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Highly Scalable, Virtual Brokerage

Q4 2013 Overview
Contains Forward-Looking Statements
Our Mission…
…is to REINVENT
home buying and selling
through the use of
technology.

5 mm home transactions per yr => $1 trillion ind.
=> $50 billion market for transaction costs
Industry = Ripe for Reinvention
• Fundamental shift in the
nature of buyers and
sellers
• Much heightened
sensitivity to transaction
costs

• Housing rebound
About Us

Company

Team

Founder

Jim Lesinski, Founder & CEO
10+ Yrs Executive in three Fortune 500 level companies
4 Years Vice President Sales & Marketing at nation’s largest
home builder
Licenses: RE Broker (MN)* RE Agent (MI) * Builder (MI)
BBA, Univ of Michigan
Doctoral Study in Consumer Behavior, Duke University

Steve Ginal,
Technology

Aaron Schumm,
Operations

BS, Marquette
MBA, Minnesota
Under Contract

BS, JD
Licensed Broker
Former Keller Williams

Delaware LLC
Headquarters: Minneapolis
Funding to Date: $1.85 M (100% Angel)
Our Progress
2.
1. Software Development
& Testing in the “For Sale By Owner Space”
30 Months

5 Mos.

Today

3. Commercial Launch

30 Days
Phase 1: Software = Our Foundation

Please demo
our services &
view our
videos
Phase 2: Brokerage & Licensing

Buying Side

Listing Side

Software
+

$$$

$$$
Buy Side Economic Model
Behind the scenes rebate of commission already
embedded in a transaction

Step 2

Buyer
1.2%

Step 1

Seller
Any Broker (6%)

Step 4

Step 3: Co-Broke Fee is Transferred (2.7%)

Applies to Broker Listed Property Only
Listing Side Commercialization
Full Service
+ Electronic Capability
+ Independent
Valuations
AS LOW AS

4.25%
Listing Side Business Model
Comparison of Models on a
Co Broke Transaction
Gross Commission
Paid to Buying Agent
Paid to Listing Agent (70-30)
Internal Salary Expense
Additional Services
Commission Retained

250000 Home
Empower Realty
%
$
4.75
11875
2.70
6750
2.05
5125
0.00
0
0.23
585
0.31
775
1.51
3765

Rebate (Unrepresented buyer only)
%
Gross Commission
4.25
Paid to Buying Agent
0.00
4.25
Paid to Listing Agent (70-30)
0.00
Rebate to Buyer
1.20
Internal Salary Expense
0.23
Additional Services
0.31
Retained
2.51

$
10625
0
10625
0
3000
585
775
6265

Planned
% Trans

Avg

Conventional
%
$
6.00
15000
2.70
6750
3.30
8250
2.31
5775
0.00
0
0.00
0
0.99
2475

4390

Vs

75%

25%

2475

+77 %
Competitive Landscape
Search

Transaction Mgmt
Pro Forma

Revenue
(Millions)

Net Income
(Millions)

250

50

200

40

150

30

100

20

50

10

0

0
2013

Trans.
-50
Sides

2014

2015

2016

2017

5

244

2331

8164

17,783

Trans.
-10
Sides

Results shown are based on business plan, which is
ubject to change as the business evolves.
Pro Forma

Revenue
(Millions)

Net Income
(Millions)

250

50

200

Goal:

Benchmark:

40

150

2.1%

10-25%

30

100

Market Share
in each market after
4 years in that market

Typical Share
Of Local
Market Leader

20

50

10

0

0
2013

Trans.
-50
Sides

2014

2015

2016

2017

5

244

2331

8164

17,783

Trans.
-10
Sides
Exit Strategy
Strategics:
Mortgage, Title
National
Broker
Networks

Real Estate Portals
(Zillow, Trulia,
Realtor.com)

Public
Offering

Transaction sites
eBay, Priceline,
Amazon
Capital Requirements
• Capital Need:
– Now: $225,000 ($150,000 minimum total commitments to
close) for working capital to further support our Minnesota
launch
• Primary uses: Marketing Awareness + Operating Expenses
through spring 2014
– Future: $1 million for growth capital -> projected to be
sufficient for funding future growth according to plan

• Offer: Preferred equity / Convertible Debt
– Investor-friendly cap table (no debt, only small amount of
preferred equity)
– Angel-Tax Credit Certified (prior years) = 25% REBATE of
Invested Capital (no state income or residency required)
Jim Lesinski, Founder & CEO: jim.lesinski@EmpowerRealty.com / O: 952-358-7308

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Highly Scalable Virtual Brokerage Q4 2013 Overview

  • 1. Highly Scalable, Virtual Brokerage Q4 2013 Overview Contains Forward-Looking Statements
  • 2. Our Mission… …is to REINVENT home buying and selling through the use of technology. 5 mm home transactions per yr => $1 trillion ind. => $50 billion market for transaction costs
  • 3. Industry = Ripe for Reinvention • Fundamental shift in the nature of buyers and sellers • Much heightened sensitivity to transaction costs • Housing rebound
  • 4. About Us Company Team Founder Jim Lesinski, Founder & CEO 10+ Yrs Executive in three Fortune 500 level companies 4 Years Vice President Sales & Marketing at nation’s largest home builder Licenses: RE Broker (MN)* RE Agent (MI) * Builder (MI) BBA, Univ of Michigan Doctoral Study in Consumer Behavior, Duke University Steve Ginal, Technology Aaron Schumm, Operations BS, Marquette MBA, Minnesota Under Contract BS, JD Licensed Broker Former Keller Williams Delaware LLC Headquarters: Minneapolis Funding to Date: $1.85 M (100% Angel)
  • 5. Our Progress 2. 1. Software Development & Testing in the “For Sale By Owner Space” 30 Months 5 Mos. Today 3. Commercial Launch 30 Days
  • 6. Phase 1: Software = Our Foundation Please demo our services & view our videos
  • 7. Phase 2: Brokerage & Licensing Buying Side Listing Side Software + $$$ $$$
  • 8. Buy Side Economic Model Behind the scenes rebate of commission already embedded in a transaction Step 2 Buyer 1.2% Step 1 Seller Any Broker (6%) Step 4 Step 3: Co-Broke Fee is Transferred (2.7%) Applies to Broker Listed Property Only
  • 9.
  • 10.
  • 11. Listing Side Commercialization Full Service + Electronic Capability + Independent Valuations AS LOW AS 4.25%
  • 12. Listing Side Business Model Comparison of Models on a Co Broke Transaction Gross Commission Paid to Buying Agent Paid to Listing Agent (70-30) Internal Salary Expense Additional Services Commission Retained 250000 Home Empower Realty % $ 4.75 11875 2.70 6750 2.05 5125 0.00 0 0.23 585 0.31 775 1.51 3765 Rebate (Unrepresented buyer only) % Gross Commission 4.25 Paid to Buying Agent 0.00 4.25 Paid to Listing Agent (70-30) 0.00 Rebate to Buyer 1.20 Internal Salary Expense 0.23 Additional Services 0.31 Retained 2.51 $ 10625 0 10625 0 3000 585 775 6265 Planned % Trans Avg Conventional % $ 6.00 15000 2.70 6750 3.30 8250 2.31 5775 0.00 0 0.00 0 0.99 2475 4390 Vs 75% 25% 2475 +77 %
  • 15. Pro Forma Revenue (Millions) Net Income (Millions) 250 50 200 Goal: Benchmark: 40 150 2.1% 10-25% 30 100 Market Share in each market after 4 years in that market Typical Share Of Local Market Leader 20 50 10 0 0 2013 Trans. -50 Sides 2014 2015 2016 2017 5 244 2331 8164 17,783 Trans. -10 Sides
  • 16. Exit Strategy Strategics: Mortgage, Title National Broker Networks Real Estate Portals (Zillow, Trulia, Realtor.com) Public Offering Transaction sites eBay, Priceline, Amazon
  • 17. Capital Requirements • Capital Need: – Now: $225,000 ($150,000 minimum total commitments to close) for working capital to further support our Minnesota launch • Primary uses: Marketing Awareness + Operating Expenses through spring 2014 – Future: $1 million for growth capital -> projected to be sufficient for funding future growth according to plan • Offer: Preferred equity / Convertible Debt – Investor-friendly cap table (no debt, only small amount of preferred equity) – Angel-Tax Credit Certified (prior years) = 25% REBATE of Invested Capital (no state income or residency required)
  • 18. Jim Lesinski, Founder & CEO: jim.lesinski@EmpowerRealty.com / O: 952-358-7308