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Do you have any type of financial insurance to backup of your claim that you will cover losses if the property sells for less? I'm not talking about having the

Do you have any type of financial insurance to backup of your claim that you will cover losses if the property sells for less? I'm not talking about having the money available to cover the losses, but actually being around at all to honor that claim. What happens if I buy today and your company goes to hell in two years? How can I trust this transaction with a horizon of 3 years without fully knowing how are you going to perform as a company. Of course, if you disappear and I don't have to honor the 20% it's a win for me, but if I buy based on your data and after 3 years the property value is way down and you're not around to honor your loss-covering promise then I'm fucked. I bought a house because you told me it was going to appreciate, but it didn't. Now what? Do you have a way to pay me back even if your company is not around anymore? There's something about the model that doesn't make sense to me.

Hydraulix989 7y ago
My first reaction was: If this company goes under (like 90% of YC startups) and you took this sort of arrangement, then you are @#$!'d (all caps).
- loftyai 7y ago
  Hopefully my other reply answered your concern as well. If not, let me know, and I'll be happy to go into more detail.
- edouard-harris 7y ago
  Well over 50% of YC startups across all batches have either exited or are still alive.
  - loftyai 7y ago
    Wow! I knew it wasn't as high as 90% death rate, but 50% survival rate is actually quite high!
loftyai 7y ago
Great question! So, we actually maintain a 3rd party account that is only allowed to invest in short-term US treasury notes. We track all the properties in our portfolio daily. Any on paper depreciation will result in us depositing funds into the 3rd party account. Whenever a property price moves above the original purchase price on paper, we will withdraw any previously deposited fund. This on-going process along with the hedging instruments are what allows us to guarantee the downside protection. As a final layer of protection, we know exactly what our on going exposure is, so we know the maximum amount of contracts we can underwrite. We are very strict on this number and will never move above it. So, even if our company ceases operations, all of the downside protection will still be available to our customers. Keep in mind, we also know exactly what our on going
- whoisjuan 7y ago
  I understand the money part. My question is purely operational. Who is going to write me a check if Lofty AI, Inc. disappears? Do you have a contract with the 3rd party to do that?
  - loftyai 7y ago
    Ah got it! Sorry for the misunderstanding. Essentially in the case of our demise, our investors are not able to claw back the money in the 3rd party account. The rights will transfer over to our law firm to maintain kind of like an estate. They will be the ones to handle the operation of writing checks and sending funds to the correct counter parties down the line.
- mayank 7y ago
  > So, even if our company ceases operations, all of the downside protection will still be available to our customers. Can you expound on this a bit? If you go under, who would I have to go to get paid? What legal guarantees would I have in place assuring me the payout? How do I know that your underwriting scheme is sufficient for covering your exposure?
  - loftyai 7y ago

Hydraulix989 7y ago

My first reaction was: If this company goes under (like 90% of YC startups) and you took this sort of arrangement, then you are @#$!'d (all caps).

loftyai 7y ago
Hopefully my other reply answered your concern as well. If not, let me know, and I'll be happy to go into more detail.
edouard-harris 7y ago
Well over 50% of YC startups across all batches have either exited or are still alive.
- loftyai 7y ago
  Wow! I knew it wasn't as high as 90% death rate, but 50% survival rate is actually quite high!

loftyai 7y ago

Great question! So, we actually maintain a 3rd party account that is only allowed to invest in short-term US treasury notes. We track all the properties in our portfolio daily. Any on paper depreciation will result in us depositing funds into the 3rd party account. Whenever a property price moves above the original purchase price on paper, we will withdraw any previously deposited fund. This on-going process along with the hedging instruments are what allows us to guarantee the downside protection. As a final layer of protection, we know exactly what our on going exposure is, so we know the maximum amount of contracts we can underwrite. We are very strict on this number and will never move above it. So, even if our company ceases operations, all of the downside protection will still be available to our customers. Keep in mind, we also know exactly what our on going

whoisjuan 7y ago
I understand the money part. My question is purely operational. Who is going to write me a check if Lofty AI, Inc. disappears? Do you have a contract with the 3rd party to do that?
- loftyai 7y ago
  Ah got it! Sorry for the misunderstanding. Essentially in the case of our demise, our investors are not able to claw back the money in the 3rd party account. The rights will transfer over to our law firm to maintain kind of like an estate. They will be the ones to handle the operation of writing checks and sending funds to the correct counter parties down the line.
mayank 7y ago
> So, even if our company ceases operations, all of the downside protection will still be available to our customers. Can you expound on this a bit? If you go under, who would I have to go to get paid? What legal guarantees would I have in place assuring me the payout? How do I know that your underwriting scheme is sufficient for covering your exposure?
- loftyai 7y ago