Austin-based Homads enters the crowded short-term rental market

How they do it: Homads allows homeowners or tenants to list their home or just a single bedroom for rent - but only for periods longer than 30 days. There is no limit on how long someone can rent through the site, though Nguyen said most people rent between 1 to 3 months.

The company currently is only operating in Austin and has 300 users.

Bootstrapped or investors: This company is bootstrapped, with no funding from investors. Nguyen and Chu said they have followed the "lean" startup philosophy that emphasizes bringing your product to market as quickly as possible and spending little money.

They raised $20,000 from friends and family through a crowd-funding campaign and received a $30,000 loan through People Fund. "We put our car and camera down as collateral," Chu said. "That's what you have to do when you're a startup - 90 percent of startups fail."

They are currently trying to raise $250,000 from investors.

Competitive edge: The biggest challenge for Homads is that there are several better-funded and far bigger competitors in the short-term rental market, such as HomeAway and Airbnb. Both companies allow rentals for longer than 30 days, though most people usually rent for shorter periods of time.

But Nguyen said it can be challenging for renters to find longer rentals through these sites because homeowners offer rates by the day or week, when usually they would accept less for a longer rental.