Pacaso, a company that sells fractional ownership in vacation homes, is selling shares to individual investors as it struggles to adapt to a tough real estate market.

Founded in 2020 by former Zillow executives ​​Austin Allison and Spencer Rascoff, Pacaso bills itself as an easier, cheaper way to own a luxury vacation home. The company buys homes in vacation hotspots like Lake Tahoe and coastal South Carolina, furnishes them and resells stakes in the houses. Individuals can purchase between 12.5% and 50% ownership in the home and use the space an equivalent percentage of the year.

The company takes pains to distinguish itself from timeshare companies, pointing out that buyers own actual real estate, not just the right to use a property during a specific time, and can easily sell their stakes and potentially realize gains.

Financial information filed with the Securities and Exchange Commission as part of the offering shows why Pacaso is seeking fresh funds now. The company’s revenue dropped 59% between 2022 and 2023 after it slashed marketing spending and sold fewer home shares. It lost $36 million last year, and nearly $82 million a year earlier.

Last year, Pacaso sold 329 one-eighth shares in its properties, down from 593 in 2022. More than half of the shares sold last year were resale transactions. In its regulatory filing, Pacaso blamed the sales drop on “various macroeconomic factors including increased interest rates and inflation, which led to consumers uncertainty with respect to purchasing real estate,” as well as reduced marketing.

“When you have the opportunity to raise money, you should seize it,” Pacaso Chief Executive Officer and co-Founder Austin Allison said in a statement to Yahoo Finance. “Pacaso's Reg A offering represents a strategic decision to diversify our investor base and raise capital in a cost-effective manner.”

Allison added that the company plans to use proceeds from the offering to help grow the company. Pacaso is selling the shares under SEC rules that allow small and mid-sized businesses to more easily raise money from individuals. It’s looking to raise as much as $75 million.

Pacaso’s homes require a certain level of disposable income – its offerings include a $755,000 1/8th ownership in a four bedroom, 6.5 bathroom ski home in Breckenridge, Colorado, or $299,000 for the same-sized share in a three bed, four bath home in Palm Springs, California.

The company says its business “appeals to a growing market of couples and families.” Its current clientele is mostly wealthy, with an average household income of over $1 million and a net worth of more than $5 million.

Pacaso, which has raised more than $200 million from major venture capital firms and once boasted a “unicorn” valuation of over $1 billion, is selling shares to the public for a minimum $1,000 investment.

The campaign touts the opportunity to invest alongside top venture capital companies like Softbank and individual angel investors including former Starbucks Chief Executive Officer Howard Schultz. It points to internal research showing 20% co-ownership growth, and argues that recent interest rate cuts are boosting customer demand in a challenged market for affordability.

Investing in any early-stage startup is ultimately a risky proposition: Pacaso’s offering circular provides an overview of a number of investment risks, including that there isn’t currently an established market for its stock, and investors should be prepared to hold it indefinitely.

Equity offerings aimed at the masses have been around in their current form since 2015, when the SEC loosened certain fundraising rules. A 2023 study of these filings by David S. Krause, an emeritus associate professor of finance at Marquette University, found that startups were successfully getting more access to capital through such offerings, but suggested that more research should be done on companies’ long-term performance and investor protections.

Glenn Downing, co-founder and principal of investment adviser CameronDowning in Miami, Florida, said he emphasizes the difference between saving, investing and speculating to his clients interested in funding startups.

“Speculation is at the far end of the risk spectrum, and here the expectation is less about return but more about a chance to hit big,” Downing said. “Money allocated to speculation should be money the investor can afford to lose.”

Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.