SaaS Interviews with CEOs, Startups, Founders
Founder First PE Playbook: Growing from $24m Revenue Bootstrapper to $400m PE Valuation
09 Oct 2022
Chapter 1: What is the main topic discussed in this episode?
Hey folks, hope your Q3 and Q4 is off to a good start. We just wrapped up Founder 500 in Austin, Texas. Hundreds of bootstrap founders showed up. It was an amazing time. I loved meeting so many of you.
This interview today is a recording from that session, which you're gonna love because now we have visuals, we have the founder teaching, and I made every single speaker include their revenue graphs and real artifacts in their presentations. Without further ado, let's jump in.
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Hello, everybody. Yeah, I'm going to actually walk you through, you know, what I would say probably the most unusual story here. We are all about bootstrapping. And I saw how many hands went up. I'm going to walk you through going from bootstrapping to really getting to, you know, exits along the way, multiple bites of the apple, if you will.
and still actually sort of maintaining, you know, the chance to make the dent that you're after. So Puroon Chara, Puroon rhymes with maroon. You'll remember my name now. We are in the board meeting business, a board meeting management business. Over the next 20 minutes, I'm going to actually walk you through You know, how we got started, you know, first product, really good success with that.
And then, you know, went on to really kind of just monetize that through, you know, first actually really took on debt to continue to bootstrap till we got to $15 million in ARR. Along the way, I had to clean up the cap table. There were some non-performing, you know, co-founders, if you will, that had to be, you know, managed.
And that took a while, but at that point I was able to take on some private equity money to accelerate the growth. And that proved the growth model. And then last year we took a bigger check from a second private equity transaction. Since then, we've actually gone on to do inorganic transactions and acquisitions. It's a big focus as well. So I'm going to walk you through this.
And trust me, you know, I am a bootstrapper at heart. I do want to actually kind of just salute each one of you guys who's doing this. It's extremely hard to show the discipline.
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Chapter 2: How did the guest transition from bootstrapping to seeking private equity?
So we eventually went there and certainly used some of the equity that we'd built in the financial services industry. You know, publicly listed companies, all of these are customers at this point, but going back to how we started in the financial services, I have 600 banks as customers today.
that accurately kind of just you know gives you a lot of credibility I'll talk a little bit about that finally you know the product the best growth hack will always be an amazing product a product that accurately Wow's every single user and that's still the goal for a big part of the organization this is you know sort of our board product
If you run a board and you want to be excellent in your boardroom delivery, it's an inexpensive product. It'll force you to think about your board meetings and what you get out of your board intentionally. Most organizations today actually really are dealing with what you see here on this slide, you know, a bunch of different digital duct tape helping you get your board decks out.
And if you want to get intentional, get really good in the boardroom, which, by the way, has huge returns, right? Your investors gain in confidence. You are deal ready all the time. Then you'll actually look at a product like this. That was the goal. There are two things that drive us at Onboard. And this is sort of, you know, you have to be that clear with your team.
The first one is we want to make sure that we build everything within the platform, everything that a board needs to do, not just the board book delivery, the board assessment.
the dno questionnaire you know ceo review um you know all approvals everything should be right there minutes routing should be within the platform so that's the first big heuristic that we are clear about the second heuristic is you want to make sure that the first i call this f tux first time user experience is an absolute uh amazing one which means when a new director gets your product
They should be wowed. We can implement our product within the same day. So if you had a board meeting this evening and you called us in the morning, we'll be able to implement that and your director should be able to run with it and your first meeting itself will go off seamlessly. That focus is extremely important when you're building the product in the early stages.
Once you do that, and that comes about only if you built
amazing relationship with customers other speakers have talked about this in my case my first customer was also somebody who gave us infrastructure we used their office they also advised a lot on operations side how do you get compliance certifications and such and eventually they became my date partner when i talked about buying back my co-founder my first customer since this was a financial institution
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Chapter 3: What challenges did the guest face during the financial crisis?
I do believe working through the COVID cycle was an interesting one just because you couldn't meet them. That was a tough part of doing an acquisition last year. You really had to do this remotely most of the times. And then while we're deploying capital into onboard business, we also had to think about now integrating a team, 60 people team out of Toronto. That really tested us as well.
So think about some of those pieces. The key lessons here when you do an acquisition which is more than 20% of your ARR, it's going to test you. You almost need to hire execs ahead of that transaction. When you go from a founder-led organization and you try to digest that company, you'll have to change the incentive structure very quickly. The founders will likely make good money.
Their way of thinking will adjust. They need a little time to adjust to the new context. But think about this. Every single employee in that company, all their customers, all their partners, they all need to be really thought about ahead of the transaction. All of that has to happen in a very short 30, 45-day time period.
So we've realized that for the next acquisition, we've started to run this M&A committee really well. This is one of the most rigorous parts of my business now because we do want to grow inorganically. That was the whole point of taking on this capital. So, yeah, over in the last 20 minutes, 20, 25 minutes I've spent sharing my story. These are the three important things to take away.
First of all, stick with a niche. Niches will bring riches. Certainly, you know, I can attest to that.
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Chapter 4: How did the guest adapt their product offering over time?
If you have 200 customers in the same vertical, you're going to be more investable than actually being spread over lots of different verticals. Number two, when you want to accurately explored, you know, you want to actually first make sure your unit economics are right. Once you nail it, it's easy to scale it. And lastly,
You know, if you stay in the game long enough, and I certainly feel like I am doing my part on that end, you will find that the best in your field will want to go become part of your journey. You'll be able to acquire a lot of these companies. A lot of these founders have looked at you for a while. So the goal here is to play long ball.
And if you do that and add that, you know, and add being excellent in the boardroom, which we can be good partners for, we'd love to actually help you get there. I think this could be a lot of fun. Thank you. That's how we did it at Onboard.