Where Real Estate Gets Its Dirt

NAR REach program: “shady and predatory”

This accelerator charges its companies $25,000. That’s just wrong — right?

“And it’s why it’s surprising that REach, the just-launched accelerator program from the National Association of Realtors, charges its companies as much as $25,000 to participate in the program. The fact was conveniently left out of my briefing on the program for this story, and since I learned about the fee, I’ve asked several accelerators if they’ve ever heard of such a practice.

The answer was a universal “no,” with the only other comparable example being 500 Startups. That accelerator charges companies a program fee of $6000 per founder and $3000 per non-founder (the average cost for companies is $12,000 to $15,000, I’m told), but 500 Startups also invests $50,000 in each startup for a five percent equity stake, meaning the companies alway net positive. The consensus among industry people I talked to was that an arrangement that charges companies and takes equity with zero capital invested seemed shady and predatory. Some even equated it to the much-maligned pay-to-pitch events that take advantage of desperate startups’ need to get in front of investors.”

There was always something that bothered me about NAR’s angle on this. PandoDaily nails it.

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