SaaS Interviews with CEOs, Startups, Founders
"He Raised $900k And Sold For $1.8m... Why? "
06 Jun 2020
Chapter 1: How did the guest's journey in startups begin?
We were building and growing quite well during the accelerator. At the same time as we were sort of going towards a demo day for the accelerator, we were approached by Outbound Works.
So during Dreamforce, I had a beer with Outbound Works founder, or one of their founders, Ben, and we were talking about our different strategies and goals for our companies, and we realized that we were essentially trying to achieve the same thing.
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Hello everyone, my guest today is Anders Fredriksson. He's got 15 years of startup experience as founder, CEO, or CTO. He's most recently founded and is the CEO of ProLeads, which is acquired by Outbound Works in a seven figures cash deal plus stock just recently. And that's what we're gonna talk about today. Anders, you ready to take us to the top? All right.
So you have a history of acquisitions. You were CTO at Arrival Guys, which sold to Lonely Planet, founder and CEO at Table Finder, which was acquired by Visit. You've done the acquisition thing a couple times. So when did the acquisition of ProLeads happen with Outbound Works?
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Chapter 2: What led to the acquisition of ProLeads by Outbound Works?
How many? I think it was around 20 or so.
Okay, and are you talking about, it's B-R-I-S-K? Yes. Okay, got it. And what did the extension do?
It was connected to Salesforce and helped the sales reps directly interact better with their Salesforce, as well as do a bunch of automation on other websites that they were on. which is why we wanted to have it. Previously, we had been this one platform that just did one thing. We were just talking about the personalization of emails and so on, but now we... Sorry, are you still there?
Yeah.
Yeah, it froze up a little bit. We were talking a lot about how... One second, we just need to move this.
Yeah, sorry, just so we, because we have a short amount of time here. So 2017, 200K in ARR, somewhere you bring in the new co-founder, you spent 100 grand to 300 grand to acquire a Chrome extension that connected to Salesforce. How much did that impact your cash balance in the bank at the time? I mean, was that a significant portion of what you had left?
We actually did an additional fundraise at that point. How much? We joined the Alchemist Accelerator, and we got in an extra, I think it was 150, 200, something like that. I can't remember exactly the exact numbers. But we got into the Alchemist Accelerator, which is a prominent B2B accelerator, and that's what we... focused a lot of the development and we had a lot of good growth.
So Anders, just to be clear, when you did the acquisition and you spent 100 grand or 300 grand, about what percent of your total cash on hand was spent on that acquisition? 50%, 100%?
It was not, no, we didn't spend a lot of cash on that. There was a lot of, a lot of the investment was made with, with the stock as well.
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Chapter 3: What challenges did ProLeads face before the acquisition?
It's been a lot of water under the bridge since then. I don't remember. It was early 2018 that we sold. Okay. It was in February 2018.
Okay. Well, if you were flat in 2017 and you said you started 2017 with about $200,000 in ARR, you were somewhere in that $200,000 range. Yeah. So how did you have the acquisition talks? I mean, was it based off a revenue multiple or some other factor?
Oh, wait. When you said $200,000, was that monthly or yearly? So we were...
You told me when you came on in January 3rd of 2017 that you had 100 customers paying on average $150 per month, which would put you at $180,000 in ARR, annual revenue, at the beginning of 2017. You told me earlier you were flat in 2017. So if you're flat, that means you're still doing about $180,000 per year in terms of run rate at the end of the year. Is that accurate?
That does sound very low, though. We were closer to a million ARR. Oh, no, wait. Sorry, I should have prepared a little bit better for this. Let's just say that we were somewhere in the $200,000 to $500,000 ARR.
Fair enough. ARR, not monthly revenue. ARR, annual revenue.
ARR, yes.
Yeah, which means you were doing between $160,000 a month and maybe $300,000 a month, something like that. Sorry, sorry. Not that much. Sorry. You were doing $200,000 per year or up to $500,000 per year, which would have been something between... Up to like $40,000 a month. Yeah, 20 to 50K per month, something like that. Yeah, yeah.
Okay, so, but my point in asking that question is, what was the acquisition tied to? Was it a traditional kind of revenue multiple or something different?
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Chapter 4: How did the guest's product evolve leading up to the sale?
Guys, there you have it. Pro leads founded back many years ago, call it 2014, uh, grew, grew it to about between 200 and $400,000, sorry, 200 and $250,000 per month. It's per year, sorry. And revenue.
Then, uh, in 2018, after beer at dream force ended up selling that company for a cash plus stock deal to outbound works for something or caught between 1.5 and four ish million dollars in that range. Uh, then put it in an outbound works. That company was then acquired here recently. Uh, We don't know who acquired them, but we know what happened.
Anders is sticking on though in the meantime as he looks to scale in the space serving and helping sales teams get more leads, drive the race car better, make their demos go better, and ideally close more bookings and revenue. Anders, thank you for taking us to the top. Thank you.