In the heart of Silicon Valley, amid the Dotcom era’s whirlwind, Andrew Luong’s upbringing was anything but typical. Raised by immigrant parents in a middle-class household, Andrew’s early experiences shaped his perspective on financial security and the value of passive income.
His venture, Doorvest, attracted funding from top-tier investors like Unpopular Ventures, Visary Capital, Bragiel Brothers and Pollen Street Capital.
In this episode, you will learn:
- An upbringing and early financial struggles shaped a perspective on security and the value of passive income.
- Despite academic challenges, entry into the startup world at Misfit Wearables provided a platform for accelerated growth.
- The approach to real estate investment emphasizes the power of consistent, disciplined action, leading to the acquisition of over ten properties.
- Doorvest is envisioned as the ‘Amazon for Real Estate,’ aiming to simplify the investment process for a wider audience.
- Doorvest’s funding strategy combines equity for platform development and operational aspects and debt for property acquisition and renovation.
- The fundraising journey underscores the value of building relationships with successful founders and driving momentum in the process.
- The journey emphasizes the importance of genuine passion for one’s venture and the need to take decisive action in the entrepreneurial journey.
For a winning deck, see the commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here).
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About Andrew Luong:
Andrew Luong is the CEO and Co-Founder of Doorvest. This entirely online platform simplifies the process of buying and managing an affordable, high-yield rental home out-of-state through a personalized approach to buying real estate that helps you build equity and increase wealth.
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Read the Full Transcription of the Interview:
Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So today we have ah another exciting founder a founder that you know it’s going to teach us a thing or 2 about raising money. You know whether it’s on equity or on debt about product market fit. About navigating you know the market too and again you know building scaling financing and all of the above so without farther ado let’s welcome our guest today Andrew Long welcome to the show.
Andrew Luong: Thanks Ajara excited to be here I think I mentioned it in the pre-show. But ah, you’ve had a number of my friends and unsub subscribed to the newsletter. So excited to be on.
Alejandro Cremades: Amazing. So hey so born and raised the in San Jose so give us a walk through memory lane. How was life growing up.
Andrew Luong: Um, oh man ah life was generally good only child grew up in San Jose suburban living interestingly grew up to group up with immigrant parents and actually despite the fact that I grew up I mean more or less within the. Ah, Dotcomera had next to 0 exposure despite being basically in the the heart of it all. Um, we were squarely middle class. We did okay but never sort of truly financially secure. Um, so went through the last recession. Ah, parents facing financial hardship um had a house for clothes on obviously was a pretty pretty terrible experience. Um, especially concerning the fact that I’m ah an only child and kind of the strain that that put on our our family. Our small family unit. Um, that of course later. Ah, informed my perspective on financial security ah passive income and and and the like.
Alejandro Cremades: And how do you think that they also having Iy grandparents you know I’m sure that that has shaped quite a bit your own way of seeing things because I mean your parents coming here to provide a better future for the family you know I’m sure that that has. You know, build some character you know on you and and and I guess how? so yeah.
Andrew Luong: Oh yeah, man ah well given that my parents came here was next to nothing I mean of course their immediate objective was how do I just earn a living ah when my dad first came here he was. About 20 or so from from Vietnam and kind of the first thing he he used to do was he used to deliver pizza as kind of his first job despite the fact that he was college educated back in Vietnam and and things of that nature. Um, so fast forward to to when I became a. When I was born and during my upbringing I think there was ah a major emphasis on how do you find a good job with good benefits that pay the bills and is consistent and something that you don’t have to work. Ah painful hours doing. I’d say that was probably what one of the biggest takeaways growing growing up from immigrant parents. Um, of course there’s kind of the the other side of it where I kind of learned the the grit and the fight that I think ah has helped shape me and what I am today.
Alejandro Cremades: So obviously school was not your thing right? Not your thing and and I guess you know that ended up and into startup land. Why startups why would startups be the only ones that would want to take a bit on you. So.
Andrew Luong: Yeah, yeah.
Andrew Luong: Oh yeah, um to my parents dismay and to my mine as well school was ah, school is never good to me and I was not good to school I mean I I grew up with mediocre grades at best and at at 1 point entered college and was studying chemistry trying to trying to be a doctor. Got nowhere near it. But ah the the fortunate part was ah I ended up going to school in San Francisco um effectively the the heart of where um, the the the heart of where startups are um and so kind of stumbled my way into startup land at a first side of a company called misfit. Um, misfit wearables. It was ah um, this is backing rough like 2014 or so um and ended up doing sales. There learned a lot kind of startups gave me a vehicle for me to really accelerate myself. Ah, contribute to something that was sort of greater than my day-to-day that I was clearly flowering at as well. Um, and obviously provided me with a ah little bit of an incoming tip.
Alejandro Cremades: So While while you were you know doing the rodeo in different startups. I mean you were on on different of them like misfit or genggo or even indeed or you know human Interest. So I Guess the um the roles that you were taking were mainly. Sales business Development. What did you learn about sales and business development that perhaps you know has really helped you. You know when it comes to building your own business.
Andrew Luong: Right? Um, primarily learned a lot I’d say that there’s some things I have to unlearn to in my day to day job ah running door. Best. But ah I mean honestly I’d say that the biggest one and it’s a big cliche is just ah, um, the ability to just take nose. Over and over and over again I probably say is probably 1 one of the biggest ones um similar to some of the topics I think we might cover later when you are working in sales oftentimes you’re talking to what one ah hundred ah hundred different people at any given time and possibly. 10% or so actually sign a contract and deal with you. Um, and so sometimes you go on a dry spell and you’re on your tenth Eleven Twelfth Twentieth thirtieth no um and you still have to trust in the process and continue to go on. Um, it sounds quite ah quite similar to to fundraising. Oftentimes you’re talking to thirty forty Fifty um investors until you you finally get a yes.
Alejandro Cremades: So in your case you know you were involved in startups since the beginning but it took you about 8 years to launch door. Best I mean what were what were you waiting for.
Andrew Luong: Oh man, um, dorves was very organic. So along the way I got into startups and some of the the learnings as a childhood was ah how do you build financial wealth for yourself and build a nest egg etc. And so. Um, during those 8 years where I ended up was ah ended up getting into investment real estate. Um, so single familymily rental homes um ended up buying my first rental in Sacramento in 20141 led to 2 and 2 led to a little bit over 10 um, so by day I was working sort of at these various startups nights and weekends was was buying real estate. Um and at some point the intersection of those 2 roads became doorves and it took a little bit of time and maybe had I not been so stubborn I kind of got started on it. A little bit early.
Alejandro Cremades: And I think that you you alluded to it Obviously the the hardships that you experience with the family. You know the foreclosure all of that you know were some of the things that were in you that perhaps you know, got you thinking about the passive Income Opportunities. As you were thinking about passive income you know and passive Investments. How do you land into real estate why real estate out of all things.
Andrew Luong: Yeah, um I think this came sort of intuitively to to me on one then my day job and sort of the way that I live the majority of my life was in sort of early early stage venture back startups. So not a.
Andrew Luong: Ah, sort of defined path. Um lots of upside for sure but high risk as Well. Um, and so I think by the nights and weekends I was drawn to something that was a little bit more reliable predictable something you could put in a spreadsheet and truly see what the numbers meant. Um, and so. Real real estate became that Avenue sort of the underwriting of ah of an investment home was much more quantitative and certainly much less qualitative than Startups. You’re looking at the rental income you’re looking at all the operating expenses. Maybe some ah factoring and debt costs. Like how how much the the mortgage might cost and therefore that’s your yield on the home and then maybe you have a little bit of an implied growth rate on the home’s value and the rental income over time. That’s effectively it it was quite straightforward I had a day job I paid my bills saved up some money. Then went to buy real Estate. What was kind of the the formula there.
Alejandro Cremades: And also what was the formula of a of buying the the real estate because I mean you were saving some money but my god getting all the way up to 10 homes I mean that’s ah, that’s quite a ton of properties. You know anyone? you know that would have heard that you know they will be like my god you’re like i’m.
Andrew Luong: Um, ah.
Andrew Luong: Who no.
Alejandro Cremades: Big time millionaire that I did I mean how did you do that? yeah.
Andrew Luong: Oh man, um, yeah, was that definitely was that a big time millionaire. But maybe one of these days. Um, yeah I mean ah effectively it was just um, it was similar to the principle that I ended up taking with startups too. I mean you you focus on immediately. What’s next so in 2014 I was 20 at the time. And my my claim to fame was I bought my first investment home before I could buy a drink at the bar. Um, and so but but bought the first focus on getting the first home. Um, and then that was it and then from there focused on getting the next home and then that was it and then so on and so forth and then you keep you keep focus on that goal. And you stay disciplined day in day out. Um, and then three or four years later I look backwards and I owned a little bit over 10 homes. What was kind of the the mentality there.
Alejandro Cremades: And was it like a down payment and then some financing and and and getting the tenants to pay for the mortgage or what was the strategy there you know because obviously you were an employee doing sales and and. And and also business development. It’s not like you had just done like a massive you know acquisition for hundreds of millions of dollars so so what was the strategy there to be able to to build a portfolio like that. How did you arrange that.
Andrew Luong: Yeah, yeah, yeah, exactly actually sometimes I talk to some of my friends that are very successful entrepreneurs with hundreds of millions of dollars and ah the way they get into real estate is quite different from how I I scrap together things. So. Um, one detail is in ah my first home in Sacramento in 24 was the cheapest 3 bedroom in the entire city at the time it was a 3 bedroomroom one bath for $96000 um, so obviously it’s worth ah the the home values are much higher now. Um, but at the time it was $96000 um, so.
Alejandro Cremades: Oh.
Andrew Luong: I’d come up with 20 or 25% of that call it 20 or 30 k um, and then ah get a mortgage for the remainder um, get really creative around financing. So how do we refinance this mortgage maybe get some of my cash out so I could ah plow that into the next home quickly. Um, and also got got creative with ah and learning how to raise some capital from friends and family. So I’d go around talk about what I was doing offer some interest in exchange for some of their capital and then use some of those vehicles to. Accelerate my ability to to buy subsequent ones.
Alejandro Cremades: And obviously you know people started asking. You hey how how the hell are you doing this Andrew Luong: hey you became there the yeah, the popular guy you know in the the circle of friends and family like the the mogul of the homes now and and I guess that’s the um, eventually the way that door based you know came to light. So.
Andrew Luong: By ah.
Alejandro Cremades: Walk us through that incubation process on how you were thinking about really building the company or or how the company came together and then all of a sudden in one day you know you wake up and you’re like my God This is real. It’s happening.
Andrew Luong: Yeah, it was ah similar to kind of some of your prior questions too. It was very organic and it it was step by step I wish I was a little bit more daring and jumped a couple of steps but ah it was sort of always step by step for for me. Um, it started with me buying real estate for myself. And then secondly um, from from there. It was similar to as you were saying friends and family and co-workers would say like Andrew like I have 40 or $50000 saved up I heard you do real estate. Can you show me how to do it. Um, and it was like yes of course great. Um, here’s how you. Find a market find an agent write offers get a mortgage title insurance renovate lease manage accounting and then the bookkeeping. Um, and then you got to do it a couple more times in order to really build out a portfolio because one one home isn’t gonna get you the the nest egg or the financial security you’re looking for. Um. I didn’t realize it at the time but I would give them that playbook send them off on their way and it was like I love talking about this stuff. Give me a call give me a tax we can hang out anytime and talk about this stuff. Um, four months later it was like clockwork bump into them at ah at a friend’s house or an event or something and I was like how did you do. Um, and every single person over the course of three or four years was like couldn’t get started still want to do it. Can you do this for me and so at some point that that became the the genesis of door best that there was more to it than simply content like there had to be sort of a platform approach.
Andrew Luong: Um, to to giving people access to an asset cost that they want access to and so from there I think the the conventional silicon valley wisdom is go find your technical co-founder to to do it with you fortunately. There was a good friend of mine still is a good friend. Ah Justin he’s also our our cto and co-founder. We’ve been friends for years. We hacked on like back when I was buying the real estate he would scrape websites to help me pull data and then back when there there was a time where. I got into buying a bunch of cars to rent it out on platforms too. He helped me um, pull together data etc. Um, approached him and fortunately and to my surprise you he was very ah, very open and down to to embarking on this journey with with me.
Alejandro Cremades: So what ended up being the moment where you guys realize Product Market fit is there.
Andrew Luong: Um, yeah, um, so our first 2 customers were folks from that extended network. Um that I that over the years had asked me for. Help on how to get started in real estate and so I think that the first lesson there is ah I mean this is cliche at this point but solve something that’s near and dear to to you and that was clearly that um they also bought 2 of my homes and fortunately they’ve done. Very well over the last several years with it. Um, from there we went out ah thought tooth and nail to to raise our first three hundred k close that 300 k um, early march of 2020 I think it was like a week and a half before covid hit. I thought we were dead by the way once covid had. But fortunately it was not not the case. Um, but we we really focus on driving customer demand and folks that did not have a established trust in my personal brand and so we we took ah a very methodical. Sort of funnel approach. We started top of the funnel. How do we get lots of people to land on our website so we started testing with experimenting with performance marketing Facebook Google etc. And then once we got a good concentration of that then we took the next step down the funnel.
Andrew Luong: Which was um now that we have a lot of people looking on our website. They’re not bouncing etc. Um, how do we get them to book a call with us and and talk to us. Um, and this is where I think my my sales background came in handy is ah I was very comfortable with just hopping on the line and and speaking with people but ah from there. Um, we we optimize for people to book a call with us. Oh man, but there was 1 time we did ah a big ah landing page redesign and I think I did 40 calls that week and it was crazy. But anyways, um, that what once we unlocked calls and we felt like that worked. Um, then it was the next step which is like put down a deposit with us so that we could start looking for an investment home for you. Um, of course this is the critical piece because this is when they’re whipping out a credit card and actually giving us some money. Um, and so we launched that piece and. For weeks on end I was pitching it to customers. It’s like end to end real estate platform here’s how you ah, here’s the homes that we look for here’s example homes if you’re interested. Let let’s get you on the platform by putting down a deposit and it was week one went by. There’s people that seem like they’re interested. No deposits week two went by. There’s people that sounded like they were interested no deposit and it got all the way up to week 5 and at one point I looked over at Justin I was like oh shoot. Maybe we don’t have anything here. Um, we’re talking to a lot of people.
Andrew Luong: Um, and we’re trying and clearly no one’s ah paying for this? Um, but fortunately somewhere in week five the first one rolled in and I remember Justin and I went and we we bought a bottle of champagne and popped it and actually we hadn’t even built. Deposit flow yet first at that time we were still experimenting to see if there was demand for it. But anyways, the first one came in and then they all started rolling in after that and I think that was the moment where we realized that that we really have something here.
Alejandro Cremades: Now for the people that are listening to get it. What ended up being the business model of door based how do you guys make money right.
Andrew Luong: Yeah, um, so effectively we’re we’re building ah Amazon for for real estate investment real estate. Um, how do we start with the consumer and their investment preferences source and match homes based on their criteria and then make it easy for them to transact entirely online. Um, and so um, when we help a customer buy a home um will will charge a cut of that transaction it hovers around 6 to 8% as of right now. Um, and then once a close and take full title of the home. We’ll manage it on the backend and and will generate about 10% ah, in management fees ongoing um 70% of our customers are our first time homeowners and then about 20% have purchased a subsequent home so business model wise we focused on capturing people before they’re ready to buy their first home but interested in real estate and then stay close to them and partner with them along their journey. As they build out their their portfolio overtime.
Alejandro Cremades: So ultimately for this how much capital have you guys raised to date.
Andrew Luong: Um, yeah, um to date we’ve raised just shy of 23000000 in equity and and about 75000000 in debt to to fund the acquisition and renovation of the real estate.
Alejandro Cremades: So how does it work the equity versus Deb Tonna play like door. Best.
Andrew Luong: Um, yeah, So the equity is the platform. The Engineers the R and D Um, effectively. It’s everything that makes it such that a consumer could buy a home totally sight unseen within a matter of clicks. Um, is kind of where I I see the the equity going into effectively the marketplace platform and then the debt is ah is the pure real estate side of the business. Um, so for us to deliver on that seamless experience. Um, we buy the home on Customer Behalf We do renovations if needed. We’ll place a resident before we start managing So What we’ll fully stabilize the home for the consumer um in order to have the capital to especially buy and renovate the the real estate. Um we we we raise the the debt to to support that piece.
Alejandro Cremades: So tell us about how you play the fundraising game. What have you learned around process and then also how it works.
Andrew Luong: Ah learned a lot and probably still would not consider myself an expert. But ah I guess what 1 thing that ah I had to unlearn or at least shift my perspective on is um when we did our first round being the the total. Novice that that I was and given that I came from a sales background. It was like cold emails. So how do we build a big list of ah, a lot of investors that are within our target write emails to all of them. Ah and then build a funnel out of that write emails to all of them. Then we’ll book some calls and then hopefully call first calls lead to second calls lead to term sheets lead to us getting a round done. Um, literal did I know that’s kind of not how early stage fundraising works. It’s certainly you do build your list and you you want a pipeline etc. Ah, but it’s really about um, finding founders in adjacent spaces and working with them to ah, request introductions to investors that have backed them or that they’re close to and that’s kind of been what one of the early learnings. Um, for for folks out there that have never raised cash before that was a big one for me. Um in terms of I mean there’s mechanics that I’m sure you know better than I but ah running a process is quite important. Fundraises are one of those things where either you get a quick no or you get a really slow. No.
Andrew Luong: Um, and generally you you probably want to strike the balance between ah quick, no and a really slow. No in the way that you do that is ah you drive some momentum in the process. Um, because Momentum accelerates timelines and gets everyone on the same page etc.
Alejandro Cremades: Now we cast through a practical case on how it would work with with one of those founders not because I’m sure that there’s gonna be I mean I agree with you. That’s an incredible way of doing it but almost no one really does it or knows about it. So can you just walk up about you know.
Andrew Luong: Oh.
Alejandro Cremades: From a practical perspective how it would look like.
Andrew Luong: Yeah, um, if we were to go back and raise our first round again what I would do is ah I would spend time with ah founders in founders of later stage companies within adjacent spaces. So if you think we’re fintech.
Andrew Luong: Folks that are this is our first round call at seed brown. Um, and if you think we’re in fintech maybe folks at our Abc rounds. Um, maybe a b is a little bit more relevant, but let’s just say b c rounds infant tech that you look up to um, maybe it’s prop tech. Maybe it’s some some other. Vertical um that that you think is related but not competitive with yourself. Um, and to spend time with these founders. Um, and the way that ah we ended up doing it and I still love doing this to date is ah, follow, follow their companies learn more about them. Ah and reach out to them and. Ask them to talk and just do an intro. Um I I think you’d be surprised at how many founders are open to doing this I think they’ve they’ve ah made progress. They’ve seen the pain of it and so they’re typically relatively willing to to spend time with you. Um, do an intro tell them more about learn learn more about their business. Hear about their story and then share a little bit more about yourself your background what you’re building, etc. Um and and look for an angle like um maybe tell them that you’re thinking about fundraising. How would they approach it and then do do do 10 or 20 of these um and I’d say what happens as a result of these conversations is ah you either gain advice. They tell you soup to nuts what they’ve done or some diluted version of that I’ve always found that so helpful is the the firsthand experience and hopefully it’s ah recent and relevant enough. Secondly.
Andrew Luong: Um, they might offer to they they might give you the advice and they might offer to invest in your round. Great. You’ve secured yourself a small check Um, or thirdly they’ll give you some advice invest in your round and also offer to introduce you to some of their investors and I’d say. Their introductions to investors that believe in them are probably your highest signal introductions.
Alejandro Cremades: So this is amazing. Thank you so much for sharing Anda I’m sure that it’s gonna make a really big difference to the people that are listening that right now are either thinking about racing or that are in the middle of it. So let’s say you were to go to sleep tonight Andrew and you have this snoosh of a lifetime you wake up in a world where the.
Andrew Luong: Has ah.
Alejandro Cremades: Vision of door based is fully realized what does that world look like.
Andrew Luong: So contrary to popular belief I do go to sleep every night. So hopefully I wake up to tomorrow and what what we’re about to describe happens. Ah what I’d say is there’s some mix between Amazon and a bank and so. Um, one end Amazon and I think we I certainly do. But I think we all take for granted nowadays. It’s just how easy and how quickly you could think of toilet paper 3 or 4 clicks on your app and then it shows up in a couple hours if you want if you really want that that to happen. Um. That’s my hope for real estate. Um can you hop on doorve potentially a mobile app one day comb through what home you’re looking for. Are we looking for a cash flow home. Are we looking for a really nice home in a great neighborhood in satup. Um and within a matter of clicks you could buy. That that home as your first home. Um, and then from there I think that’s where the the banking analogy comes in so homes are a major investment oftentimes the the largest source of american net worth um and in our. In our model hopefully folks own more homes and not ah more than the average number of homes than the average american and so um, can we stay close to you as a relationship manager at a bank to really understand your needs over time and so over time.
Andrew Luong: Um, you’ve bought this home then you’ve bought a couple more homes from doorves. It’s increased in value. Um, and you’re looking to buy a primary residence Maybe can we help you with that. You’re looking to refinance. Can we help you with that. You’re looking for deposit and banking services. Can we help with that. And we know your home. Well and we know your residents well can we give you insurance or lend you more money for you to but expand your portfolio etc. Um I’d say some combination between that those 2 is the end state of door bus.
Alejandro Cremades: Well that sounds like a beautiful future to wake up into and so so good stuff Andrew Now let’s talk about the past but doing it with a length of reflection. You know, let’s say you know you were to um, get it to a time machine and you wake up, you know right? there where you are having a chat with.
Andrew Luong: I.
Alejandro Cremades: Your younger self you see your younger self before even you know dorbiz was born and you are able to give that younger self one piece of advice for launching a business but would you tell that younger self and why.
Andrew Luong: Um, I’ll tell him more lots to tell him but I I’ll tell him 2 things at this point one and this is what everyone told me ah and I I never could have taken it to heart until I experienced it myself. But ah, it is so much harder. Ah, like the the lows are so much lower. But of course the highs are much higher as well. Um, than one could wildly realize and so I’d take that piece to heart and so I think what’s important there is ah and this is kind of my my message to the audience is ah. Really work on things that you you care deeply about because inevitably in the course of building a big business. You’re going to hit so many lows um and the only way for you to get back up the next day is to work on something that that you care about and the only way that you build a big business is by getting up the the next day. Um, so I’d say that that is kind of the the first piece. Um and the number 2 is a just go do it is is the second piece. Um I think to some of your questions before I think it took me a little bit longer than than I I probably should have in hindsight I think we should have just.
Andrew Luong: Jumped in dived in and then figured it out as we did later. Um I think I was a little bit too calculated a little bit too methodical wanted to save up some money and prove some demand, etc, etc. But there’s nothing like being doing it day in day out. Ah, with a cofounder or several cofounderst etc. Um, so I would say find something that you care about and be sure that you care about it and number 2 is then just do it. You can always go back and get a another job.
Alejandro Cremades: I love it so Andrew for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.
Andrew Luong: Yeah, dorva.com is great and then feel free to shoot me an email as well. Andrew at dorvis ah com if you’re curious about real estate or startups etc I don’t think I have all of the answers. In fact, probably just have a a small portion but ah I’ll try to try to.
Alejandro Cremades: Amazing. Well hey Andrew thank you so much for being with the deal maker show today. It has been an honor to have you with us. Okay.
Andrew Luong: Answer as fast as I can.
Andrew Luong: Um, thanks for having me This is so much fun.
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