I'm sure everybody has already seen our announcement today about securing a $2.75 million round of financing.  This culminates many months of hard work to get the capital in the door that we needed to complete our vision for ActiveRain.

For those that don't know the ActiveRain Real Estate Network started as a 3:00 AM brain fart of mine almost two years.  We had been building lead management software for real estate brokerages at the time, and I decided to put the little profit we had into launching the initial version of the social network.  It took off a lot faster than I expected and within six months we changed our focus to 100% concentrate on social networking as opposed to software for brokers.

The next year and a half we pretty much shoe stringed the whole operation along.  Partly funded by HELOC's on our homes and small investments from a few angel investors.  As recently as this spring we had three employees, I was working out of my basement "dungeon", and several of us had gone months without pay (ah, the life of a startup).  We had grand visions for what we wanted to do with ActiveRain but all our resources went to simply maintaining what we had.  There was no way we could keep things running and grow at the same time so we needed outside funding, which of course took even more of our time.

I don't know how many of you have gone through the process of raising funds, but it is a long, hard slog even if you are a "hot" company like ActiveRain.  

We talked to VC's, Angels and a multitude of strategic investors trying to get a deal that not only worked from a financial standpoint, but didn't conflict with the promises we'd made to members, or our planned business model.  I've worked for several small startups that were basically driven under when they took money from the wrong investor.  In the end I'm very happy and I think our members should be pleased with what we were able to structure.  Now I just gotta go beat on Jerry's door and try to get that Outside Blog platform out the door ;)

 

 

63 Comments on The long hard road to financing

This is exciting.  Again, congratulations, Matt.

Run with it!

01/21/2008 01:21 PM by Mike Jaquish Keller Williams Realty, Cary, NC (Keller Williams Realty)


Congratulations!  I have worked in a couple of start ups and it is a tough road to get that financing!  Kudos to you on this round, and my fingers are crossed for all of you and the future.  

01/21/2008 01:24 PM by Ginger Wilcox, Marin County Realtor (Pacific Union, Marin Real Estate)


Matt: I know what's it's like to start up a business...and everyone else need just go back in time a little bit to when they first started their business. It take long hours of dedication, effort and hard work....without pay. You all are doing what needs to be done so you can move forward and not have to panhandle to keep things going (okay, not panhandling but asking people to help out) ActiveRain is the best investment ANYONE could possibly imagine.

Oh...so it's Jerry I have to nag about the outside blog?  I am in...that's a given. I am so pleased with what I've gotten from ActiveRain...my first closing/recording on Thursday from ActiveRain and most importantly...the info and support from peers here...  OH...and you guys too. Thanks...now I'm going to bother Jerry if he doesn't get some kind of update up about that blog.

 

01/21/2008 01:29 PM by Celeste "SALLY" Cheeseman (RA), e-PRO HAWAII Real Estate & HAWAII Relocation (Century 21 Liberty Homes -Mililani, Hawaii)


Congratulations, Matt.  I am glad you have the funding you need to make your vision even more of a reality.

01/21/2008 01:30 PM by Maureen Francis & Dmitry Koublitsky, SKBK Sotheby's - Metro Detroit (SKBK Sotheby's International Realty)


Matt,

You've looked out for all of us and we appreciate it.  I can't wait to get going on my outside blog :).

Thanks,

01/21/2008 01:31 PM by Fran Gatti - Crescent City CA Real Estate (RE/MAX Coastal Redwoods)


Yes Outside blogs would be a good thing.  I check back daily for info on them.  Can't wait to see you roll them out.

01/21/2008 01:47 PM by Jason Smith Iowa Hunting Properties and Farm Land (Whitetail Trophy Properties)


No insult intended, Matt, but you should fart more often into your hat during the wee hours. Congratulations on closing your round of financing. I guess you guys can now afford the fusball table! Well done.

01/21/2008 01:57 PM by Andrew J. Lenza (ABR*GRI*MBA) Monmouth County NJ Real Estate Broker (Andrew J. Lenza Realty)


Andrew, I had to think about that comment for about 2 minutes before I got it, I'm a little slow today :)

01/21/2008 02:02 PM by Matt Heaton (ActiveRain Corp.)


Just a thought Matt,,, hello, my name is Mike..

I am past president of a few small clubs, leads groups. We were always needing cash, so we ( I) contacted the Wal Marts, ect to have hot dog sales, ect. We also started  a 50/50 ticket sale for every weekly meeting. The 50/50 made our insurance payment after that!!

I know this may be outside the scope of the existing format, but everyone deserves to be paid for what they do, except for Realtors, who somehow in the early days of real estate said"Ahhh, don't worry about paying me now, I will catch yu at closing"  We still have that crappy method of possible reimbursement of expenses to this day!!

I recently used a vacation travel package to fund some of our contributions that our various charities had gotten so used to that we were line items in thier budget.. No pressure Mike, the Food bank will make it somehow............Anyway, the travel packages cost us really squat, and had a retail value of thousands, so we raffled them off at various functions for ten bucks a ticket. We sold so many tikets we gave away more cruises..

Oh yeah, I am blown away with the sucess of Active rain...If you had a little pay pal doanation banner off to the side somewhere, yo might be surprised what would trickle in...

Of course, none of this beats 2.75 mill in one check!!! Good for you... are you  looking for low rent offices in Central Fl with some of that cash... Just had to ask  Again great job...go buy some ice cream now, you deserve it

 

 

01/21/2008 02:03 PM by Mike Norvell Sr., Developers Capital Realty (Developers Capital Realty, LLC)


Congratulations - now push that outside blog platform on over!  I'm anxiously awaiting something easier than I have now!

01/21/2008 02:11 PM by Michelle DeRepentigny, *Associate Broker/Broker * Athens, GA (ERA Classic City Realty)


Good luck with tings. I hope the financing from this point forward will not be as difficult.

01/21/2008 02:11 PM by Canton Georgia Real Estate--- Dwayne West (Atlanta Real Estate)


This is awesome news, Matt....Congratulations to you and the the rest of the AR crew!!

I'm looking forward to seeing what the coming months will bring,

Jo 

01/21/2008 02:13 PM by Jo-Anne Smith-Belleville, Quinte and Prince Edward Region Real Estate, Ont. (Royal Lepage Proalliance Realty, Brokerage)


This is terrific news, Matt. Well deserved. Looking forward to more improvements.

Jeff 

01/21/2008 02:18 PM by Jeff Dowler ~ Carlsbad Real Estate (RE/MAX Associates)


Congratulations on finding your funding!  I wish you all the best!  I thank you for creating this place where we can encourage and help eachother.  I have learned much and gained more friends.

It's a Good Life!

Fran

01/21/2008 02:22 PM by Frances C. Rokicki, Broker~Mentor (Fran Rokicki Realty, LLC)


What? You guys don't want to work for free anymore? What's up with that?  Glad you are starting to see a few rewards with your fabulous idea!

01/21/2008 02:25 PM by Karen Hurst ~ Real Estate Broker ~ Warwick ~ Rhode Island (Storm Realty LLC)


"I was working out of my basement ..." -- brings new perspective to the phrase 'getting in on the ground floor!' Congrats on the funding. Things always seem to run a little smoother with a couple of million in the bank.

01/21/2008 02:27 PM by John Novak - Las Vegas and Henderson NV Real Estate (Keller Williams Realty The Marketplace)


I am both very excited for you guys and nervous of the prospects of a company like HV being involved with this platform.  I will continue to hope for the best. 

01/21/2008 02:28 PM by Lane Bailey - REALTOR & Car Guy (Diamond Dwellings Realty)


Hey Fellas of the Rain.  It has been a long while, but I saw this come through my feedreader and I could not be anymore happy for all of you who have put your blood and sweat .. fart and other bodily functions into ActiveRain!

I wish you continued success and MUCH happiness, always!   

 

01/21/2008 02:29 PM by Christine Forgione - Associate Broker (PCA Realty, Inc.)


Congratulations on the funding.

01/21/2008 02:39 PM by Jim Houlihan (Coldwell Banker)


Congratulations Matt.  Keep up whatever it is that you are doing!  Think big !

01/21/2008 02:41 PM by Bill Gillhespy Fort Myers Beach Realtor (Century 21 Tripower Realty)


matt,

I know how hard you guys worked to make this a reality!

The hours have paid off for you and it`s time to spend some of the DOUGH!!!

Enjoy, you`ve earned it!.

 

01/21/2008 02:44 PM by Scott Daniels Florida Real Estate 2.0. Agents Earn 100% Commission. (Florida List For Less Realty, Inc. Broker/Owner. )


You guys will be the ones benefiting from the dough spending our top priority right now is ramping up product development as fast as possible.

01/21/2008 02:49 PM by Matt Heaton (ActiveRain Corp.)


Matt - you all sacrificed so much.  I appreciate that you are staying true to your promises to the community!  Much luck to you and the rain gods!

01/21/2008 03:01 PM by Joan Whitebook, ABR, e-Pro, CEBA (Buyer's Option Realty Services)


Congratulations and thanks for all the hard work and sacrifice. 

01/21/2008 03:27 PM by Maureen McCabe - Central Ohio real estate (Real Living HER)


Congratulations, all!  Working out of your basement you should be glad you were in Washington instead of in Florida, where you would have drowned. Things do usually work out for the best - I'm glad the deal with realtor.com didn't work out, and that you're maintaining majority control. We'll hang on for the ride.

01/21/2008 03:34 PM by Sharon Simms St Pete Florida CRS CIPS CLHMS (RE/MAX Metro)


I'm very happy for you guys Matt. Now about that cab money you owe me? :)

01/21/2008 03:45 PM by Bryant Tutas-Tutas Towne Realty, Inc


Matt...

Can I trade my points in for ammo now? :)

TLW...ROAR!  

01/21/2008 03:47 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)


I agree Michelle

Congratulations - now push that outside blog platform on over!  I'm anxiously awaiting something easier than I have now!

01/21/2008 03:55 PM by Delaware Homes For Sale:FREE Delaware Search: Delaware Real Estate: Tom Davis (Delaware Real Estate: Delaware Homes: Delaware, Dover , ERA)


Congrats on getting this one done. Have been through the whole process withon a startup we did in LA in the '80's that eventually came up on NASDAQ. It was an eye opener. Wrote the orig. biz plan when there were two of us, then quickly became SR VP Marketing as we took off and grew.

Commented about your recent funding success with Jonathan, and gushed to him about the recent hiring of Rich. Bob has been a real gem, and adding Rich is one hell'uva excellent move.

cheers 

01/21/2008 03:58 PM by Gary Bolen (CRS) Lake Tahoe Real Estate Information (Dickson Realty - South Lake Tahoe)


Matt, very happy for you and everyone, Sarah, Jon, Ben, Lydia, Bob et... all.

I'll reserve my opinion on HV and hope over time it will change. You deserve the best, you have a great network of people who love and trust one another here.  

01/21/2008 04:11 PM by Missy Caulk Ann Arbor Realtor Ann Arbor Real Estate (Keller Williams Ann Arbor)


Very happy for everyone.... you deserve what you have earned and what is to come!!!!!!

01/21/2008 04:21 PM by Tom Burris | Texas Home Loan Expert (DallasLoanGuy.com)


Matt,  Congrat and very cool!  I know what you're up against when you go out looking for financing.  Looking forward to see what you have in store for us.  Congrats again!

01/21/2008 04:23 PM by Marc Grossman, GRI - Central Florida Real Estate Specialist (Keller Williams Premier Realty)


This is good news. You deserve any financial success that comes your way.

01/21/2008 04:36 PM by Tigard Oregon Real Estate >> Wayne B. Pruner, GRI (Oregon First)


Matt, yes I have watched my son grow buysafe.com from a class project to an Internet business with 90 million contacts per month.  I DO understand where you've been and where you're going.  I trust your decision - you've created a business with great potential, and you certainly have the right to earn a profit.  Good luck to you all!

01/21/2008 04:49 PM by Margaret Woda, Maryland REALTOR (RE/MAX VISION)


Matt, you deserve to get money after all the work and time you have put in. What I still don't understand that has not been fully explained is what is in it for your new contributor? Bottom line there has to be some reason why they would want to invest that kind of money and I for one, would like to know what it is.

01/21/2008 05:20 PM by Sacramento Real Estate and Luxury Homes, Assoc. Real Estate Broker,Gena Riede (Remax Gold, Assoc Broker)


Matt, congratulations on this financing.  I trust that there are bigger and better things coming down the pike for Active Rain!

01/21/2008 05:36 PM by Brian Block -- Northern Virginia & D.C. Real Estate (RE/MAX Allegiance)


Hey Gena,

The deal is structured very similar to a typical VC investment.  They believe we are going to be very successful with a little bit of cash behind us, and want to the opportunity to share in the success.  Same reason I invested my money in the company...

01/21/2008 05:46 PM by Matt Heaton (ActiveRain Corp.)


I love it when a plan comes together.

I've been with a couple of start-up, an IPO, started several new businesses and moved on when markets changed.  It's not easy and I didn't have 65,000 folks to try to please. 

You guys do a great job.  I appreciate you every single day.

01/21/2008 07:26 PM by Lenn Harley, Homefinders.com, MD & VA Real Estate


Keep up the good work and we will all be happy and hopefully you will prosper. Congrats

01/21/2008 07:57 PM by Michael Eisenberg, Bellingham Realtor (Fairhaven Realty)


Sounds like a  wonderful day in the rain.  Where can we read more about the outside blogs?  I'm well on my way to addiction!

01/21/2008 08:44 PM by Eileen Liles - Cedaredge and Delta Co Colorado Homes and Real Estate (Prudential Colorado Real Estate)


Congratulations on securing funding.  You guys have done a fantastic job with AR, even on a shoe-string budget.  I can't wait to see what comes next.

01/21/2008 09:08 PM by Fairbanks Real Estate Broker Jesse Clifton (Jesse & Kathy Clifton, REALTORS - 907.699.6024 - )


What an Extraordinary way to start the New Year!  Congratulations on the Funding Deal.  Every business needs capital and every business owner knows what it is to work hard and do without.  I hope this transaction turns out to be everything you have desired and more.

01/21/2008 09:29 PM by Lola Audu~ Audu Real Estate~ Grand Rapids, MI Broker


Congratulations.You guys deserve a pay check. You do good work, a lot of people are benefiting. Start-ups are never easy. Thanks for all the work you are putting into this project.

01/21/2008 09:47 PM by Bob & Carolin Benjamin - E Phoenix Arizona Real Estate (The Benjamin Team - Keller Williams Integrity First Realty )


Matt, 2.75 M for a brain fart is pretty darn good in my book. Congratulations and I think it's cool for you to share a little of the history of the company. I wish you all the very best w/ your future plans.

Colleen

01/21/2008 09:49 PM by


We appreciate how difficult it is to raise money, believe me, I know this path very well.  Anyway, you got the bucks now! Congratulations and remember the quote from Spiderman, "To whom much is given, much is expected." Based on what I have seen here so far, you guys are all on the right track.  Keep up the good work.

In the trenches. ktm

01/21/2008 11:28 PM by Prudential California Realty/Bristol Home Loans


Matt - I could not be happier for you and Lydia and all the people involved - i too know what it is to do a start up and what you all have put into it - I'm thrilled for you and know your future is so bright - I'm just a little sad missing Caleb at this special time - that would have made it perfect.  CONGRATS - can't wait to see what's coming next...

01/22/2008 12:09 AM by Clearwater Real Estate Clearwater Beach Condos & Homes for Sale- Cyndee Haydon (Belloise Realty)


Matt,

I hope you guys can get paid now, and pay back those HeLOCS on your homes :)  I hope this is everything you guys need, and that it works out for all.

01/22/2008 01:09 AM by Kathy McGraw ~ Calif Broker (CELLing Realty)


Matt, very pleased to see your hard work rewarded!

01/22/2008 01:53 AM by Patrick Kitano (Transparent Real Estate)


Hi Matt:  Congratulations on having arranged the financing that you have been seeking.  It is never easy to get one's creative juices flowing when you are under such pressure just to survive.  Take care...

01/22/2008 02:50 AM by Fort Worth Real Estate - - - Karen Anne Stone (RE/MAX Trinity)


Matt, This is great news. I know you will structure it well. Start up companies are always fun.  Keep up the great work

01/22/2008 06:20 AM by My Favorite Mortgage.net - Matthew J Blum


WOW!  I wish my 3 AM brain farts would come to something as successful as a concept of Active Rain Matt!  I had one yesterday and ended up logging on active rain at that ungodly hour and lost it!

A most sincere congratulations to you and your team!

01/22/2008 07:33 AM by Renee Burrows - Las Vegas NV Real Estate (Nevada Realty Solutions)


Matt,

Congratulations on securing the financing.  Great job and shows your determination to bring your 3 AM dream to fruition.

01/22/2008 07:36 AM by Diane Bell, Hilton Head Real Estate, Bluffton (Charter 1 Real Estate, Hilton Head, Bluffton, SC)


Great work. It is difficult to go through the challenge of maintaining the original concept and look for investment capital without strings (there are always some but you know what I mean).

Without revealing your souce did you end up with a VC type or were you able to locate a pool of private investors in the area?

 Since you went through the gauntlet I am interested to know where you ended up.

 I like to hear good news or success stories in a period of time where it seems people are hanging on the negative.

Thanks and happy trails.

Kirk

01/22/2008 11:21 AM by Kirk Williams


LOL....well congratulations. This place is and will be great. You all had a great idea and wonderful vision.

01/22/2008 01:05 PM by Christy Powers - Pooler, Savannah Real Estate Agent (Keller Williams Coastal Area Partners)


Congrats dont worry you will be cashing in here very shortly. Keep up the good work.

01/22/2008 01:27 PM by Adrian ALVARADO VICTORVILLE REAL ESTATE (Citywide Realty Alliance)


Matt, great to see you guys making it happen, after many long hours and hard work.  Keep it up!

01/22/2008 10:26 PM by Ryan Hukill - Edmond RealtorĀ® (Hukill Group - Paradigm Realty)


Matt,

With the news of the HV layoffs,how will this change the leads generation for A/R?

01/24/2008 08:20 AM by Scott Daniels Florida Real Estate 2.0. Agents Earn 100% Commission. (Florida List For Less Realty, Inc. Broker/Owner. )


I hope having a lead generation/sales company for a minority partner will not negatively impact AR.

01/24/2008 09:42 AM by Jim Houlihan (Coldwell Banker)


Scott & Jim, it won't have any impact.  We are operating under a very different business plan and model than Housevalues.  

01/24/2008 02:01 PM by Matt Heaton (ActiveRain Corp.)


Matt-I want to say congrats...boy you guys have worked hard and you deserve this... I imagine it's a nice relief and quite incredible to you...I have no problems with Housevalue's....and look forward to seeing what's in store!

01/25/2008 07:47 AM by Midori Miller-Daytona Beach Florida Real Estate Trainer (CENTURY 21 Sundance Realty)


Thanks for sharing. I am now imagining you eating ramen noodles and peanut butter sandwiches every day :)

01/26/2008 09:33 AM by A Crye-Leike Blogger, Angie Vandenbergh (Crye-Leike, Realtors)


You guys deserve a break - congratulations on the funding.  Keep up the good work.  This is a great family and I'm proud to be part of it.

01/28/2008 09:14 PM by Georgina M. Hunter R(S) e-Pro Maui Real Estate Sales (Jim Sanders Realty Inc. - Maui)


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Real Estate - Other: Matt Heaton (ActiveRain Corp.)
Matt Heaton
Bothell, WA
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ActiveRain Corp.

Office Phone: (425) 894-6658
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My ramblings about growing ActiveRain, the real estate industry and something I follow very closely, credit markets.  Why "The ActiveRain Addiction"?

The views expressed on my blog are my own and don't necessarily reflect the views of ActiveRain Corp.


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