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Alternative Boarding Site Raises $1 Million to Fund Expansion

Posted: March 19, 2012, 4:55 p.m. EST


Los Angeles-based Dog Vacay, an online site that allows pet owners to find home-based boarders and other dog service providers, raised $1 million in seed funding to help it expand nationally in a financing round led by Santa Monica, Calif.-based First Round Capital, the company reported today.

The site allows professional and casual pet care providers in Los Angeles and San Francisco markets to sign up for free and market their services to dog owners, with a major draw of providing boarded dogs with a home, “cage-free” environment at much less expense than a commercial boarding facility. The company says its home-based boarding services average half the price of kennel boarding. Dog hosts set their own prices.

“First Round Capital looks for innovative ways the web can disrupt large and inefficient markets, especially those with high rates of dissatisfaction, like dog boarding,” said Howard Morgan, managing partner at First Round. “With Dog Vacay, we see a very unique way to leverage a passionate community of dog lovers into a collaborative network that gives dog owners a better solution to the $10 billion pet services market.”

Dog Vacay

Dog Vacay also provides medical insurance to boarded dogs, screens dog hosts, and provides emergency support to both hosts and customers, the company said. It charges a 5-10 percent service fee for service bookings (all bookings are required to be made through Dog Vacay or host will be booted). Service fees go down the more business a host books. The site also charges the same service fee for other services it lists, including dog walkers, trainers, day care providers and pet sitters.

“The response to Dog Vacay has been overwhelming, and we’re seeing tremendous demand to offer the service across the country,” said Aaron Hirschhorn, founder and CEO of Dog Vacay. “We’re going to rapidly deploy across the country in the coming months and are gearing up for the very busy spring and summer travel season.”

The company said more than 3,000 people had applied to become dog hosts on Dog Vacay, with about 1,000 accepted to date.

In addition to going national, the company has also registered related domains, including CatVacay.com, PetVacay.com, SnakeVacay.com, BirdVacay.com, FishVacay.com and HamsterVacay.com.

As part of the funding, Morgan and Science Inc. CEO Mike Jones will join Hirschhorn on the start-up site’s board.

Jones, former CEO of Myspace.com, founded Science in November 2011 as a technology studio designed to create, acquire and grow digital businesses. Science Inc. backed the March 1, 2012, launch of Pet Vacay, the company reported.

Other investors include Ted Rheingold, founder and general manager of Dogster.com, owned by Say Media, another First Round portfolio company.

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Alternative Boarding Site Raises $1 Million to Fund Expansion

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So, am I correct in assuming that the companies backing this unsafe pet-risk move are also assuming the liability for non-compliance with local zoning, business licensing, taxable income reporting for themselves and their employees or sub-contractors? Worker's compensation? Or should I assume they are acting within the laws of operating a business and over-seeing income distribution and intake reporting? Compliance with local zoning laws? 6' Fenced yards? Homes with double gates? Existing relationship with a vet in good standing? Someone home with the dog or is the dog crated all day? Behavior experience? Pet first-aid experience? Dog proofed home? Temperature controlled? There are thousands of other issues that go into taking in one dog, much less 10 times that amount or more.

If they were independent contractors, then they are in violation of the definition of an independent contractors and for everyone PetVacy retains for services ... the company is responsible for reporting all income so YOUR income will be reported and taxable. That will trigger animal control and the Dept of Ag. to see if you are operating in compliance with THEIR separate rules.

So all you get-rich potential participators out there... you could be getting a knock on the door from your local animal control, IRS, state taxes, Dept. of Agriculture and more because you thought taking in a pet belonging to someone else was that easy. You also face liability for all communicable diseases, pet loss or illness, injuries to you or anyone the dog injuries while in your possession. Remember, if it sounds too good to be true... it probably is. Bottom line there is nothing legal in any state about taking in a dog to watch other than your own without being bound by zoning, licensing, taxes, income property income, liability insurance and many states have laws allowing them to inspect your home at any given time. This is at the very least of what is required to take in a dog for income. Doesn't matter if family or friend, you are bound by the same laws. Yeah, great idea. The companies backing this should hang their head in shame for encouraging such reckless pet care and engagement in illegal business income and operations.

Pet care, like child care, has definitions, requirements, income requirements, zoning compliance, sanitation requirements, exercise requirements, cleaning supply requirements, labor and worker's comp requirements... all because you take in one dog for income. Yep, go ahead... commit fraud to earn that extra $20/night.
Susan, Buffalo, NY
Posted: 4/8/2012 7:37:42 AM
Some quick research… boarding dogs in your home is considered using your land and property to make money so that classifies the property as income producing property. LINK . Home owner's insurance would require extra insurance if they know according to several insurance sites.

Is animal boarding taxable? " ... To begin, you need a tax id. Second, a business tax registration is required. That registration is different than sales tax, income tax, or employment tax. It is also called a home occupation permit or business permit license. Finally, you need to register a fictitious business name, ... you could register an S or C corporation or set up an LLC. LINK

LINK
LINK

Yes. It's a taxable service in every country and country world-wide. If you accept money for services (ANY type of service) then you are effectively earning an income ... and have to declare the money.
Zoning laws govern the area and can pose restrictions on how local ... LINK

LINK
LINK

Ok, I'm certain thousands are thinking quick unreported $ or over the table easy income - not thinking zoning, licensing, insurance - all mandated.

I cannot fathom these big companies are jumping on this w/o checking out requirements of each home being zoned, licensed & insured. It doesn't matter if one dog, family or friend. Law says it has to be declared.

OMG, and the communicable diseases that will take off without any sanitation in place? Pandora's box.
Susan, Buffalo, NY
Posted: 4/8/2012 7:36:15 AM
People also need to realize that their homes will now be income-producing properties and their insurance companies need to know that, as well as their mortgage lenders and tax entities. You need to have animal bailee insurance in case the dog(s) escape from you. You also may have to be licensed to collect and pay sales taxes in some states. I know you cannot get a reverse mortgage on an income-producing property, so you probably cannot have or get a conventional mortgage, either. You will have to file a Schedule C each year for your new business. Zoning may also be a problem. My neighbors were not allowed to have a bed and breakfast. If the dogs bark, someone will turn you in. You may also lose your homestead exemption on your real estate taxes and it may be taxed as a commercial property. Now you are finding out why boarding isn't inexpensive! I paid all these extra costs for 12+ years when I operated my boarding kennel.
Maxine, Clear Lake, IA
Posted: 4/7/2012 12:49:04 PM
It's against the law in Iowa to accept money for boarding pets unless you have a boarding license and have been inspected. All surfaces where the pet is kept must be impermeable to chemicals and must be disinfected daily. You also have to keep vaccination records. You also can't mix dogs from different families together without express written permission. I ran a boarding kennel for over 12 years and know the laws. Good luck with this venture in Iowa.
Maxine, Clear Lake, IA
Posted: 4/6/2012 9:38:00 AM
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