Building in the Midwest: When Constraints Become Superpowers with Ryan Coon, Avail

Here's a story I think every Chicago founder needs to hear, especially if you're getting ready for your first raise.

Ryan Coon and his co-founder, Laurence Jankelow, bootstrapped Avail, a platform for DIY landlords, right here in Chicago. Around the same time, a competitor launched in the Bay Area doing essentially the same thing.

That competitor landed Jason Calacanis on their cap table, along with several other speculative checks. They reached a $10 million pre-money valuation.

Avail's first angel raise? Just a $3 million valuation.

Same market and timing, but a 3x gap in perceived value before either company had proven much of anything.

If you're a Midwest founder, this probably sounds familiar. You watch coastal companies raise at eye-popping valuations on a pitch deck and a dream while you're grinding to show real traction just to get a meeting.

It can feel like you're losing. But who actually has the upper hand?

I had the opportunity to invest in Avail just before their acquisition to Realtor.com. Since then I’ve gotten to know Ryan very well. I caught up with him recently to discuss what he learned from building his first company in Chicago.

Building in Chicago is different and building on the coasts. Investors tend to be more cautious and expect founders to do more with less.

As Ryan told me, the Bay Area competitor was valued on, "future promise and speculation of a dream." Avail was valued on "fundamentals and a multiple of revenue, traction, or growth."

It’s not just about business fundamentals, either. The entire startup ecosystem in the Midwest reinforces frugality. There is less VC money here than the coasts, which means investors require more proof before writing checks. And because most Chicago-based startups are built by first-time founders (compared to Silicon Valley, where many more people have high-growth startup experience), everyone in the ecosystem is more conservative about risk.

These constraints forced Ryan and Laurence to be extremely disciplined around unit economics. They knew it cost $100 to acquire a customer and that payback took a year, which meant they had to plan capital needs with precision rather than papering over inefficiency with venture dollars.

When Avail did raise institutional capital, they did so ONLY to fund growth through proven acquisition channels. They didn’t ask investors to fund speculation, just the gap between customer acquisition and ROI.

Being priced on fundamentals, rather than speculation, naturally drove Avail’s valuation down compared to their Bay Area competitor. But they also needed less money, which meant Ryan and Lawrence kept larger portions of their business, and therefore more control.

Mean, their Bay Area competitor was forced into a grow-at-all-costs rat race, which ended in a premature exit.

Fast forward a few years. The Bay Area competitor had already been acquired by CoStar.

Meanwhile, Avail was still standing and growing. Their fundamentals were strong and they were growing quickly.

When Covid hit, Ryan and Lawnrence started exploring strategic acquisitions. They talked with several potential acquirers. Because of their strong fundamentals, they were able to stay picky.

Then the largest remaining strategic buyer in their space came knocking: realtor.com.

When realtor.com evaluated potential acquisition targets, they looked at several startups. Ryan later learned that Avail's sophistication in tracking unit economics was "exponentially better than any other startup they reviewed."

That discipline, forced on them by a tougher fundraising environment, became the exact thing that made them the most attractive acquisition target when it mattered most.

Ryan also learned something after the deal closed: realtor.com was going to buy someone no matter what. If not Avail, they were ready to acquire a competitor. If that had happened, Avail would have been stuck competing against a well-funded rival with no remaining strategic buyers and a brutal fundraising environment.

The timing worked because they were ready and had a strong hand to play.

Note: Avail was a successful outcome for all investor shareholders.

If you're raising in Chicago (or anywhere outside the coasts), you will almost certainly raise at a lower valuation than a comparable company in Silicon Valley. You will have to show more proof, more progress, and stronger fundamentals.

This is not a disadvantage. This is your edge.

Here's why:

Ryan's single biggest piece of advice to founders today: obsess over customer acquisition from day one. Not product or features. Just customers.

If customers are buying what you're building, you won't run out of cash. And if you don’t run out of cash, you can't lose.

Ryan said something else that stuck with me. He suggests founders work backwards from who the potential buyers of your company are and start building those relationships immediately.

Avail maintained a list of likely acquirers for years. They manufactured reasons to get coffee with people at Zillow, Redfin, and realtor.com. When the acquisition opportunity came, they weren't starting from zero. They had existing relationships with multiple potential buyers.

These relationships weren't just about a future exit. They provided competitive intelligence, partnership opportunities, and market insights along the way. But when it came time to sell, having those warm connections was invaluable.

It's never too early to start that list.

Ryan Coon is the co-founder of Avail (acquired by realtor.com). He's now splitting his time between angel investing, advising early-stage startups, and building a private equity firm focused on manufacturing businesses. You can find more of his story on the Built to Sell podcast.