SaaS Interviews with CEOs, Startups, Founders
How He Did $100m Secondary but also raised cash to buy a $5m+ ARR Competitor
08 Aug 2022
Chapter 1: What is the main topic discussed in this episode?
2,500 customers paying $5,000 ACVs, you were at a $24 million run rate then. And if you added eScribe revenue on top of that, you've got to be probably either flirting with or past 30 million at this point. Is that accurate?
That is accurate.
And
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Prune Shada.
He is the founder of onboardmeetings.com. He's doing this to inspire and enable the best board meeting experience possible and finding technology solutions to empower that. All right, Prune, you ready to take us to the top? Absolutely. Let's have at it. All right. Now, a lot of people, maybe they haven't raised VC. They don't even know what it's like to manage a board.
Why is managing a board meeting hard?
Great question. You know, I like to say that there is often a board meeting that you have in mind based on your agenda and the pre-board meeting discussions. Then there's an actual board meeting that you end up having. And then two days after the board meeting, you realize there's a whole different board meeting that you should have had.
And this emotion is true for all CEOs every time I've checked. And board meetings are hard because they're structured meeting There's a lot of prep that goes into it. And right before the board meeting, you are clearest about your business. This is what's going well and what's not. And there's new topics to be introduced and they often show up.
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Chapter 2: Why is managing a board meeting hard?
Then there was a team that was trying to get into the US market. We are, of course, well-entrenched in a couple hundred people working in different cities here in the US. So we can bring e-scribe product to the US market and we've had tremendous success with that. I'm sitting here in Laguna Beach in California and we just signed up Laguna Beach as a customer two weeks ago.
So lots of synergies and market expansion, some access to talent, and then certainly rounding out our portfolio in terms of covering all meetings. So public meetings, you know, these are the public sector meetings, I should say. And then through onboard, you know, we are also, of course, doing private boards and then publicly listed companies and then also nonprofits.
And when you made the purchase of eScribe, how many customers did they have at the time?
They had about 400 customers and change.
Oh, 400. I mean, so 400 times a $20,000 ACV. I mean, they were like 5, 6, 8 million in revenue, something like that.
Yeah, I know. I would say, you know, just short of that, but yeah, that was sort of the revenue range. You know, they were in the 5 to 10 million range. I don't know the exact specific number this time, but yeah.
When did you close the transaction?
So, you know, since we last spoke, we raised money and then we actually really did this transaction around August, September. So we are closing in on one year anniversary of that. And then we also actually divested. There was a divestiture that happened. There was an intranet business that I started long ago called Ensemble.
So we sold that off towards the end of the year just because it had become slightly off-center compared to where we were headed. What was that called? It was called Ensemble.
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Chapter 3: How has the customer base grown since the last interview?
I see. I see. Okay. I mean, can you, without getting into trouble here, I mean, less than 50% of the $100 million was secondary?
Less than 50, yes. And this is a pretty significant transaction. We had looked at this transaction while we were raising money. We kind of knew that we were in due diligence with this team. So this was sort of one of the drivers if you will. So this gives us a chance to expand into a big market in terms of talent, Toronto.
Then it also actually allows us to be full spectrum, all kinds of board meetings, like I summarized. And then it also gives us a chance to actually expand quickly. Remember, last year, we were still in COVID times, which means if you had to add 30, 40, 50 people, it's extremely hard to you know, recruit people while you're all remote.
So this was a good chance to find a team that can actually help us bulk up quickly since we were seeing, you know, tremendous growth overall.
What month did you close the eScribe deal?
eScribe deal was August, you know, so it's coming up actually.
That was still the hot, hot, hot time. The market hadn't crashed yet. What revenue multiple did you pay for the business?
You know, I don't know if I can actually, you know, share the revenue multiple, but I say actually, you know, There was some, I would say, similar multiples. That market was actually really 10 to 15x sort of multiples. It was a good market.
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Chapter 4: What was the significance of the eScribe acquisition?
And then we got ensemble sort of packaged and off-to-end contracts also in the same timeframe. And now we are seeing actually really sort of, you know, first year anniversary of raising money and doing these transactions, all of that come through. We're seeing our growth rates sort of justify all of that. While the valuations were, you know, crazy in the Valley.
Remember, I was in the Midwest, you know, still raising money from there. And I was conscious of finding the right partner, not the one who's giving us the highest multiple, but the one who had the best chance of getting us to, Sort of where I think would be the right spot for this business.
Yep. Now, a lot of times when you're doing a deal like this, the team has 58 people. Was eScribe bootstrapped or was there VCs to negotiate with?
Oh, it was actually really some angels, but it was bootstrapped. Yeah, largely bootstrapped.
So very capital efficient. That's great. Was the majority of the deal all cash or do they now have a bunch of stock and onboard?
No, I think the employees actually, they all rolled. they were the core group and actually really sort of in a deeper L1, L2s were vested and they got a chance to roll here. And some of them cashed out because they've been invested for a long time. I really like these transactions, especially when I think about
Being somebody who started a bootstrap business too, you can only hold on to all of that for 5, 10, 15 years while everybody else around you is actually either working for big tech where they're making big dollars every year or they're seeing these short-run startup cycles. This is a great chance to stay in the same business, stay on the same mission while you get to take some chips off.
So we saw a little bit of that in this transaction as well.
But you don't want them to take too many chips off because you want them to be incentivized to stick around and build the now combined business together.
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