Vertex US Spotlight: A Q&A with Reichen Kuhl, President and Co-Founder of LeaseLock

I’m excited to chat with Reichen today from LeaseLock which recently raised a Series B!

Give us your elevator pitch — what does your company do?

LeaseLock is the world’s leading insurtech platform for real estate.

We created a new type of insurance that leverages AI to eliminate the use of security deposits from enterprise operating infrastructure. Our flagship product, Lease Insurance, is deployed via customers’ native property management systems, making rental transactions faster, simpler, and more affordable while instantly generating unprecedented coverage for unpaid rent and damage for every property on every lease.

What sparked your idea to start the company?

I moved to NYC in 2010 and was declined to lease an apartment because I did not earn the community’s requisite 80x the monthly rent, annually.

Yes, they required I earn $320K/year to live in a $4K/month unit. I had to find a co-signer. I eventually secured the apartment, but with a chip on my shoulder.

I began researching the then-existing risk instruments used to protect multifamily leasing operators from bad debt from unpaid rent and physical damage. Cosigners, guarantors, surety bonds, and deposits — I found that multifamily and renters alike pretty much hated all of them, especially security deposits, which were the #1 blocker to closing leases in a timely manner. I could see that there was really good risk out there (good-paying renters) that were being overly burdened by draconian blanket policies applied to all renters.

To test my hypothesis that all that was needed was a deeper look into each renter’s situation, I created a website and called it “LeaseLock” and began offering the service of cosigning on strangers’ leases…for a fee. They could use my good credit and my co-signature if they paid me for it.

My first year, I cosigned on 12 leases totaling $400K, collecting 10% of the full lease values, or $40K, upfront from the renters. Scarily, I didn’t have $400K. Even more scary, my underwriting system was in my heart and soul and how I felt about the applicants’ financial situations. But my hunches turned out to be more accurate than I had originally thought.

I made sure my customers had secure jobs and some savings. That told me alot about the many workers from foreign nations and recent grads who had no credit or no U.S.-based credit established who I chose to use my service. After a year, not one of my picks defaulted. So I did it again and doubled my number of customers. Once again, no one defaulted on their lease. “Holy sh*t,” I thought, “there is good risk and real business here.” I took the idea to a then-newer accelerator lab in Santa Monica, CA, Mucker Capital. They were the first to really believe in me and the idea that the good risk I proved existed could be served by a large-scale company, backed by insurance. The guys at Mucker introduced me to Derek Merrill who had been working on his own insurtech solutions. We met and I knew quickly that he would be my cofounder. He knew everything about what I did not at the time: product, engineering, raising money; and I knew everything I needed to know from law school and my own past entrepreneurial ventures about insurance, compliance, corporate governance, and putting ourselves out there to make this happen. Today, we are sitting on a company that is fundamentally changing the way residential lease transactions are completed across the nation’s top multifamily operators.

If you were to draw a line from your current passion for this field back in time to a specific point in your youth, where would it go? Tell us about that memory.

Easy. I do not come from money. In fact, I come from very little of it, growing up over most of my childhood years in a trailer park. I saw things and situations in that trailer park that made me want to escape it and never be associated with the kinds of abuses people there laid upon themselves, their families, and others. I hid from everyone I could that I was from there, and would rather walk five miles home from school some days than be made fun of on the bus when I was dropped off at the park’s entrance. When I left that situation after earning admission to the U.S. Air Force Academy at 18, I swore to myself that I would work hard enough and that I would be successful enough, to always live in a nice home, and in a safe neighborhood, and around people who respect themselves and others. That was most important to me.

So I think when I was denied that apartment in NYC, I felt “the man” trying to hold me back from a nice home that I knew I was responsible enough to afford. That bothered me — more than most people. I guess I sought my revenge on the system…and took it all the way.

When you were a kid, what did you think you’d grow up to be?

A dentist. Then I took a volunteer job in my late 20s assisting at a dental office. The second patient who came in on my first day had really bloody gums. I watched a hygienist work on those gums as they bled out on the patient’s teeth until I started to feel weak, and almost fell off my chair from being so absolutely grossed out and nauseated by it all. That volunteer job lasted one week.

That’s when I decided to become a lawyer.

Where did you start your career? What was your first job in this industry?

I have tried many “careers” in my life from being a flight instructor to acting on soap operas to creating jewelry and cologne lines. I have even published a book. But I started my career in multifamily and insurtech on the day I started LeaseLock. I had gained some good experience in insurance principles by practicing law, settling personal injury suits in transportation accidents, but I didn’t have much experience with the tech side of insurance.

I think it took two guys like me and Derek (cofounder) who did not have much multifamily experience to look into the industry and its common ways to suggest something totally new and to figure out a way to get everyone thinking differently about security deposits. I.e.: that deposits were a waste of everyone’s time and money, and that they weren’t even needed at all.

What unlikely/unexpected person or chance meeting affected your career path?

I gathered up enough cash to attend the National Apartment Association Convention 2014 in Denver, Colorado. I didn’t know anyone but I had heard that the biggest names in multifamily would be there, and I had envisioned LeaseLock being deployed someday at properties managed by those very people. The owner of a screening company with whom I had been discussing LeaseLock applications, named Gary Glucroft, said that I could attend the NAA convention and utilize his table to talk to people about LeaseLock. That was my first break.

At the convention, I pretty much “stalked” the Greystar Management attendees in their huge and beautiful booth area of the hall. Not shy, I began telling a Greystar employee about the LeaseLock idea to replace the use of security deposits. She told me to look for a guy named Mark Stringer who was, in part, heading up Ancillary Services for the org. Fate put me and Mark passing each other on up and down escalators later that day. I saw his name tag. I ran back up the escalator and stopped him. He must have thought I was a lunatic, but I told him about my idea as he walked. He said to me, “You know what? You’re smart. I was going to start this exact company about 5 years ago but I got busy. We should talk more. The industry actually really needs this.” He said I could join him and a few others at breakfast the next morning.

That was our really big break It was at that breakfast that I met a number of other Greystar executives with whom I developed relationships that I still have and value today, and it was the people at that breakfast table who eventually allowed me and Derek to do a “pilot” of our program on a few properties to prove our value and prove that we could operate on the high functioning levels on which Greystar and other similar premier multifamily operators run.

When you reflect on your life and work, what are you proud of?

I consider my biggest personal accomplishments to be escaping the trailer park, becoming a pilot, serving my country as part of the Air Force, winning The Amazing Race, writing a book to fight against the military’s Don’t Ask Don’t Tell policy, and passing the California Bar Exam.

What additional impact does your company have that didn’t make it into your elevator pitch?

When it comes to LeaseLock, I am proud that the reason I started doing this was to ensure that others did not feel what I felt when I was denied housing. My mission was to help others more easily access housing that they could truly afford, removing annoying and unnecessary barriers.

I truly love that the bigger, badder LeaseLock of today does the same thing. We remove the expensive, annoying, and unnecessary security deposit from the many worries renters endure when securing any new home for themselves and their families. I know that this is one of the major reasons I am able to still get up every day, motivated to lead the most talented team imaginable as we tackle the security deposit problems of renters and multifamily operators.

What’s something that your coworkers don’t know about you?

They probably don’t know how in awe I am of each and every one of them. When you have an idea and, suddenly, wake up realizing that so many talented folks have chosen to join you to make sure that idea succeeds, it really hits me, continually, that the most important thing about LeaseLock is that group of people.

What is your desert island book or movie?

The movie “Burlesque.” It has everything. Rags to Riches. Struggle. Success. Great entertainment. Cher, Christina Aguilera. And Cam Gigandet.

You have a whole day at your disposal, but work isn’t allowed. What do you do?

Call my Mom. Get a workout in. Play “get that toy” with the dogs in the backyard. Ride bikes along the beach with my fiance before we order a pizza and watch a movie. Too boring?

If you could solve one issue in the startup world by snapping your fingers, what would it be and why?

Creating a “founder’s crystal ball” so VCs could truly see the future success that hard-working entrepreneurs will eventually have. This would make raising large amounts of money so much easier!

Name and unpack one challenge in working at a startup that no one ever told you about?

That managing email and communication would become a full-time job in itself. As the company grows, and talent takes over more and more functions that you, yourself, performed previously, your job literally becomes keeping up with the progress and expansion of each one of those functions. Your decision-making abilities are only going to be as solid as your ability to understand the intricacies and step-by-step progress required to create all of that growth. So get ready to read until your eyes feel like they are bleeding. (laughs)

What’s the best advice you’ve gotten that you’d share again?

That the size of your life is going to be proportional to the size of the problems you seek to solve in your work. You can open a convenience store down the street, or you can start a chain of convenience stores. The real truth is that you’ll spend just as much time and energy putting together and running the one convenience store as you will organizing and owning a whole chain of them. The latter solves a bigger problem — providing convenience for millions instead of hundreds…and the rewards will follow suit.

Thank you for sharing your story, Reichen!

This was also published on LinkedIn.