"Wow, it sure feels good to be out of that rat race." These words were spoken on a dreary day in October 2004 as the members of the RentalHouses.com team prepared for an investor pitch in a towering downtown office building overlooking a morning traffic jam on Interstate 64. Though they were experiencing the excitement of entrepreneurship that morning, all who have been through the process of creating an enduring new business would agree that it is paved with challenges and rewards.

Entrepreneurs don’t easily forget the joys and pains that go along with seizing opportunity, and increasingly, many repeat the experience time and again. We’ve observed some recent trends in entrepreneurship, including the "on again off again entrepreneur" and the "serial entrepreneur."

Robert Massey, Jr., Denis Frankenberger, Robert Massey, Sr. and John Archer have all rightfully earned the title of entrepreneur. When I sat down with them in June of 2004, we acknowledged the challenges and rewards that awaited them in their quest to nationally launch RentalHouses.com. After several months of strategy sessions and business plan development, they were finally ready for the daunting task of pitching their concept to investors. Following only three months of fundraising efforts, RentalHouses.com had obtained $3 million dollars to grow their venture.

The accomplishments of RentalHouses.com are based on a variety of factors that improve the viability of all new business opportunities: deep industry experience, understanding your markets, seizing opportunity, and extensive business planning.

After decades of experience in real estate and property management with his father, Robert Massey, Sr., Robert Massey, Jr., president of RentalHouses.com, began forming the vision for the company in 1997. Massey aimed to create an online destination for real estate rental units - single-family houses, small apartment complexes, duplexes and the like - that comprise over 75% of the 33 million rental units nationwide. By 2000, RentalHouses.com began testing its concept of developing searchable, detailed, full-color property descriptions with the intention of later generating revenues from property listings and third-party advertisers. The web-based concept was refined and improved tremendously by the time RentalHouses.com was ready to expand its presence nationally in 2004.

RentalHouses.com approached their fundraising efforts wisely by raising capital before they really needed it and since obtaining the capital they needed to expand nationally, there have been several exciting developments. RentalHouses.com has extended their pool of property managers and rental unit owners and now have a presence in 34 states; they have hired additional leadership to round out the management team; and they are establishing relationships with search engine companies and a major national real estate company. The RentalHouses.com business plan envisions a nationwide presence in all fifty states by mid-2005, with international expansion planned thereafter.

Robert Massey, Jr. noted that one particular hurdle was gaining momentum. Initially, there was reluctance to invest without having others already on board and some investors voiced willingness to commit only after a certain level of funding was reached. Though RentalHouses.com was able to overcome this challenge, Massey recommends having a plan B in place in the event that desired funding levels are not reached. Specifically, Massey recommends establishing a threshold above which the initial persons who agree to fund the venture will be obliged to remain even if the total amount to be raised is not reached. In the case of RentalHouses.com, the founders had already infused some of their own cold, hard cash and without a doubt, establishing credibility with potential investors becomes much easier when an entrepreneur’s own resources and cash investments have supported the launch of the venture.

Additionally, RentalHouses.com is a scalable business model serving a market with excellent growth potential. Their service enables a group of customers who have largely not utilized the Internet for their marketing needs. While companies such as Apartments.com and Rent.com have been successful in matching lessors and lessees in larger apartment community developments, owners of smaller properties and rental houses have continued to rely on traditional and less effective methods to reach potential renters. Their service allows property managers and owners to save valuable time, money and resources when leasing rental properties.

With existing customers, readily available and committed resources, and a proven management team, the potential for the continued success of this venture seemed viable if not yet already proven. As Guy Kawasaki, author of The Art of the Start and founder of Garage Ventures notes, “traction counts the most because you’ve demonstrated that people are willing to open their wallets, take out money, and put it in your pocket. That’s the bottom line.”

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Many business professionals and entrepreneurs are using a website known as LinkedIn to reach out to trusted friends and contacts within their social and professional networks. This venture backed company was funded by Sequoia Capital, the same firm that helped launch Google, Yahoo and PayPal. Kelly Perdew, Donald Trump's recent winner on The Apprentice, uses LinkedIn to maintain and grow his professional network. A venture capitalist in New York City uses the service to perform due diligence and hire new talent. Both of us at Avocado Group are members of this free service and encourage you to consider joining if you haven’t already done so!

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