Fractions and Division: Why Fractions Aren't Always Enough

Startups Weekly: A New Perspective on Startup News

Welcome to Startups Weekly, offering a human-centered analysis of this week’s most relevant startup news and emerging trends. To receive this directly in your inbox, subscribe here.

Fractional: Co-ownership of Real Estate

Recently, I covered the launch of Fractional, a company aiming to simplify the process of co-owning real estate with friends and even individuals you haven't met before. Stella Han and Carlos Treviño, the co-founders, initially connected while working at Affirm, a prominent buy now, pay later service, due to their shared upbringing within real estate-focused families.

Despite Affirm’s philosophy of “pay at your own pace,” the founders recognized a disconnect with the substantial time commitment and financial burden associated with property ownership. This realization ultimately sparked the concept behind Fractional.

Beyond Accessibility: The Social Dynamics of Alternative Investing

My detailed report explores the specifics of Fractional’s offerings and their recent funding round. However, today’s focus centers on a particularly insightful portion of my conversation with Han, the co-founder.

We discussed how the future of alternative investments hinges on broadening access to asset classes traditionally reserved for a select few. This trend is evident in areas like private equity, art collecting, and now, real estate.

While reducing the initial investment amount is crucial – a key feature of Fractional – the social element is equally important. Can a group of individuals be effectively informed about the potential benefits of investing in a home compared to a standard index fund? Can the inherent hesitations of entering into business partnerships with friends be overcome?

Furthermore, can contingencies be planned for unforeseen life events, such as a group member needing to liquidate their investment before anticipated? These questions present more complex challenges than simply making homeownership more financially attainable. Fractional’s success, I believe, will depend on fostering a collaborative investment environment.

Preparing for the Unexpected

Fractional is proactively addressing potential challenges through careful curation. Han explained that they are building investment groups centered around specific properties, aiming to unite individuals with similar investment goals.

“It’s not practical to combine someone intending to quickly flip a property with someone planning a five-year hold,” she stated. By identifying and addressing fundamental differences upfront, and involving legal counsel, the startup is working to alleviate initial concerns.

However, like any venture promising access to a new asset class, Fractional’s biggest challenge will be establishing clear governance and transparent expectations.

Lessons in Collaboration

Simply dividing things into fractions isn’t sufficient for resolving disagreements, a lesson applicable to both startups and even everyday situations like dividing a pumpkin pie. This newsletter also includes previews of upcoming gift guides and discussions on estate management.

You can continue to follow my work on Twitter @nmasc_ or on Instagram @natashathereporter.

Enhancing Your Home and Work-From-Home Environment: A Gift Guide RoundupTechCrunch is initiating the release of its yearly gift guides. This is an annual tradition where we curate specialized and detailed wish lists.

These guides are designed to assist individuals in selecting appropriate gifts. The selections cover a broad spectrum, from devices to improve your remote workspace to items that can alleviate feelings of isolation.

Key Updates: We have already released several gift guides focusing on specific areas.

These include guides for the home office, optimizing video conferencing setups, and transforming houses into smart homes.

Furthermore, wish lists have been compiled for enthusiasts of houseplants and children interested in STEM toys.

This extensive coverage reflects the increased time spent at home recently.

Regarding hardware developments:

• Consider subscribing to Actuator, a forthcoming newsletter by Brian Heater dedicated to the field of robotics.
• For the purposes of my gift guide, please send me a direct message identifying your preferred solo entrepreneur. (The reasoning is intentionally vague to build anticipation.)

Additional Resources

The published guides offer a range of ideas for improving both productivity and comfort.

They cater to diverse interests, ensuring there's something for everyone on your gift-giving list.

Stay Tuned

More gift guides are planned, so continue to check back for further inspiration.

We aim to provide comprehensive recommendations to help you find the perfect present.

Spotlight on This Week's Rising Startup

This week’s featured startup is New Culture. As regular podcast listeners are aware, I have a particular fondness for companies focused on innovative food technologies, especially those involving cheese.

New Culture recently secured $25 million in seed funding. This investment will be used to facilitate the commercial launch of their vegan mozzarella alternative.

Key details: The company asserts that its cheese production method is significantly more environmentally sustainable than traditional dairy cheese manufacturing. Conventional dairy cheese production can consume as much as 56 gallons of water per ounce.

Furthermore, New Culture highlights improvements in land utilization as a benefit of their process.

Other noteworthy funding rounds:

• Niantic, the company behind Pokémon Go, has raised $300 million, achieving a $9 billion valuation. Their focus is on developing a metaverse integrated with the physical world.
• Fonoa, an Irish company, secured $20.5 million in funding. They provide tax compliance solutions for rapidly expanding digital businesses.
• Abeg, a Nigerian fintech company, is currently facing challenges following a period of rapid growth to a large user base.
• Royal, a startup specializing in NFT-based music rights, received a $55 million investment, led by a16z Crypto.

These companies represent a diverse range of innovation across various sectors.

The Importance of Estate Planning

While the subject can seem daunting, estate planning is a crucial aspect of financial responsibility. It’s a topic recently highlighted in the show “Insecure,” and often avoided due to its sensitive nature.

Renee Fry, CEO and founder of Gentreo, recently provided essential estate planning advice for founders in a TechCrunch+ article. These recommendations apply to both individuals with substantial wealth and those who own simpler startups.

Dynamic Estate Plans

A key takeaway from Fry’s insights is that estate plans aren’t static documents. They require regular updates, particularly for those leading successful businesses.

The ever-changing nature of a business’s prosperity is invigorating during its growth phase. However, this dynamism can introduce complexities when considering future succession planning.

Succession and Related News

Consider these recent developments:

• Wave is introducing a data-driven approach to the field of mental health.
• India is formulating legislation that may prohibit most private cryptocurrencies, with limited exceptions.
• Amazon and Apple have been fined $230 million by Italy for alleged collusion with resellers.
• The issue isn't necessarily data collection itself, but rather how companies utilize the information they gather.

These events underscore the need for proactive planning and adaptation in both personal and professional spheres.

About TC

We invite you to explore our latest offering, the TechCrunch podcast, Found. This podcast, co-led by Darrell Etherington and Jordan Crook, delves into the methodologies of founders and embraces the complexities of their journeys.

Found focuses on the practical approaches founders employ, with a particular interest in the challenges and pivots they encounter.

Podcast Focus

The core of Found lies in understanding the processes founders utilize to build and scale their companies.

Etherington and Crook aim to uncover the nuances of entrepreneurial endeavors, highlighting both successes and setbacks.

• The podcast examines the decision-making processes of founders.
• It investigates the strategies used to navigate market changes.
• Found provides insights into the resilience required for startup success.

Listeners can expect a candid exploration of the realities faced by those establishing new ventures.

Weekly Tech & Finance Highlights

As reported by TechCrunch

Tidal is making a financial commitment to direct payments for artists, representing a move towards more equitable compensation within the streaming music industry.

The initial public offering of Paytm has encountered further difficulties and challenges following its market debut.

The economic impact of smaller content creators is proving to be substantial and increasingly significant.

Klarna is introducing a ‘Pay Now’ feature for users in the United States, alongside the forthcoming release of the Klarna Card.

Seaya Ventures and Cathay Innovation have jointly launched a $125 million fund specifically targeted at supporting startups operating within Latin America.

Featured on TechCrunch+

The benchmark for substantial startup valuations has shifted, with $10 billion now representing the new standard for a ‘unicorn’ – necessitating a revised valuation framework.

Changpeng Zhao, the CEO of Binance, discussed the evolving regulatory landscape and the platform’s operational activities throughout the African continent.

Amidst a dispute involving Amazon, Visa may experience a setback, potentially creating an opportunity for Affirm to gain market share.

A survey of growth marketing professionals explored strategies for allocating a $25,000 budget during the first quarter of 2022.

Five essential slides have been identified for SaaS sales and revenue leaders to incorporate into their board presentations.

— N