ADENA HEFETS - CO-FOUNDER AND CEO @ DIVVY HOMES
“Building a company forces you into a leadership role. I’ve grown to lead in an authentic way that is very direct, transparent, and honest.”
Meet Adena Hefets, Co-founder and CEO of Divvy Homes, a fractional homeownership platform with the mission of giving access to homeownership to everyone. Adena began her career in finance gaining experience in Investment Banking, Private Equity, Hedge Funds, and Venture Capital before starting Divvy Homes. We chatted with Adena about her journey from finance to entrepreneurship and the lessons she learned along the way.
Tell us about yourself. What was your childhood like?
I grew up in Long Island, New York where my dad had immigrated. My mom also grew up in New York – in the Bronx. I’m the third of four kids and since I was young, I wanted to see the world. I remember I came home to my parents one day and told them that I wanted to be an ambassador, having learned about the role through Model UN. In line with these interests, I attended Cornell to study public policy thinking I’d go into government.
How did your early beginnings lead you to enter a career in finance?
I had to find a way to pay for college and knew my summer internship could make a huge impact. I went to our career center and asked what paid the most – and that’s how I found my way to Goldman Sachs. I applied and was accepted for a summer position my sophomore year as an HR analyst. As I looked towards my next role I was encouraged to stay within the HR group but I wanted a more quantitative position so I moved into investment banking at Merrill Lynch. I didn’t know anything starting out, but I learned quickly.
You’ve had a varied career path across investment banking, private equity, product management, venture capital, and now founding a company. Was there a common thread running throughout?
I’m grateful to have been guided through my career by some incredible mentors. I worked with a guy named John Lee at Merrill Lynch who helped me get an associate position at TPG. He kindly invested his weekends tutoring me until I could do LBOs by hand and I ended up landing the job. TPG was an amazing learning experience. However, after my two years, I came to realize that though I liked learning about companies through diligence, I wanted operating experience.
I joined Square to be an Analyst on the Finance and Strategy team, making about 1/5 of my previous salary. Early on I met an awesome product mind named Ariana who had an idea for a loan product but needed some help with raising debt capital. I knew debt and pricing loans well and we ended up building Square Capital together. Within a year we had scaled from nothing to $100M worth of loans. At that point Square brought in leadership to manage the fledgling business and we both ended up heading to business school.
At business school, I knew I wanted to start a company but needed to find the right partner. At that stage I’d tried every asset class: Investment Banking, Private Equity, Hedge Funds – Venture Capital was the only left so I jumped in. I stayed for 9 months before leaving to found Divvy.
How did you come up with the idea to start Divvy Homes? What problem does the company solve?
The exciting point to build products is when there is an inflection point in the market. I was spending all my time deep in real estate because something weird was happening – in 2006, we saw a drop in home ownership but even as we saw the economy recovering, the rate of homeownership continued to decline. It was 2016, we were a decade out, and I couldn’t make sense of what was going on. Everyone kept saying ‘millennials like to rent’ but I didn’t believe that. I read all this research and learned that people did want to own homes but couldn’t because they lacked access to affordable mortgages. I started writing white papers and was soon introduced to my co-founder Brian through a mutual friend. He was also looking to change the way that homes were being financed and we immediately connected in our mission to solve this problem.
Can you explain how Divvy works?
We wanted to find a way that the everyday person could own a fraction of a home and gain exposure to real estate, a great risk-adjusted asset. Divvy allows customers to pick out a home which we then buy. They contribute a small down payment to cover ~2% of the equity and over time build equity through payments which are split between rent and equity. They can log onto their customer portal at any time and see how much of their home they own.
Divvy Homes just raised a Series A round with backing from Andreessen Horowitz and your former employer, DFJ. What was the fundraising process like?
We’ve raised about $30M thus far and have been very fortunate - we raised our Seed round in a day and our Series A in a couple of weeks. There a few reasons behind it. Firstly, we had already seen great traction. Secondly, we had early Product-Founder-Market fit (my debt market experience and Brian’s product experience). Lastly, it’s easy to see us becoming a billion-dollar company. For example, to be valued as a legacy REIT all we would need is 4k homes and given our tech we should be valued much better than that.
What is your view of leadership and how has your view of leadership evolved as co-founder of Divvy Homes?
In finance I was very much an individual contributor and really enjoyed it. I didn’t want to be a leader and to manage people.
However, building a company forces you into a leadership role. I’ve grown to lead in an authentic way that is very direct, transparent, and honest. I’m not shy in communicating my expectations for team member’s performance but have over time learned how to be more empathetic in doing so.
Leadership to me is ever evolving and I am a no BS, just get it done type of person. We’re all here to build a successful company.
What is the industry trend you’re most excited about?
Real estate tech! We’re at the start of a wave similar to where we were years ago with fintech.
What is your favorite or most interesting article from the past few months?
I listen to The Daily Podcast. There’s an episode called “10 Years After the Financial Crisis” which I’ve listened to multiple times.
Who is the female entrepreneur or investor you'd most like to meet and chat with?
Diane von Furstenberg. She was born in a concentration camp and her mother said you better go make something out of your life. She’s an incredibly driven woman.
What is the best piece of advice you have ever received?
Jim Coulter, TPG’s founder, spoke about pattern recognition in a way that extends to life. For example, how someone has reacted in the past can help determine what they might do in the future and allows you to better mitigate risks. It’s a really helpful framework.