Rebuild the world by backing the right founders.
At CRECI Ventures we seek to identify and back founders and founding teams with a clear vision about the future of the built world, and inexhaustible passion to bring those ideas into existence. We also aim to be hands-on investors, immediately adding value and de-risking our investments by providing strategic guidance, and unreserved access to our decades-deep network of partners and experts.
Proptech
Largest economic categories in the US. Construction of industrial, commercial and residential real estate is 5% of US GDP, and real estate leasing and related activities account for an additional 11% of US GDP.
Lagging productivity. It is well known that the productivity per FTE in construction dramatically trails national averages, and that there is a massive skilled workforce gap. Technology is fundamentally leverage for individual productivity, and for scaling knowledge transfer.
Post-COVID and macro inflections. The future of work accelerated by COVID is still rippling through the CRE market, and a period of high interest rates are upsetting investment calculations across the real estate development stack. This opens opportunities for founders who can alleviate the pain points caused by these pressures.
Government regulation and permitting. Regulation is a massive but unavoidable friction in real estate development. Technology can streamline compliance through automated recording, tracking, and aggregation of the data needed to comply with myriad regulations.
Proptech challenges
Hard to change existing patterns of work. We are also realistic about the way technology will make its inroads into real estate. Real estate development, construction and distribution is an industry with decades of ingrained “patterns of getting things done”. We believe it is the founders with firsthand experience working within the existing paradigms that will ultimately be most successful.
Highly fragmented markets. Real estate’s necessary geographic fragmentation leads naturally to a fragmented market in financing, construction, design, distribution and management. This presents a great challenge to founders as they go to market and scale.
Core Tenets
Our investment decisions into individual proptech companies are further guided by three fundamental tenets. Roughly speaking, our tenets begin at the highest possible level– the market – and graduate downward into smaller scales, ending at the individual entrepreneur.
Here are the three tenets in more detail:
Market/technology movements. ‘the data centricity thesis. We believe that an increasing number of human and business processes are going to become modeled digitally. This is a simple extrapolation from the past decade of ‘digital transformation’. As a result, businesses will continue to look primarily to data and interpretations of that data when making critical decisions i.e. ‘data-driven decision making’. What Meta and Google did for quantifying online marketing decisions, so too will thousands of other businesses do for millions of other economic decisions. Furthermore, it is our belief that the software layer will become more and more commoditized, in fact, the UI layer may dissolve completely in the age of AI generated code. In this world, it is the underlying data which cannot be commoditized, and provides the necessary ‘intelligence’ to applications, which will accrue value. Simultaneously, we believe it is critical to stress the importance of human insight, and ‘gut feelings’ for particularly complex decisions. After all, if starting a new business in the first place were simply a calculation, no one would choose to make that decision.
Business properties. ‘the post in-market inflection point’. At the early stage, we prefer companies that are past the most volatile course corrections in their product and go-to-market maturation processes. A history of surviving volatility signifies that the founders have the grit to persevere, and have learned enough about their customers and business model to press forward more quickly, with a reduced risk of future business volatility. This post in-market inflection thesis is inspired (loosely) by Nassim Taleb’s concept of ‘antifragility’, or the idea that systems subjected to and tested by short term volatilities are more likely to survive.
Founder characteristics. ‘the honest founder mandate’. We believe that most companies succeed not because they pursued the best idea, or were started by the most intelligent founders, but because they had the most determined founders. We further believe that the most determined founders are those who are honest with themselves, meaning, they honestly care about the product they are bringing into the world. Founders that answer that question in the affirmative are fed with greater enthusiasm, and will lead their teams with more energy and grit. We also believe that honesty often portends humility, and that great leaders are very often those with a healthy sense of their own limitations. We prefer ‘humble warriors’ to ‘fearless leaders’.
We believe that by keeping these three tenets at the top of our allocation decisions into proptech, we will back the right founders and help rebuild the world.
If this thesis resonates with you, please reach out.