Last week, RentStuff.com raised $660k in seed funding (read here). Today, Christopher Jaeger*, CEO and co-founder of the Nashville-based start up which operates a community marketplace for rental goods, answered our questions about the service, the team and future plans.
FinSMEs: Hello, Chris, thank you for joining us. First, can you tell us a bit more about RentStuff.com? How did you come up with the idea of creating it?
Christopher: You’re welcome. It’s a pleasure to talk with you. RentStuff.com is a community marketplace for product rentals. Our platform gives both individuals and businesses the ability to post all sorts of items for rent. We’re blending technology and social tools to better connect communities to increase the sharing of assets, decrease the over consumption of goods and make it easier to find what you need only when you need it.
The idea came from the personal frustration of trying to find a mountain bike rental for a weekend excursion when I lived in New York City in 2008. The process of finding, reserving and retrieving a rental from a local store was cumbersome and time consuming, since the rental business is largely an offline industry. The bike I needed was in my own building, but I had no easy way to connect to the owner to see if I could rent it from him. I knew there had to be a better way to connect people who need stuff with people who have stuff – so I decided to create RentStuff.com.
FinSMEs: What is it? How does it work?
Christopher: We aggregate rental items from professional rental shops so that customers can compare prices and make reservations directly on our site. We also allow individuals to list items they have (bikes, camping equipment, etc) so that other people can rent those items from them. People who visit the RentStuff.com platform can use Facebook, Google or a native login to quickly create a free profile. Users can then visit the “Post Item” page to easily start posting items that others can rent. Our site is a great way for people to earn extra money renting out items they already own, or to save money by renting instead of buying. We are working on new tools to better meet the demands of professional businesses with large inventories and more complex needs.
FinSMEs: What’s your business model?
Christopher: We are an online marketplace that connects renters to lenders. It’s completely free to post items, build a profile, search for items, and list things you want to rent. When you complete an actual rental, RentStuff.com charges a small percentage service fee of the total rental amount.
FinSMEs: Could you tell us a bit more about the features that differentiate your service from competitors?
Christopher: RentStuff is different because it looks to connect both businesses and individuals on one marketplace. We’re creating the best solution for rentals shops to come online and better connect with their local communities as well as giving individuals the ability to rent out their own items to people nearby. Additionally, RentStuff.com provides the tools to increase trust and security for our members. We encourage our members to fill out profiles so you can see whom you’re transacting with. We encourage communication via our messaging system so you can interact directly with potential renters. RentStuff.com offers credit card based security deposits during the term of the rental to cover theft or damage. We also use merchant level payment processing to securely handle all monetary transactions through our site so users don’t have to deal with cash.
FinSMEs: Could you introduce us to the other team members?
Christopher: Sure. The RentStuff.com team currently consists of four members – although we are actively recruiting for additional developers to join our team. The other founders include Robert Jaeger, who serves as our COO and product manager, and Adam Albright, our CTO and lead developer. Our fourth team member is Laura Boring, who is our community manager and head of marketing.
FinSMEs: Why did you start thinking about raising funding?
Christopher: We started thinking about fundraising after completing a Techstars affiliated accelerator program called the Jumpstart Foundry in Nashville, TN. During the program, we spent fourteen weeks dissecting the business model, testing assumptions and creating our first product. The accelerator culminated in an investor demo day where we received very positive feedback. We started capital raising soon thereafter in order to have the working capital to build our platform from the MVP stage in the Nashville marketplace to a wider beta offering and beyond.
FinSMEs: Today, many tech companies try to raise VC and I know that this is becoming always more difficult. What did you do to reach this target? Was it easy?
Christopher: We were fortunate to have increased exposure and considerable momentum after graduating from the Jumpstart Foundry accelerator in Nashville, TN. The accelerator program has many benefits, but specifically for the investor community, it serves as an initial validation that the team has the ability to execute. Early stage investing is as much about finding teams that can execute as it is about the actual idea or product they’re building. Still, it was not easy. While Jumpstart helped provided more opportunities to meet with a number of angel investors and VC firms, we still had to convince them of our vision, business model and ability to execute.
FinSMEs: Who are the investors? What about your relationship with them? Are they difficult?
Christopher: Our investors consist of two early stage investment firms, an angel investor group and a small cohort of individual angel investors. We have a strong relationship with our investors. Our lead investor is Solidus Company based in Nashville, TN. Solidus is responsible for putting together the Jumpstart Foundry accelerator program, so our relationship started there. I work closely with Solidus to build the best possible support structure for our company, which includes directors and advisors that can help us better execute our business model. All of our investors are very helpful, responsive and supportive.
FinSMEs: How are you using the capital?
Christopher: Our seed capital round will be used to hire additional developers to accelerate product development. Additionally, our capital will be used for marketing and community engagement efforts to increase our membership base and grow in additional markets.
FinSMEs: Do you plan to raise an additional funding round?
Christopher: I anticipate raising another round of funding once we roll out additional products and features to our platform and look to expand to even more locations. We want to bring the RentStuff.com platform to every community in the country and eventually around the world.
*Christopher is currently responsible for the overall strategy and finances at RentStuff. Previously, he worked in investment banking and structured equity finance at Bank of America Merrill Lynch in New York City. Chris is a graduate of Princeton University with a degree in Economics.