ActiveRain secures $2.75 Million Series A minority investment

By
Real Estate Agent

When we first set out to create ActiveRain, we wanted to bring the real estate industry together in a way that never existed before – a way that many thought impossible. What we imagined but never expected was the impact a community like this would have on its members. 

Since our launch in June of 2006, we have been marked by two extraordinary achievements: our exponential growth and how we accomplished it without any institutional funding. We never budged from our pledge of free membership -- which now extends to over 65,000 real estate professionals. And we’ve steadfastly maintained open access to useful real estate information to the more than 10,000,000 visitors to our network of sites.

I am proud of what ActiveRain has accomplished so far, but there’s more to do. There is more you have asked us to do. To accomplish this we needed financial resources. Which brings us to a special announcement I want to share with you. ActiveRain has accepted a minority capital investment from HouseValues designed to help us grow and become more of what we had always hoped we could be.
 
A great deal of thought and consideration went into this decision. I’d like to share some of that with you.   
 
2007 taught us a few things. The biggest perhaps is how prudent we need to be about who we do business with. Despite the many hands held out to us over the past few months, the right one had to gain a firm grip on our trust. HouseValues did that – above all others.

Financial terms were important to us, but throughout the entire process we continually asked ourselves "who understands us and our culture the best?” and “Who will help us keep our commitments to the community? HouseValues, a local company with a wealth of experience in our industry, hit the mark.

Daniel Burnham, the visionary architect from Chicago, once said, "Make no little plans; they have no magic to stir men's blood and probably will themselves not be realized."

We never set out with little plans and we are going forward with big ones.  The future of this community – and this business -- rests on three pillars: ActiveRain (our professional network), Localism (our consumer destination), and our soon-to-be-released Outside Blogging platform. These things stir our blood. We hope they will stir yours.

We can barely contain our excitement over the promise that this year offers. Our community has a new member and they are committed to seeing it stay exactly as it is and becoming exactly what it desires. 

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Rainmaker
468,306
Alexander Harb
Knights Investing - Mesquite, TX
Dallas, Texas Real Estate Investing

I was with HV for about 10 months and turned one deal...I never got my money invested back.....

I became a Certified HouseValues Professional and my thoughts were to get into the Presidents Club some day.... so I aimed high......

Most of the people I called at night (up to 50 calls per night, EVERY NIGHT) were just so happy about the free CMA I did for them..... I did hundreds of them over the course of my HouseValues stay and I had a database of over 450 people and had bought 2 zip-codes to the tune of $750.00 per month.

1 transaction in 10 months was a little too much to take.......or too little, if you get my meaning.....

I went to two HV seminars praising the system they have (I DID LOVE the drip e-mail system they have BTW and the contact management system was great also)...I felt like a fool after all was said and done......

With all the marketing materials I bought and the cost of the zip-codes I had over time (aprox. $7500.00) I lost about $4500.00 after all was said and done....... maybe I should have looked into different zip-codes, but I would have had to start all over again building my database..... I do not think I will be doing business with HouseValues any time soon after what happened to me.

I hope AR AND HV do well...I am staying with AR and I might just buy into that outside blog they are going to let us know about in February.....

 

Jan 25, 2008 06:58 AM #148
Rainer
51,348
Debra Drummond
RE/MAX Gallery - Plymouth, MI
MichiganMoves Real Estate in SE Michigan
My experience was similar to yours Alexander, and I also loved the drip e-mails. What are you using now instead of them? I'm still searching...
Jan 25, 2008 07:50 AM #149
Anonymous
Anonymous

House Values as far as I know, no longer offers set zipcodes for specific subscribers. I can only imagine how dominate my business would be if they would let me own 3 or 4.

Jan 25, 2008 12:34 PM #150
Rainmaker
468,306
Alexander Harb
Knights Investing - Mesquite, TX
Dallas, Texas Real Estate Investing

Debrah...I use POINT 2 Agent...I pay $39.95 for a FANTASTIC real estate website I can practicallu customize myself....PLUS drip e-mail AND contact managment.....

HOWS THEM apples....?

I will send you an invite to them.....

Just send me your e-mail address through ActiveRain....

=-)

Jan 25, 2008 07:15 PM #151
Rainer
103,088
Angie Vandenbergh
Crye-Leike, Realtors - Memphis, TN
A Crye-Leike Blogger
Thanks for sharing so openly with everyone here. It is nice to know what is going on and what your future plans are. I look forward to checking out the outside blogs. I have been investigating possibilities with outside blogs. I am actually going to have to make a decisison on it in the coming weeks, so the sooner the better.
Jan 26, 2008 01:01 AM #152
Anonymous
Anonymous

Two things about HV:

 1.  I'm not a huge fan of their specific business practices, but their business model is sound.  So much agent dissatisfaction comes as a direct result of agents not understanding how to nurture an Internet lead.  Did you ever wonder why lead generators will rarely, if ever work on contingency (they get paid when you do)???  It's because agents are notorious for mangling good Internet leads.  Why would any lead generator sink resources into acquiring good leads and then sit around hoping that the purchasing agent knows what to do with them?

 2.  It's obvious what HV gets from this deal.  Their brand is toast in this industry and now they get to hook their star to a hugely respected brand in that industry.  That's worth $2.75M right there, and if you have to fire an army of internal personnel that are sitting around twiddling their thumbs in this market to pony up the price of admission, that sounds like a sound business move on their part.

Any other questions, people? 

 

 

Jan 27, 2008 03:50 AM #153
Rainmaker
1,085,646
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas
No questions; thanks for the call by the way..
Jan 27, 2008 01:10 PM #154
Rainer
29,341
Linda Sanderson
Coldwell Banker Solano Pacific - Benicia, CA
Just want to say thank you for starting AR.  It has been such a learning experience for me.  Congratulations for holding steadfast to your original dreams and goals, and moving forward to achieve them.  Best of luck with your ventures.  We are all along for the ride, and it's great!
Jan 29, 2008 01:57 AM #155
Rainmaker
122,069
Brett Tousley
Keller Williams Realty - Richland, WA
Tri Cities Real Estate | (509) 420-0013

I'm not surprised at all that AR was seeking capital, but choosing HV...That's a jaw dropper!

I'm sure it was a well thought out move and I wish you the best.

Jan 29, 2008 05:18 PM #156
Rainmaker
1,085,646
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas
Maybe Active Rain was assuming the vast majority of the professionals here would be about THEIR decision to absorb the needed $ to grow their business.
Jan 31, 2008 08:50 AM #157
Rainer
13,103
Dennis Pease
Coldwell Banker Coast Real Estate - Florence, OR

I am disappointed to see so many Congrats comments. I have always thought highly of AR, and lead generating companies are on the other end of the spectrum. To me agents that support any lead generating company do not understand how to run their business and should go get a job. That may seem like a harsh statement but I just can't believe how short sighted people can be.

Round one; HV wins and gets their foot in the door, Agents lose as we usually do because the majority don't get it, AR sells their souls to the devil and eventually all our private information too, regardless of what they claim now. 

Lead generating companies always claim to help agents and to be good for our industry, nothing could be further from the truth. 

Feb 07, 2008 02:42 PM #158
Anonymous
John Hurbon newbie

Dear Jonathan,

Thanks for your contribution to worldwide marketing and real estate idea networking. There outta be an  e-book compiling these genius ideas.

I want to create better script for the Flyers...Any suggestions or great examples you can lead me to ?

Newbie

John Hurbon

Benson, Arizona                                                                Google this...           Benson Horse Property

Feb 07, 2008 05:49 PM #159
Rainmaker
1,085,646
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas

I am disappointed to see so many Congrats comments. I have always thought highly of AR, and lead generating companies are on the other end of the spectrum. To me agents that support any lead generating company do not understand how to run their business and should go get a job. That may seem like a harsh statement but I just can't believe how short sighted people can be.

Round one; HV wins and gets their foot in the door, Agents lose as we usually do because the majority don't get it, AR sells their souls to the devil and eventually all our private information too, regardless of what they claim now. 

Lead generating companies always claim to help agents and to be good for our industry, nothing could be further from the truth. 

Dennis,

I am really confused by your post.

You said agents that support lead companies should go get a job and that they don't know how to run their business. Your statement isn't harsh, it's reckless and has no merit and includes very little logic, if any at all.

You sound like a prospect. Afraid of losing your identity and personal information over the net. This demonstrates your lack of understanding on how marketing has changed. Our private information? What are YOU talking about Dennis? How many agents with active rain want to remain private? Googling, advertising and spreading OUR information is crucial for OUR EXPOSURE! Anyone at anytime could come to Active Rain, or any association to gather Realtors phone numbers and emails. They don't need to invest 2.75 million dollars to do so.

Are you implying that you would rather find the prospects yourself than pay someone to do it for you? Do you think lead generation companies are stealing your/our hard work & opportunity to find our own business?

Welcome to 2008 Dennis. Everything is going ON-LINE. INTERNET INTERNET INTERNET! Spend your time, money and efforts doing your best to position yourself Dennis, at the end of they day YOU will be GLAD to take Internet referrals and leads from you sources, right? No one is taking anything away from you!  

If you were given $12,000 to advertise what would you do with it? What could you guarantee yourself with lead volume? 

Please, if you are going to post "harsh words" as you put it, be specific, use examples and explain your blanketed rudeness. I rely on my on-line leads and am grateful to get them. I have a job that I love. I am successful and will continue to grow my business with traditional methods along with the EVER changing Marketing world - which includes on-line prospects. I do "get it." What most of the "older" been around the block a few times agents DON'T GET is the INTERNET! Don't be afraid of technology, change, newer ideas and ability to welcome DIFFERENT opportunities.

 

Feb 08, 2008 03:24 AM #160
Rainmaker
39,905
Concetta Pepenella-Timmons
Remax Metro Staten Island, New York - Staten Island, NY
Associate Broker

HouseValues is a lead generation company, doesn't that conflict with ActiveRain?

Johnathan writes: "ActiveRain and HouseValues are seperate companies.  ActiveRain will continue to execute against the same business models we've planned on all along; for example selling services such as "Outside Blogs" and generating revenue from advertising.   We have no plans to be a lead generation company."

 

I got the call yesterday from HouseValue to sign up for their service. The sales person said he found me in Activerain. ( I did also have a prior subscription with HouseValue, only it didn't work out at the time.) Can we assume HouseValue will use ActiveRain as a member fishing pond?

Feb 27, 2008 11:43 PM #161
Rainmaker
1,085,646
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas

 

Concetta,

 You sound very convinced about the future of AR. You said..   "ActiveRain will continue to execute against the same business models we've planned on all along; for example selling services such as "Outside Blogs" and generating revenue from advertising.   We have no plans to be a lead generation company"

With all do respect, How Do You Know?

Why would HouseValues conflict with ActiveRain?  McDonalds had has little toys from the latest children movies in the bags. Does that mean MGM & McDonalds are confliciting? It's business. $$$ that's all. They both got something.

      YES. You CAN assume HV would use AR for a fishing pond. What else would they do with it? Donate the $?

Feb 28, 2008 02:29 AM #162
Rainmaker
39,905
Concetta Pepenella-Timmons
Remax Metro Staten Island, New York - Staten Island, NY
Associate Broker

Greg,

I didn't write the first paragraph of my comment. I copied it from Johnathans blog to comment on. I added quotation marks and credit.

My comment pertains to the last line,  "We have no plans to be a lead generating company."

The call I received from HouseValues makes Activerain a lead generating company...I am the lead generated from AR to HV.

Feb 28, 2008 04:48 AM #163
Rainmaker
1,085,646
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas
It looks different than before, oh well...
Feb 28, 2008 04:58 AM #164
Rainer
223,918
Find a Notary Public needAnotary
QEC Internet Services - Long Beach, CA
Why so many tome outs with the website lately?  Does that have anything to do with the funding.  For about the last month or more there are a lot of "Unexpected Error Messages"
Mar 14, 2008 04:19 AM #165
Rainmaker
32,905
Bob Wilson
SanDiegoHomes.org - San Diego, CA
Now that the dust has settled a bit, it is interesting to see that HV has likely seen little ROI with this deal. 
May 03, 2008 04:14 PM #170
Rainmaker
288,406
Tim Bradley
Contour Investment Properties - Jackson Hole, WY
Commercial Real Estate Expert in Jackson Hole, WY

I'm not personally a fan of House Values. I became aware of them when they were selected by the Motley Fool as a recommended stock a year ago or so. Did my research, and was not impressed with the business model, and there was a tremendous amount of negative fedback within the Motley Fool community. The stock subsequently tanked and the Fool sold their position. Good for you for acquiring much needed capital, though, as I believe in ActiveRain!

Tim

Jun 12, 2008 04:07 PM #171
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