Hometap: Jeff Glass’s Big Idea That Might Change The World
An Interview With Fotis Georgiadis
You can learn from everyone. We are all limited by our life experiences. and of course also informed by them. Since we all have had different life experiences, we all have much to teach and much to learn. For me this is probably even more notable when I speak with younger people at Hometap. While they may not yet have as much experience in running a business, they help keep our company (and me) contemporary. I never want to be one of those “veteran” guys preaching about how things need to work. The pace of technology and societal change is too rapid.
As a part of my series about “Big Ideas That Might Change The World In The Next Few Years” I had the pleasure of interviewing Jeff Glass the president, CEO and co-founder of Hometap, which has introduced an entirely new paradigm that allows homeowners to access the equity they’ve built in their homes to do more in life.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit. Can you please tell us a story about what brought you to this specific career path?
My entrepreneurial career began at age 17, when I started going door-to-door selling office furniture to make money for college. I began by canvassing the Empire State Building, top to bottom, and I’ve really been an entrepreneur ever since. Over the years, I’ve had the opportunity to run and create multiple companies. The satisfaction that comes from seeing how hard work can create something new and important continues to motivate me.
Can you please share with us the most interesting story that happened to you since you began your career?
Throughout my career, entrepreneurship has been a source of happiness and stability for me — it has helped me build an interesting life, meet amazing people, and learn new industries. It’s part of who I am. However, a while back, after starting a few companies, I thought I’d take a break from entrepreneurship and shift gears. I joined Bain Capital Ventures, a firm that had invested in my prior company.
As luck would have it, one of my partners came back from a trip from California, mentioning that he had met the founder of BUILD, a non-profit organization that focuses on helping kids in high schools with a high dropout rate. The program uses the practice of building a business to teach life skills such as collaboration, communication, leadership, and grit. I ended up meeting the founder myself, and thought that it was an amazing organization that resonated with my life experience, since I saw the challenges faced by the kids that didn’t manage to stay in school firsthand.
The next thing I know, we decided to bring BUILD to Boston, and I was back as an entrepreneur, helping to build the team, raise the money, recruit the schools, and build a network of support in Boston. I guess if you’re an entrepreneur, it’s hard to kick the habit!
Which principles or philosophies have guided your life? Your career?
Ultimately, it all comes down to the golden rule: to treat others as you want to be treated. This is a philosophy that also aligns with our Hometap value of being good neighbors to one another.
Another principle that I’m guided by is the recognition that in a company, there’s always some level of hierarchy which is necessary for decision making and organization. While title and seniority may come along with certain decision-making rights and a higher level of responsibility, that shouldn’t be misconstrued to mean that one person is any more important than another from a personal level. As human beings, we are all equal.
Finally, I try to view everything as a long-term journey, not a one-time moment. Going back to my last point, this helps frame how you treat everyone who crosses your path: investors, customers, or employees. While many people focus on one-time moments as transactions, I think it’s more valuable to build and maintain long-term relationships. Like any long-term relationship, there are gives and takes over time.
Ok thank you for that. Let’s now move to the main focus of our interview. Can you tell us about your “Big Idea That Might Change The World”?
Until recently, homeowners only had two choices to tap into the equity in their homes: sell it or take out a loan. But with Hometap, we’ve introduced an alternative option designed for those who don’t want to — or can’t — sell or borrow. Our home equity investments let homeowners quickly tap into their equity in exchange for a share of their home’s future value without the stress and burden of debt, since there are no monthly payments and no interest.
The cash can be used for almost anything: paying off credit card debt, starting a business, buying a second home, funding a child’s education, and more. When the homeowner settles the investment at or before the 10-year effective period through a refinance, buyout with savings, or sale of their home, Hometap is paid out a previously agreed-upon percentage of the sale price or current appraised value.
It’s an innovative new option for consumer capital, and helps homeowners access what is likely their largest financial asset — that, until now, has been locked up. With Hometap, they no longer have to choose between having a house and having a life.
How do you think this will change the world?
People’s homes are generally their largest financial asset, but the only way they could previously tap into its value is by selling their home or taking out a loan. Often, these options aren’t possible or desirable. Enabling homeowners to get more from homeownership — and from life — is why we created Hometap. We’re on a mission to make homeownership less stressful and more accessible. With Hometap, one’s largest illiquid asset can now be partially liquid. This fractionalization of homeownership creates enormous opportunities for homeowners to seize life opportunities, as well as better manage some of the unexpected challenges that come up along the way. Today, there are trillions of dollars of built-up equity locked up on the balance sheet of American homeowners. Freeing up some of that capital for more optimal uses, or even better asset allocation, will have a very meaningful impact for millions of homeowners.
Keeping “Black Mirror” and the “Law of Unintended Consequences” in mind, can you see any potential drawbacks about this idea that people should think more deeply about?
Everyone’s motives and methods around homeownership are personal — ultimately, it’s up to each homeowner to weigh their options and make the decision that best fits their needs. We typically look for an LTV (loan to value ratio) maximum of 75%, so if a homeowner has less than 25% equity built up in their property, Hometap might not be the best fit. Or, if a homeowner can access the amount of money they need through a low-interest loan and can comfortably afford the monthly payments that come with more traditional options, they may decide a loan is a better choice for a variety of reasons. It’s also important to determine if our settlement options fit into a homeowner’s plan. Hometap Investments have a 10-year effective period. Homeowners may settle their investment within that time through a refinance, buyout with savings, or sale of their home.
Was there a “tipping point” that led you to this idea? Can you tell us that story?
As a kid, growing up in an apartment in Brooklyn, (where I “joyfully” shared a bedroom with my younger sister), I remember at times being envious of my friends who lived in houses with more space and a backyard etc. I can also remember conversations between my parents, where they commented on how many of their friends who had stretched their budgets to afford a home were in a constant state of financial stress. While having a home was certainly nice, ownership hurt their cash flow and added pressure to their lives, almost in perpetuity. On the flip side, other than rooming with my sister, my life was pretty good, even though my parents weren’t financially well off.
That “house-rich, cash-poor” realization stuck with me for a long time. Fast forward several decades to when one of our co-founders, Max Campion, approached me with an insight that many young up-and-coming Americans with stable incomes were suffering from the same challenges that my family witnessed years ago. And then by pure coincidence, a couple of weeks later, another friend told me the story about how he and his wife sold their home to help free up cash to take care of a relative. These two personal stories got us thinking about the idea that ultimately became Hometap.
As a longtime serial entrepreneur, I was often looking for investors for one of my companies. Investors give money to guys like me in exchange for a little bit of ownership. These investors have the expectation of making a return on their investment yet they also know that it’s possible to lose their money.
Meanwhile, homeowners — who actually have a physical, tangible asset — need to borrow money for things they want to do in life. And that brings more debt burden, worry, and stress, so the American Dream can sometimes become more like an American Nightmare.
It didn’t make sense to us: why can’t someone treat homeowners like the CEOs of their own families, and invest in that home’s future value? That got us thinking that maybe we and some other smart, caring people (many of whom are homeowners themselves) should start a company to do just that. So we did.
What do you need to lead this idea to widespread adoption?
Given the fact that Hometap — and the home equity investment industry in general — is fairly new, our first challenge is creating awareness among homeowners that we exist as an alternative solution to traditional financing options. Then, once they know about us, there’s a significant amount of education and explanation that needs to take place to accurately convey what our product is and how it works. Our business model, while simple, is unique, and can be hard to wrap one’s head around because homeowners are often used to dealing with the bureaucracy and hassle of big banks, traditional lenders and interest rate and payment calculations.
What are your “5 Things I Wish Someone Told Me Before I Started” and why.
- Pace yourself. I started my first company in college, and my first VC-backed company in 1999. It’s important to balance urgency with longevity!
- Make note of the wins along the way. In a growth company, one is always expecting to do more next year than what one accomplished this year. Growth keeps things fresh and interesting. It creates opportunities for people to develop and grow. Yet, the focus on growth can often lead to the focus on tomorrow at the expense of recognizing the wins today. I’m still not great at this, but the benefit of time has made me appreciate how important this is.
- At the end of the day, it’s always about the people. When I look back at my adventures over the years, most of the stories have faded, but what remains are the friendships and relationships that became stronger. Even day to day, what makes work come to life is the interaction with others. Focusing on people creates meaning for me.
- Be mission-focused. When I first started out, I didn’t realize how much more motivational it would be for me to drive a mission versus just trying to create a good business. At Hometap, we have a mission of making homeownership less stressful and more accessible. When I remind myself of that each morning, it’s much easier to jump out of bed and get working.
- You can learn from everyone. We are all limited by our life experiences. and of course also informed by them. Since we all have had different life experiences, we all have much to teach and much to learn. For me this is probably even more notable when I speak with younger people at Hometap. While they may not yet have as much experience in running a business, they help keep our company (and me) contemporary. I never want to be one of those “veteran” guys preaching about how things need to work. The pace of technology and societal change is too rapid.
Can you share with our readers what you think are the most important “success habits” or “success mindsets”?
- Being an entrepreneur requires some level of blissful ignorance — or at least a willingness to suspend disbelief. For example, almost every new idea has some “chicken and egg,” dilemma where you can’t accomplish X without Y, but you also can’t accomplish Y without X. At Hometap, we couldn’t initially help homeowners until we had investable capital, yet most asset investors wanted to see traction with homeowner demand for our product before they would be willing to invest. It’s a logic problem that analytically can’t really be solved, yet savvy entrepreneurs find a way.
- It is critically important to think about alignment of goals when building a company. And of course, in order to align your goals with others’, you need to be able to articulate those goals. At Hometap, we aspire to build a long-term, durable company. While we of course have short-term goals, we are always thinking about what the next three to five years should look like, and what we’re building today is designed to support what we would like to achieve tomorrow. It is important to bring in capital partners and fellow teammates who are aligned in that view. You’d hate to have investors or executives with a short-term mentality if you are thinking longer term. Of course, the opposite could be true as well. Core alignment around aspirations is very important.
- Prioritize defining one’s role, and then work hard to stick to it. I view my primary role as ensuring we are capitalized for success and have an overall strategy that both makes sense and is understood throughout the company. I also view my role as key to attracting and retaining talent that can lead our business, and cultivating a company culture that serves as a competitive advantage. If I’m not working on one of those things at any given time, then I need to ask myself why.
- Keep in mind that your job as CEO is to serve the company — not the other way around. You are there to try to facilitate the value proposition for everyone involved; most notably your customers, investors, and coworkers.
Some very well-known VCs read this column. If you had 60 seconds to make a pitch to a VC, what would you say? He or she might just see this if we tag them :-)
There are tens of millions of American families who are house-rich and cash-poor. Historically, the only way to free up equity one has built in their home was to either sell the home or take on more debt. Hometap creates a non-debt alternative where we provide cash to the homeowner in exchange for a percentage of the future value of the home. We’ve been operating for several years, and have grown every quarter since launch. Homeowners love our product, investors appreciate the ability to own the assets, and our company has won numerous awards for culture and morale. We are building a durable, mission-driven business supported by technology, data science, and a passion for helping homeowners. Come join us.
How can our readers follow you on social media?
https://www.linkedin.com/company/hometap-equity-partners/
https://www.facebook.com/HometapEquity/
https://www.instagram.com/hometap_/
https://www.youtube.com/channel/UCOS30gqJ9HVS3cCbH_M4LxA
Thank you so much for joining us. This was very inspirational.
