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Last week, I wrote about the launch of Fractional, a startup that wants to make it easier to co-own real estate with friends (and strangers). Co-founders Stella Han and Carlos Treviño bonded through their shared experience of growing up in real estate families while working at Affirm, the buy now, pay later giant. However, Affirm’s “pay at your pace” mission came up against the duo’s direct experience of time commitment and the high costs of owning real estate; a contrast that ultimately sowed the idea of Fractional.
I go into more detail about Fractional’s product and its recent fundraiser in my story, but today I want to focus on a bit of my interview with Han, the co-founder, who stood out for me. . During our phone call, we discussed how the future of alternative investing rests on the rise of people in a long-term asset class; we see it with private equity, art ownership, and now real estate. While reducing the size of the check for entry questions – this is one of Fractional’s hooks – the social aspect does the same. Can you significantly educate a cohort of people to understand the value they will get by investing money in a house versus an index fund? Can you “disrupt” the reluctance to go into business with friends? Can you foresee the unforeseen twists and turns of life and a member of your investment group wanting to liquidate as soon as possible? These questions are all far more interesting and thorny than the logistical argument of home ownership. The split, I hope, will also make it collaborative.
The way Fractional has prepared for the unexpected, so far, looks like a classic curation. Han explained that they build investment communities around specific properties, with the aim of bringing together like-minded people. “It doesn’t make sense to someone who is planning to return a property in a year versus someone who wants to keep it for five years,” she said. By eliminating the main differences from the start, then involving lawyers, the startup begins to allay the first concerns. Yet the heaviest lift in startup – like any business promising to bring access to a new asset – will be governance and transparent setting of expectations.
Fractions aren’t enough to solve divisions, and that’s a lesson for the startups and pumpkin pie enthusiasts among us. In the rest of this newsletter, we’re going to tease a few gift guides and, uh, estate management. As always, you can follow me on Twitter @nmasc_ or on Instagram @natashathereporter.
Tools to improve your work from home setup, or just your home
TechCrunch begins rolling out our annual gift guides! For those who are new, we have a tradition of posting niche wishlists every year to help gift givers make decisions. It could be gadgets to enhance your work-from-home setup or giveaways to make you less lonely.
Here’s what you need to know: So far, we’ve published gift guides for working from home, setting up video calls, and the cohort of homeowners who want to turn their home into a smart home. Oh, and we’ve also posted a Wish List for Plant Lovers and Kids Who Love STEM Toys. Can you tell that we’ve all been inside for too long?
Speaking of material:
- Subscribe to Actuator, Brian Heater’s robotics of the week newsletter, soon to be launched.
- For my gift guide, I need you to DM me who is your favorite solo entrepreneur (i know, mysterious, but how else can you create suspense?)
And the startup of the week is …
New culture ! Anyone who listens to the podcast knows that I love cheesy startups, figuratively and literally. This week, New Culture raised $ 25 million in seed funding to market its vegan cheese mozzarella. Maybe it will arrive in grocery stores soon enough!
Here’s what you need to know: The alternative cheese maker claims it’s much better for the environment than dairy-based cheese, which may require 56 gallons of water just to produce an ounce. New Culture also touted advancements in land use.
Not to be dark but …
Let’s talk about estate planning (partly because the topic is central to the final season of “Insecure” and partly because it sounds like one of those parts of life that no one, understandably, wants to plan for. ). In a column for TechCrunch +, Gentreo CEO and Founder Renee Fry gave the founders some basic estate planning advice, both for high net worth individuals and simple startup owners.
Here’s what you need to know: Fry argues that estate plans should be constantly adjusted throughout a person’s life, especially if they are in charge of a thriving business. The fluidity of a business’s success is exciting in real time, but could pose challenges when it comes to succession planning.
You have to decide who you trust to take over your business if something happens to you. It’s not just about having an estate plan that expresses your wishes, it’s almost equally important to communicate it along with a written estate plan. – Renée Fry
And, there is always an angle of succession:
Listen to our brand new TechCrunch podcast, Found. Co-hosted by Darrell Etherington and Jordan Crook, Found is all about how founders do what they do, favorite twists and turns.
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