LA Venture: Fifth Wall's Dan Wenhold On Real Estate Technology Investing

On this episode of the LA Venture podcast, Fifth Wall partner Dan Wenhold talks about his role at the firm and shares some of the changes he’s seeing in real estate technology investing.

Fifth Wall is the largest venture fund specializing in real estate. Their investments span real estate technologies, climate tech, infrastructure, supply chain tech, human resource tech and clean energy tech.

“Fifth wall is very startup minded,” Wenhold said. “Honestly, when it comes to growth, we're growth first, but at the same time, we also are constantly looking to be innovative. I think, as far as firms are concerned, we are a different type of asset management firm. We are not looking to just be solely a venture capital firm. We're looking to really lean into the different types of ways we can help out startups.”

Wenhold co-leads the $1B real estate technology fund at Fifth Wall and was one of the first 10 employees at the firm.

“We started investing in retail companies, which we don't really do as much of anymore,” he said. “Real estate 10 years ago hadn't yet woken up to I think the reality of technology impacting their businesses… That's all changed, and I think there has been pressure put on real estate owners in this economy in particular, where they're seeing their cost of capital increase.”

Prior to joining Fifth Wall, Wenhold served as a growth equity investor at global investment firm, Battery. There, he learned the importance of sourcing.

“To understand venture you have to be able to roll up your sleeves, make connections, network to find the best deals,” he said. “They're not just going to come to you, you're not gonna have a banker, or a lawyer or another type of third party bring you a company before anybody else finds it. If you really want to find the companies before anyone else does. You have to do the work yourself.”

He admitted that he wasn’t the best at sourcing companies, but got better as time went on. To date, “I still do a lot of sourcing [at Fifth Wall] even though I’m a partner now,” he said. “We don't have a model like at Battery where it's just really associates and analysts.”

In addition to traditional sourcing, calling and networking, Fifth Wall has hired a data analyst to professionalize the sourcing process.

“He set up a lot of great types of proprietary data lakes for us that drip into a dashboard that will alert us to when certain companies hit traction targets that we have or metrics setup,” he explained. “Everything from employee count to last amount raised.”

When Wenhold joined Fifth Wall, the firm only had a handful of real estate partners as LPs, but today, the number of strategic partners has expanded to a network of over 100.

“So we're really bullish on real estate technology,” he said. “And I think for the long term, we're just still in the very early innings of the transformation that's happening in this industry.”

dot.LA Reporter Decerry Donato contributed to this post.

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This podcast is produced by L.A. Venture. The views and opinions expressed in the show are those of the speakers and do not necessarily reflect those of dot.LA or its newsroom.