Transitioning from CRE/REPE to a VC
Title says it all. Can you Transition from a REPE or Brokerage shop to VC down the line? After a considerable amount of time is it possible or is there just not enough of a crossover/ connection.
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Can definitely transition to proptech vc, check out backgrounds of people at say fifthwall for example
Seems like everyone at fifth wall has a tech background - any examples of someone who came from a real estate investing background?
Look harder because scanning their employees about 1/3 have a real estate background
This is a very unlikely transition. The only core area where the skills and network are directly transferable would be in proptech and there aren’t many dedicated proptech funds. People take atypical routes into VC and anything’s possible - but this is not a natural move.
There is a lot of overlap in the money world (i.e. the "investors"/LPs/etc. that fund the deals/funds) between real estate investment allocation and VC/PE allocation; often under the headline of "alternative assets". If you think of this world, and the general "alts" you can probably transition or position yourself along those lines. TBH, not sure what that would look like as a career path, but doesn't seem impossible to me (but can't say I see it much, expect for the "proptech" world).
Worth noting many big real estate players have opened up VC funds (focused on proptech, but not exclusively) so maybe there is angle there. Firms I've seen do this include Brookfield, Silverstein, RXR, Tishman Speyer, JLL (not sure this is still active), and even CBRE wants to do this via a SPAC. So, more convergence seems likely each year.
curious if you think that these spacs will be successful. i have seen a few, there is a tishman speyer SPAC, equity residential SPAC, CBRE SPAC, barry sternlicht SPAC, fifth wall SPAC, there might be some others. i think i would bet on the tishman speyer SPAC I like how they already seem to have had a focus on innovation/proptech before forming the SPAC versus I'm not sure if CBRE/starwood/equity residential already did to the same degree, also the tishman speyer spac has an index ventures partner on its team and a bit more interesting of a management team. the fifth wall SPAC hasn't gone public yet but I could see there being a lot of hype there/the stock price being too high before they even have a target. as a side note i was reading through the tishman speyer SPAC prospectus and the tishman CIO is on the customer advisory board for Juniper Square I wonder if Juniper Square could be a target
yeah, they have been pretty successful in raising money, and many have gone full circle with a merger with a frim effectively taking them public. These are just "loophole" IPOs, a way easier/cheaper way of going public. The work so long as investors feel good putting money into blind pools. I'm sure some will do really really well post merger-IPO and quite a few will just lose value money and some go to zero. That's same game as IPOs.
Right now the money is good for SPACs, that will get harder when some blow up or investors lose money. Stock market is hyper valued. In all honesty, SPACs remind me a lot of the late 90's tech boom (I was in high school, and my parents threw a few thousand in a Ameritrade account I got to manage). Feel like a lot will not end well in this space, and thus make it harder for future people to raise money. At least they don't represent systemic risk as far as I can tell (like CDOs, the craze of the pre-08 period).
Still, I've been on consulting frontline for a few REITs and one BDC (super hard making those work, they were non-trade IPOs), this SPAC method of raising money has to make so many people jealous its so easy by comparison. Whatever lawyer/i-banker combo came up with it is a fucking genius (and probably very very rich).
As some others mentioned, aside from proptech, there's just not enough overlap. And from what I've seen, proptech is just not the same as regular VC. Most of the things I've seen on the proptech side are B2B where your customers are landlords. And a lot of big owners/landlords end up dabbling in proptech VC to get a leg up on potentially interesting new technology for their portfolios, kind of like R&D. Typical VC model looks for grand slams, which you're more likely to find on the consumer side (way bigger TAM) or SaaS B2B models with a bigger market than just building owners. Fifth Wall is one of the most interesting pure-play proptech firms (or close to it) that I've seen and a lot of their investors are building owners that are interested in the underlying products, not your typical LPs allocating to them for typical VC exposure. It just seems like a really silo-ed part of the VC world.
The other thing with VC is there isn't much structure outside of some of the big funds (which you won't get into.) Analysts/associates don't add that much value in VC since there doesn't seem to be all that much modeling and analysis, especially early stage funds. VC is a networking game and is about picking the right founders and adding value through your own experience working at or with start-ups. One path would be to do some angel investing on your own and try to parlay that into a VC role if you get good enough and develop solid "deal flow." Another path would be to go work at a start-up (or better yet, start one.) VC is a niche where you kind of have to do the job before someone will give you a job. Value-adders only.
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