"I used to think I was this made man," says entrepreneur Glenn Kelman. "That's what they tell you after you take a company public."

In 1996 Mr. Kelman co-founded Plumtree, a business-software firm that went public in 2002. After that, he assumed that his next idea was as good as paid for.

"Whatever I thought of, they'd fund it," he says.

Then, in 2006, Mr. Kelman became chief executive of a real-estate startup, Redfin Corp.

Redfin sounds like it would be catnip for technology investors. The company aims to overhaul how people buy and sell houses, using software and data to improve real-estate agents' customer service. Real estate is an opaque, expensive insider's game—exactly the kind of business that is ripe for getting blown up by a less-expensive, more-convenient Web-powered service.