John Machacek, Chief Innovation Officer for the Greater Fargo Moorhead Economic Development Corporation, has worked with countless startups throughout our community over the years. He knows their ups, and their downs, but most of all, he knows the questions to ask them. Here are John Machacek’s 10 questions for Adam Zach, CEO, Zegacy.
1. This is a bit of a first where I’m revisiting one of my earlier interview subjects to catch up on some changes. First of all, will you please tell me your Zegacy elevator pitch?
We’re the space between renting and owning. We turn renters into homeowners and give real estate investors their next property with a buyer already in place. A lot of people call this “rent-to-own.” Zegacy is the first rent-to-own marketplace.
2. Can you elaborate a bit So, like I just referenced, you were my fifth interview for the magazine back in the July 2020 issue. That was for your startup, Set Your Rent, which you have since rebranded to Home Equity Partner. Will you please explain at a high level, the difference between your new startup, Zegacy, and Home Equity Partner?
Home Equity Partner raises capital and buys homes itself for renters to live in, and then eventually own. Zegacy doesn’t buy homes—it is a marketplace that pairs renters who are close to mortgageready, which is usually 1-3 years out, with independent investors who buy the home and later sell it back to the tenant. Home Equity Partner owns assets; Zegacy never does.
3. With that, I can right away see you have a twosided market. And when I looked at your website’s homepage, basically right away, you see the options “I’m A Tenant” or “I’m An Investor.” Will you please comment on fostering and work on these markets?
Two-sided marketplaces are tricky – you have to nurture both sides. We are focused on building the investor, aka supply, side first, so every renter, aka the demand side, has a real path to homeownership. Investors tell us what they want to buy, browse opportunities, and pick deals with a resident already lined up. At the same time, we foster the tenant side with a simple intake and instant match score so renters can shop any home on the market—like a preapproved buyer—with a clear path to ownership.
Most of our leads come through paid ads or partnership referrals such as agents, lenders, and more. We nurture these leads through a lot of education and tech: steady content, an AI chatbot, feature improvements to our matching algorithm, along with a lot of one-onone conversations about rent-to-own. Our team has seen both sides—one of our founders is currently living in a rent-to-own home—and together we have the experience of facilitating over 100+ rent-to-own transactions. Our platform is improving to help guide clients step by step, from matching to under contract to closing.
4. While you’ve been perfecting and proving out the rent-toown model for both market sides over the past five years, I’m sure there is still quite a need for educating people about this. When I was on your website, I also noticed an “Ask Me Anything” chatbot feature. Am I correct in that assumption about the need to answer questions or educate potential investors and renters?
Absolutely. Rent-to-own has a reputation gap, so we lead with education and transparency. Our site starts with a plain-English “Everything You Need to Know About Rent to Own Homes” video that covers pros, cons, and who should—or shouldn’t—use rent-to-own, plus an Ask-Me-Anything chatbot that walks people through Zegacy’s step-bystep process. We review the chatbot’s question log to spot confusion and then update our content, support, and matching accordingly. For investors, when they click into a resident or property, intuitive calculators pre-filled with typical assumptions help them model returns—including 18 and 36 month examples—so they can decide quickly and confidently. For renters, the goal is the same: clear answers first, then action if appropriate. In fact, with most clients, we suggest they simply rent or wait to qualify for a mortgage because rent-to-own can be more expensive than a traditional rental; when it fits, though, it can be a great win-win for tenants and owners.
5. You participated in gener8tor’s gBETA program this past year. What can you tell me about your experience with that?
Absolutely loved it. It was a short, intense, non-dilutive sevenweek sprint that raised the bar. It challenged us, provided accountability, and was an immersive experience with our founders. Gener8tor’s amazing mentor network delivered fantastic advice and provided warm introductions to lots of new contacts. During the program, we rebuilt our website, clarified the model, and tightened our focus—moving from an early subscription experiment to a transaction-based marketplace with a clearer path from match to offer. That combination of challenge and accountability changed how we operate day-to-day, and it set a higher standard for the company going forward.
6. From gener8tor’s perspective, I would guess your progress has been a sign of their success, too, as one part of gBETA is helping startups get prepared if they decide to raise private equity funding. And you are now in that phase as we speak. Raising private equity funding. How has the process been to be a startup raising private funding?
I have raised capital before for real estate, where the goal was optimizing for ROI based on specific tangible assets. A disruptive marketplace, on the other hand, needs fuel to launch and scale, so we chose the venture path based on the total market size. I think that is the difference between a small business and a startup, one is going for profit day one, and the other is more about creating a disruptive product for future monetization.
gBETA and Gener8tor really helped us solidify what we wanted, determine valuation, and craft our messaging. I actually really enjoyed sharing our vision and mission with as many people as possible. Most would provide feedback, suggestions, and improvements to make the product better.
We are fortunate to be closing our angel round with roughly $170,000 in secured funding, which will allow us to expand on the 100 users we currently have and progress the tech feature sets.
It is also a great benefit to have things like the North Dakota Angel Match Program geared at helping entrepreneurs in North Dakota.
7. Thinking of the desire to get more people into homes, that reminds me of a question from that 2020 interview where you talked about how this is bigger to you than just getting a financial return. Does the scaling of Zegacy further feed into that?
100%. Impact—not just returns—is why I’m building Zegacy. I don’t have to do this; I WANT to do this.
I have a reminder in my iPhone that goes off at 8 a.m. every day, which asks, “Who can Adam, and only Adam, uniquely serve today?”
Scaling the company simply scales the outcomes: more renters become owners, and more local investors put capital to work with purpose. That was a big takeaway for me during my time in Bismarck as a recipient of the Goldman Sachs 10,000 Small Businesses Program— if we can 100X the model, we can 100X the number of families who become homeowners. The “aha” moment was realizing tech needed to be leveraged to accomplish this.
My favorite moments in the business are the photos when someone moves in and then, months later, when they qualify for a mortgage—see the full transition from renting to owning.
Since rent-to-own has a mixed reputation, part of our mission is to do it transparently and help give the category a good name. Even at this stage, we’re seeing it work. In the last 90 days, we onboarded 60 renters and 20 investors, made four matches, with one new home under contract. Zooming out, 36.2% of Americans rent—the highest in 50 years—so the need is huge. Our goal is simple: more owners, stronger neighborhoods, and returns investors can be proud of.
8. You are one of the most organized entrepreneurs I’ve worked with, and you are diligent about asking questions about resources, following up on those, and actively using them. Do you have any thoughts or comments, or tips you might want to share about organizational process or maybe even just entrepreneurship in general?
There are so many lessons learned and tips I’d give, but I’ll boil them down to these:
First, wake up early. I can’t think of a single habit that’s boosted my productivity more than replacing 8–10 p.m. with 4–6 a.m.—trading two hours of usually unproductive TV/food binging in exchange for setting goals, planning, exercise, and deep work.
Second, partner up. I’m blessed with wonderful business partners and cofounders. They’re better than me at so many things. With shared vision and values—but complementary skill sets—someone like me, who is more creative and pie-in-the-sky, doesn’t get burned out by the day-to-day details. You don’t have to get “business-married,” but a strategic hire, JV, or partnership can improve your odds and reduce sleepless nights.
Third, be a lifetime learner. Always be consuming books—I love audiobooks at the gym, networking with people smarter than you—lunch is great, and finding new ways to learn. Time is tight, so most high-charging entrepreneurs should cut news, most social media, sports, and friendships that don’t serve bigger ambitions. It’s amazing what 20–40 minutes a day can teach you—saving years of frustration and fast-tracking your growth.
Fourth, persistence. The life of an entrepreneur is hard. Only in the life of an entrepreneur can you have both the best day of your life and the worst day of your life on the same day. The entrepreneur roller coaster is full of uncertainty, highs and lows, and a lot of risk. By default, entrepreneurs create ideas, but we have a hard time sticking with the ideas that actually work. We tend to jump from one idea to the next, never giving each idea the time it needs to determine success. I am guilty of this, and it’s hard to determine when to pivot and when to persevere. Most of the time, a poor idea executed well will work. However, a great idea executed poorly will always fail.
Lastly, non-negotiables. With all the sacrifices entrepreneurship requires, define what you won’t sacrifice. For me, it’s health and relationships—along with my values, such as faith, freedom, etc. No amount of business growth should compromise the two things that bring the most happiness on Earth: your health and the quality of your relationships. Determine your non-negotiables and be willing to sacrifice the rest.
9. If you could jump in a time machine and visit Adam from a number of years ago, what kind of hindsight advice would you give yourself?
It would ironically be a lot of the advice I just mentioned. But a few that are personal to me would be:
One, don’t start so many projects. Focus on the one or two that matter most and put all your attention there.
Two, educate first, sell second. People don’t buy from people they don’t trust. Through education, you help clients make the best decision—even if it’s not your solution.
Three, eliminate, automate, delegate. Most things should not be done by you. My framework is, can this be eliminated, can this be automated, can this be delegated? Only after those three filters should it be something I take on.
Four, join masterminds earlier. There’s a ton of free content and networks that I recommend starting with, but I’ve personally gotten 1,000 times the value in paid mastermind groups where the caliber of the room is above my level. I’ve made great connections and learned a lot in those communities. Start small and go from there.
10. What can we do as a community to help you and Zegacy succeed?
Two things: spread the word and partner with us. If you know a renter who’s close to mortgage-ready, send them our way. If you know an investor looking for their next property, introduce us—the fastest way to help is a warm intro. Also, some specific asks would be:
Agents: Bring motivated renterbuyers and inventory. You get paid on the original purchase or sale.
Lenders and Bankers: When you have a non-qualified mortgage applicant, send them to us. We can often pair them with an investor you can finance today, and you’ll likely handle the take-out mortgage later for the tenant— double win.
City, County or State leaders and nonprofits: Consider a government sponsored rent-to-own support program—similar to Section 8 or down-payment assistance. Let’s pilot a rent-to-own pathway to create more long-term owners.
About John
John Machacek has been helping local startups with the Greater Fargo Moorhead Economic Development Corporation for over a decade. Before joining the GFMEDC team, Machacek’s career path has varied in areas such as banking, accounting, and management in the non-profit, food & retail sectors.
Zegacy
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