The Insider: Pierre-Camille Hamana on Hospitable and $HOST
Learn about Hospitable’s funding model that gives its customers and team a role in shaping the company’s future and brings them onto the cap table.
In this episode of the Hospitable Hosts podcast, we are excited to bring you a special Insider session with Pierre-Camille Hamana, Founder and CEO of Hospitable. Pierre-Camille started Hospitable in 2016 to solve a problem he faced as a host: automating guest communication for his Airbnb rental. Since then, he has grown the company into a platform that empowers thousands of hosts to run their vacation rental business more efficiently.
In this Insider session, Pierre-Camille answers questions from the members of the Hospitable Hosts Community about investment opportunities with Hospitable, the company’s future, a community ownership model, and the $HOST token.
Press Play now to learn more about Hospitable’s funding model that gives its customers and team a role in shaping the company’s future and brings them onto the cap table.
If you prefer to read the highlights, we’ve got a summary of the key takeaways below.
Rolling SAFE Valuation
The Rolling SAFE is a blockchain-based innovation that allows Hospitable to continuously raise funding from its community. “The Rolling SAFE valuation is a valuation at which customers, team members, and members even of the general public can invest in, provided they are qualified,” Pierre-Camille explains.
Hospitable launched this offering in 2021 with a starting valuation of $15 million, and it is now valued at $53 million, reflecting the investment interest in Hospitable. But the business has been growing at a much faster pace, and the company is now at a $22 million annual run rate.
Pierre-Camille points out that the business is growing every month, and there is a mismatch between the valuation sought by private equity in potentially acquiring Hospitable and the current Rolling SAFE valuation. The Rolling SAFE valuation is discounted compared with the actual business to a point where it no longer makes sense for Hospitable.
“We have customers, team members that are investing right now that, based on just the same data, they invest because they have a proxy equity into Hospitable are basically doomed to be making 7x on the same day,” Pierre-Camille says.
“But the thing with the Rolling SAFE valuation is that we can actually do this change,” he notes. “We'll be performing a series of adjustments over the next few months with one operation per month that basically will be progressively increasing the valuation of the Rolling SAFE to our target above $250 million, which I believe would still be discounted from the situation where the business will be in.”
Hospitable’s Exit Strategy
Pierre-Camille underlines that he is not in any rush to sell the business, as there’s a lot to be done to fix customers’ problems. “But Hospitable is a business. It's a company. Private equity firms have acquired property management software companies that are operating in the space. They may have been purchased by a competitor. They may have been purchased by another company in an adjacent space. Those exit options remain fully available to Hospitable.”
Pierre-Camille explains that by incorporating the $HOST token and the community float, he has introduced an extra option for liquidity and a strategic perspective on what it means to create a business like Hospitable.
“Having a community ownership of Hospitable means that there will be a massive number of those investors across the community. It means you will need to have a 51% float to receive 51% of the proceeds in the event of Hospitable's exit, such as an acquisition by a private equity firm.
We have pledged those proceeds on illiquidity to the community. So there will always be a part of the proceeds of Hospitable that will always go back to its investors, prominently its community, and therefore its customers, as we wish to view on our cap table.”
$HOST is Hospitable’s Tokenized Stock
Pierre-Camille notes that $HOST is not an equity. Hospitable is owned by Pierre-Camille Hamana, with two other minor shareholders.
“We basically want to be able to raise some capital, distribute the proceeds of a potential sale of Hospitable, giving a bit of an equity incentive to the team that’s working with us, without necessarily affecting the governance of the company. So the way we structure this is with a tokenized derivative of our equity, which is structured in a SAFE based on the YCombinator Standard Agreement, which is a simple agreement for future equity.”
Pierre-Camille highlights that the SAFE is a standard legal instrument for startup fundraising, used widely for startups not undergoing a large institutional equity investment.
“The concept here is that this instrument, called a SAFE, would basically continue to exist during the entire lifetime of the company, until the moment when there is some liquidity. The thing is, we want to give a stake in our business to everybody who wants to be a part of the journey. It doesn't actually have to be equity. It can be just a right to the proceeds of Hospitable equity. And that’s what this tokenized stock is actually about.”
Pierre-Camille underlines that this approach is “a different path” than getting acquired at all costs or going public. It’s a middle ground that allows a company to remain private, focus on innovating, and still offer liquidity to its employees and earlier investors.
$HOST Dividends and Payouts
Pierre-Camille explains that by investing in the $HOST token and signing the Rolling SAFE as an investor, you will receive a pro rata on the tokens of the proceeds of a liquidity event.
“That means when Hospitable is acquired, when Hospitable goes public, then that converts into either cash in the case of an exit or stock that you then can trade in the case of an IPO, or other equivalent things. That doesn't give you the right to receive any kind of dividends from the company.”
Pierre-Camille thinks it’s unfair if the business owner distributes a lot of dividends for themselves or existing shareholders, which is why Hospitable doesn’t have a dividend distribution policy.
“Now we are exclusively barred from distributing any dividends. This means that the common shareholders are now on the same level as the $HOST token holders. There is no dividend being paid out. We’re all in on a potential exit or a liquidity event that would allow us to receive a check.”
Unfair Advantage
“One other thing that I always reflect on at Hospitable and how we’ve been progressing over the years is the fact that we've been really good at turning what were weak points into strengths,” Pierre-Camille says.
“You could say a lot of things around product, around sales, around marketing, everything that we’re doing. We try to do something a bit differently, not exactly necessarily following someone else’s playbook, but that resonates really well with us.”
It also refers to a strategic choice of the funding model that helps ensure the company can operate independently with good profitability. “We always heard that because you're a bootstrapped business, you cannot achieve great things. Well, $22 million later, I tend to disagree,” Pierre-Camille underlines.
“But the thing is that because our equity could not be put to work, we decided that there’s got to be another way to make it work for the benefit of the company and for some other intangible benefit, which is having your own customers in the cap table, to receive the proceeds. It feels great. It feels great now, and it will feel great a lot later whenever the business is sold.”
Tune in to the full episode of the Hospitable Hosts podcast to hear insights from the Hospitable CEO.
