to have buy-in from all of those different types.
And there might be a very different view with that person that's at the asset level and what they prioritize versus what corporate prioritizes. And there isn't a right or wrong there, but it's just how do you sort of sync all of those things together And that's really at Fifth Wall, that's our job is to get everybody rowing in the same direction.
Yeah.
You guys have done a great job being innovative in
venture as an
asset class, and I think performance warrants are a little controversial at times.
I think performance warrants, when you are getting credit for not doing anything or bringing any value to the table, I think are, are actually a bad, I think they're a terrible idea. I think if you're just asking for warrants for showing up, like that's never gonna be, I think, a good thing for entrepreneurs.
No, I think, I think you have to earn into them, as I said, and whether it's tied to a revenue delivery target or whether it's tied to, the ability to launch a certain number of pilots. You know, this isn't anything that Fifth Wall really gets credit for. In fact, we share these with our, our LPs.
Sometimes it's, it's really the LPs that we're incentivizing to move faster.
Mm-hmm. . so, okay, so
you've got this unique structure. You've got all these LPs
that are super aligned they're interested in the innovation.
Um, but
Brendan,
your partner also seems like, the world's best
fundraiser.
Is that fair?
Brennan does a lot of things really well, and fundraising is just one of many. Mm-hmm. , um, you know, I think he's obviously very passionate about, real estate, very passionate about climate. So I think it's easy to fundraise when you're very passionate about the things you're fundraising
for.
Yeah.
So it hasn't been, I think something where he's had to convince himself that real estate needs to change and venture is the, actually the best way for real estate to sort of, catalyze that change. Same thing with climate, very passionate about, climate sustainability
within real estate.
And the best way to do that is actually invest in the technologies and to bring along the LPs to do that.

Okay.
Th that was a really good overview. I have meant to ask a little bit about you though. You
started
at
Battery was what I said. So you were doing growth
equity there.
equity. Yeah, so I grew up in Chicago, which isn't really, I think a, an area that's known for technology and innovation, at least not, you know, 15, 20 years ago.
And when I went to undergrad, no one even ever mentioned the possibility of going into tech.
And I went and worked for a small bank in Chicago, a middle market bank in Chicago for a year in the business services group. And I hated it. You know, we were representing. Staffing companies and like paper packaging businesses. So, I actually asked to be transferred to Tech, which had an office, a small office at the time, in Palo Alto, and this is around 2010.
And we actually were across the street from Facebook's, one of their, like first offices, in Palo Alto and Page Mill Road. And I was there for a few months and, and yeah, got the opportunity to join Battery, was very lucky, that I was, was down the road from where they were in Menlo Park and met the team there and went to Boston to join their growth equity
team.
What is Battery's reputation like? What are they
known for?
Battery now, I think has one of the best reputations in software that they've built over the last decade plus. But they've been in some of the, the most, I'd say like recognizable consumer businesses as well. So when I was there back in 2010, uh, one of their bigger bets at the time was Groupon.
I don't know if you remember Groupon in 2010 was like the hottest consumer company. I think it was like the fastest company at the time, that scaled to like a billion dollars in value. And they had been, uh, one of the leads of, of their fundraising rounds. as far as like looking back at some of the other consumer deals they did when I was there, they did Wayfair.
Pre i p o, like, you know, that at the time was, was actually a collection of vertical furniture sites and like, home furnishing sites. The wafer brand didn't even exist. that was a fun one that they worked on. and then other businesses actually that, that fell into real estate. Like they were early investors in Hotel Tonight, but now they do a lot of B2B software, and have, you know, consumer, focus and, and they actually have a private equity group now as well.
And so what was your role as an associate at battery? Were you, um, were you cold calling CEOs and asking them to take your money?
So when I was, I was interviewing for private equity jobs and venture capital jobs like. Cold calling was like a dirty word, right? Or like a, you know, sort of a, a dirty thing to move into a job where you had to cold call. It wasn't even cold calling at the time. I'd say it was more like cold emailing Uhhuh
But, you know, every time that I would mention to someone at the time that I was interviewing with growth of equity firms, they would always look at me and they'd be like, do you really want to cold call? And, I had interviews with TA Associates, I had interviews with Summit Partners, with Polaris Venture Partners, and they were all very sourcing heavy. And this is like pre insight. So there hadn't even been sort of like the, insight sort of spin on this where they, I'd say really wrote the playbook for I think what many venture firms follow today when it comes to like having large sourcing.
Armies.
I don't really know the Insight Playbook, that's what it is
analysts. Yeah. They hire directly, I think they believe, believe they hire directly even outta college now, similar to how Summit and TA once did. And you know, it's very sort of bounded in terms of we look for certain revenue targets, we look for certain EBITDA targets, depending upon what types of deals you're, you're looking at.
And biggest thing is it's very metrics driven. So even a battery, we had targets on a, on a monthly basis. You feel like more like you're a bdr,
like targets for how many CEOs you get on the phone
sort of,
yeah. How many meetings you schedule with your vp, how many meetings you schedule with a partner. And ultimately, like the only metric, let's be honest, that matters is how many investments battery makes. So yeah, I worked on a few companies, you know, luckily that we actually took through to investment. and it was just a great experience, I think to understand, you know, in venture you have to be able to.
Roll up your sleeves, make connections, network to find the best deals, right? They're not just gonna come to you. You're not gonna have a banker or a lawyer or another type of, you know, third party bring you a company before anybody else finds it. If you really wanna find the companies before anyone else does, you have to do the, the work yourself.
So I was terrible at sourcing for the first year. And then, you know, I think I got a lot better at it in years two and three. And then obviously at Fifth Wall, you know, I, I still do a lot of sourcing, even, even though I'm a partner now. We don't have a model like battery where it's just really associates and, and analysts.
Um, you know, at Fifth Wall, everyone's sources.
How do you source today?
Today a lot of it is still, I think internet search driven. I think it's a lot easier to search or source, I should say, at Fifth Wall because we're bounded by real estate. Yeah.
It's not like battery where, you know, it's either thematic driven at battery or, you know, you're literally covering software but yeah, I think it's a lot of it is internet, based search. at this point, you know, we actually have a data analyst that we hired at Fifth Wall. Mm-hmm. , and he's set up, you know, a lot of great types of, you know, kind of proprietary, you data leaks for us that, you know, drip into a dashboard that will alert us to when certain companies.
Traction, uh, targets that we have or metrics set up, everything from employee count to, you know, last, you know, amount raised. and then just still a lot of just old-fashioned getting out there, right? Like, you know, you're on the road a lot, you're meeting with a lot of people, you're talking to other bcs. we actually do get a lot of deal flow from earlier stage funds,
Mm-hmm. .
So you went from battery to black Tucks, that's a change.
Yeah. So pull the rip. I was a battery for three years and then had the opportunity to, I guess, kind of reassess, you know, thought of everything from business school to, you know, potentially switching gears entirely.
Going to work for a portfolio company of batteries at the time. actually really wanted to go to LA so it bounded my surge a little bit. I think it was probably just more of a byproduct of being sick of snow for, at that point, like 25 years of my life. So I. I wound up narrowing the search down to, to LA and, and found this company, the battery I actually had talked to for its seed round, uh, called the Black Tux, which was at the time doing something that resonated with me because I had started to be asked to be groomsmen in weddings and had had a, a few terrible experiences with the men's warehouse.
And basically the Black tux at the time was trying to do what, Rent the runway was, was actually doing quite successfully, which was, you know, take the entire suit rental process online, never have to walk into a tux store ever again, never have to deal with, you know, styles that, you know, have been on the rack for 10 plus years. and, you know, do it all at a price that, you know, was, was pretty competitive.So, yeah, I showed up there the first. I was used to a more, you know, formal environment having only worked at an investment bank and, and battery. And it was, the office was actually in Santa Monica, walked in.
It was split between a warehouse and an office at the time. And the first thing they told me was like, great, glad you're here. Go pack boxes, . So I was, you know, the first employee. I didn't realize actually how early it was. I should have, I guess, done better due diligence when I was talking to the two founders.
But I was really lucky they took a bet on me. I didn't have any operating experience and it was a lot of fun. I learned a ton there. Did everything from customer service, in the early days to, as I mentioned, I was, you know, packing boxes in our warehouse. business development. obviously helped out on the finances, given my background a little bit on the financial side. but ultimately took on a role where we started opening stores. And that, I guess is really kind of how I got into more real estate, you know, driven Ops, where at the time, you know, we were trying to think about how we could bring down our customer acquisition cost. And a lot of companies were beginning to experiment with brick and mortar that were digitally native.
And we thought, Hey, we can do what Warby Parker and Bonobos are doing. And they were the two at the time that had scale. And by scale, I mean, I think Warby Parker had 10 stores, so . Warby War's, head of retail actually had gone to business school with one of our founders at Black Tucks and he actually became a mentor of mine, at the time.
And, you know, he basically gave me the Warby playbook to a certain extent and said, Hey, this is really what we do. And I was like, great, you tell me where you're opening up your next door and we're just gonna look on the, the same street and that's where we'll open up a showroom. So did that for a few years and that was a lot of fun.
are there any like, rules of thumb still that you can share from those experiences running the retail fund in terms of like when brands are thinking about offline stores and sales lift and, you know, you were building sort of that playbook, right?
right?
Yeah. I, I, I think comes down to really like profitability. And I think that's been under a magnifying glass for, you know, many digitally native retailers over the last five years. When I joined Fifth Wall was at a weird time. Like you had valuations for digitally native brands that looked like SaaS, right?
companies, like, yeah, these, these businesses were trading it like five to seven times, like forward revenue. The problem was is these are not software businesses and they're not, they're not really even technology companies, right? Like these are, you know, services businesses, retail services that have like a technology, portal to, you know, an e-commerce platform that allow you to expand your, your sales. so. I think the thing for a lot of retail companies now is being able to, to just prove that you can get to profitability a lot faster. It's no longer okay to just burn venture dollars, you know, at the expense of growth. And there was really a valuation reset in about my first or second year at Fifth Wall where I came in and we'd invested in some of these companies like Cotopaxi and, and others, uh, in our first fund for retail where, you know, they had to get, get healthy and get healthy fast in terms of their margins.
And the ones that were able to do it were, you know, highly successful and we were able to make that transition. but you know, certainly there were a handful of companies, that we, you know, I think talked to about potential investment that, you know, ultimately struggled to raise capital because they couldn't get off of the, you know, addiction at the time.
That was, you know, Facebook advertising, you know, digital spend was just crushing their businesses so, Stores have always been meant to augment that. And the whole thesis amount of store has been, you shouldn't have to spend dollars against that like you do with an online ad. Uh, people should just know that you're in a popular area shopping center, a retail destination street, and as a result of that, that brings your cac, you know, to, you know, close to zero.
It's really about brand awareness at that point, and word of mouth marketing. I don't think that's entirely been the case. I think, you know, companies have still found themselves having to spend to raise awareness about stores, but you know, over time you hope that you can just benefit from traffic, in areas and bring that cost of acquisition down and, and make your margins a lot healthier on, on that side.
So, I think that's, that's the advice I'd give to any of our companiesfocus really on, on contribution margin, not even gross margin, contribution margin, is the most important metric.

So you're having these conversations with founders as a board member. What sort of board member are you how do you think about your role Role.
I want to be the type of board. where, you know, we're viewed as obviously, you know, supportive and you know, someone that the CEO can call, under any circumstance. But at the same time, we're also there to, to ask the hard questions. And you know, I think actually the last like 12 months was probably one of the more challenging periods of time to be a board member, that at least that I've experienced in, in my short career.
You had, you had to have a lot of hard conversations, you know, with, with founders that necessarily didn't want to come to terms with the reality of the situation that was impacting their businesses in terms of, you know, having to reduce, burn, or make hard decisions about, you know, opex well in advance of when they would actually need to or be necessitated to based on cash and and runway.
I think before people thought that they could sort of, Run as fast as they could towards the edge and someone would always build a bridge, you know, for them to get across. But like, no one's building the bridge any longer.
,Um, or at least you can't bank on that, that happening. So, you know, I think while we're there to be, I think, you know, operationally minded and, and commercial too, I think as far as like helping the CEOs think about ways to work with our LPs, you know, I think we're also there to, to be critical, when needed
doing mm-hmm.

Other lessons from Scaling Fifth Wall. You guys have done amazing and interesting things like around your content, other things you wanna highlight?
I think just building, and this might be, you know, I think, you know, cliche, but I think culture is really important. Like, yeah, when we started Fifth Wall, we were 10 people in a loft on Abbott Kinney. And like, that's very much like a startup where you are kind of all in this together and everybody knows exactly what's going on and, you know, everyone's rowing in the same direction.
and Fifth Wall has actually gone through the same thing that, you know, many of our startups go through. We've hired more people, we've become more specialized, and we've moved and spread out, geographically. And I think as far as like, what's the North Star for us, you know, obviously we're focused on our investments and returns and supporting our founders, but you know, we also have to make sure the fifth wall itself, you know, continues to, to be healthy as, as far as our organization's concerned.
been, how do you describe the culture
at Fifth Wall?
I think Fifth Wall is very startup minded, honestly, when it comes to growth. You know, we're growth first, but at the same time, you know, we also, are constantly looking to be innovative. I think as far as like firms are concerned, you know, we are a different type of asset management firm.
We are not looking to just be solely a venture capital firm. we're looking to really lean into the different types of ways we can help out startups and, you know, you think about real estate, you know, there's, there's a lot of different ways you can think about the financial services layer. and, and access to capital that goes beyond just venture dollars to help accelerate these types of businesses. So, you know, I think Fifth Wall is a place that is constantly asking its people to innovate. it's, it's a place where, you know, you are given a lot of autonomy. . And you know, I think there is just, an energy here with the growth that doesn't exist, I think, in other types of firms. and I think for some people that might be, you know, a little scary. But I think it's, it's also good because I think we're constantly challenging ourselves to look at our existing business model and ask ourselves, where can we get better and where can we improve?
Yeah. Gimme just a quick flavor of the,
the main people in your life.
So,
Brendan, as I said, had on the show, so I
know I'm a little,
Yeah. we have two, uh, co-founders at Fifth Wall. Brendan, Wallace is, one of the, the two,
And then Brad Grawe is the other co-founder. You know, Brad had a lot of the real estate operational experience. as I mentioned, he was previously at Blackstone and then he was one of the co-founders of Invitation Homes, which is today the largest single family rental or, or sfr, publicly traded reit. and then we have a third managing partner, Andrew Milosky. He really functions as more of, of, I'd say the investment specialist at Fifth Wall who sits across kind of. Investment vehicles and funds that we have. So, you know, he is very much in the weeds with our PropTech team and climate tech team, in terms of helping us look at new investments and underwrite those and, and make decisions about follow-ons and portfolio management. and then, yeah, on our real estate tech side, there's, My partner Sarah Lou. she actually, you know, runs our, our early stage fund with me and focuses on seed through series bc and then my partner, John Hong, runs our growth fund
And how about you? Like how I, this is my favorite question.
how do your friends
describe you?
I, think my friends have always, you know, described me as someone that, is looking to push myself kinda outside of my comfort zone and, and grow. I think all of the opportunities that I've taken, you know, I, I've always been, the type of person that will stay at, at an organization until, you know, I feel like I've sort of learned all that I can and, my personal sort of growth development, you know, curve has flattened. I can happily say that fifth wall and just given the rate growth of this place and, and how many new things, uh, we've launched and tried over the last five and a half years since I've been there. Like the curve is still pretty steep. So,
you know, there's still, a lot of opportunity ahead.
have.
Well congratulations, . You guys have built something really impressive and
really important
in PropTech. and thanks for coming on the pod and telling me about it
Thanks, man. It's been been a lot of fun. Appreciate you having
me.