The Pitch: "Most prefabricated homes are designed to fit on the back of a truck, so they're boxy and unattractive. I'm offering another option: predesigned homes that are modest, energy efficient, and easy to assemble on your own site for as little as $100 per square foot. The homes are small but feel spacious. What's most unusual, however, is the shipping model. I sell detailed designs, plus a list of materials that customers can have shipped from nearby facilities, including Trussway for building supplies and Ikea for cabinets. I was the general contractor for the first three homes, which will be on sale in Houston this summer. Eventually I'll charge $3,000 to $7,000 for the list and drawings."
Company: Zamore Homes
Owner: Brett Zamore
Founded: October 2007
2007 Revenue: $30,000
2008 Projected Revenue: $150,000
Raised So Far: Self-funded through revenue from Zamore's architecture practice
Needed Now: $500,000 in seed money for marketing expenses and office rental, and to hire a business manager
Clients: First-time homebuyers; baby boomers seeking retirement homes
Recent Buzz: Mentions in Time, Dwell, Metropolis, The Washington Post, and the Los Angeles Times and on HGTV's What's With That House? and Small Space, Big Style
The Experts Weigh In
Keep an eye on quality
The most interesting thing is Zamore's shipping model. He is basically selling an idea; the fact that someone somewhere else can take his drawing and build a home is great. I think it's a very smart idea, particularly in a world with continually escalating fuel prices -- my own shipping costs have gone up 50 percent in the past three years. But there's a risk to this model as well. By having the homes assembled remotely, he is letting go of a prime spot for quality control. He will need to maintain constant contact with the contractors, to learn what confuses them and what works, and to make sure that the information he is selling is perfect.
Seek green investors
Zamore is a smart young man. He has generated great buzz in the design world and is realistic about what can and can't be done. And his designs are clever and inexpensive to build. But he's just learning how to expand. He runs his architecture firm well, but he doesn't have a track record as a businessman. It's not the right investment for a big venture firm that will want the company to turn a profit right away. Instead, Zamore needs an investor that is going to mentor him as he expands and is as passionate about this ecologically sound project as he is. He should seek out investors interested in green companies.
Who is liable for mistakes?
Houston is a great market, and Zamore has an audience of young professionals. But he needs to think through his business plan. He's got to write out an org chart and figure out who is going to deal with, say, the company that sells the wall panels. He needs to get legal advice to make sure each item that is sold in his name really works and to find out who takes responsibility when something goes wrong. I almost invested in a prefab company years ago and didn't because the liability if something went wrong was enormous. He also needs to be clear about the volume he will do: How many homes can he handle in a month?