Investing Venture Capital in CRE Startups

Experts at CREW Network's annual convention in Orlando shed light on the risks and rewards of financing proptech.
L to R: Liza Benson, Momei Qu and Andrea Jang at the 2019 CREW Convention in Orlando Sept. 26. Photo by Holly Dutton

Over the last several years, proptech companies in the U.S. and worldwide have flourished. According to Steve Weikal of Massachusetts Institute of Technology’s Center for Real Estate, there are 7,000 proptech companies across the globe. With so many to choose from, how does an investor decide where to put their venture capital?

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At the 2019 CREW Network Convention in Orlando this week, a panel of investors shared their expertise in the proptech space, offering tips on how to best scout a potential investment, what questions to ask and which factors to consider when choosing to invest in a proptech company.

What to look at in a company

“I think it’s important for you that you look at companies you may use in your own businesses,” said Liza Benson of Moderne Ventures, adding that investors should look at the sustainability of the company and should be prepared to ask questions about the financial health of the firm.

“How well are you funded, how much cash do you have? Who are the people backing you?” said Benson. “You certainly don’t want to have your part of your business very dependent on a company that doesn’t have the right financial footing.” 

Investors should also take a hard look at a company’s model and whether there is a true path to profit.

“You should be able to see a line of profitability,” said Momei Qu, vice president of PSP Growth, a venture and growth equity arm of PSP Partners.

Andrea Jang is the head of growth for the Americas at JLL Spark, a $100 million global venture fund that focuses on investing in proptech within the commercial real estate sector. Jang and her JLL Spark team are strategic in their investments—they factor in whether their investments can be used within their JLL channels and with JLL clients.

“If there’s any tech we’ve invested in that I’m presenting to JP Morgan Asset Management or Morgan Stanley’s real estate group or Prudential, I have to give them a level of assurance that this isn’t a company that will go under in the next year or so,” said Jang.