How Wistia Reached $40M Revenue After Betting the Company on $17.3M of Debt
Three acquirers came knocking at once, a growth round was forming — and Chris Savage realized the company he'd rebuild after selling Wistia was Wistia. So he borrowed $17.3M, tendered his investors at 20x, and turned profit into the strategy.
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In 2017, three companies tried to buy Wistia at the same time. “People have pinged us over the years,” Chris Savage told Nathan, “but never have we had three companies at once.” The video-marketing platform was at an $18M run rate, built on just $1.4M of angel money — $650K raised in 2008 when MRR was literally $1,500, and about $800K more in 2010. A growth round was forming in parallel; the advice machine wanted him to raise $40M.
What forced the real decision was a thought experiment. If they sold, Savage and co-founder Brendan Schwartz would work out their earnouts, leave, and — after eleven years together — start another company. They sketched it: SMB space, strong brand, video. “We saw the business we were going to try to rebuild… and we were like, why do we need to rebuild it?”
Admitting the throttle was the problem
Underneath sat a confession the industry rarely tapes: they were unhappy, and the reason was growth-at-all-costs. Wistia had been profitable and customer-funded; then, on the standard advice that profitability means under-investing, they “threw the throttle down” — heavy hiring, heavy advertising, losing $250–300K a month, watching runway shrink from “living forever” toward seven months. “It made the company incredibly short-term focused… we couldn’t even execute on the long-term ideas.”
The real crossroads of 2017 wasn’t sell-versus-raise. It was: who runs this company — the founders’ conviction, or everyone else’s playbook?
The $17.3M third door
They chose neither offer. Instead — June 2017 to October 2017, idea to signed terms — Wistia raised $17.3M of debt from Accel-KKR and ran a tender offer at identical terms for everyone: angels and employees alike could sell as much or as little as they wanted, at roughly 20x the old rounds’ prices. The mechanics Savage disclosed are a masterclass in cap-table surgery: the angels’ preferred shares (with blocking rights) were voted into common as the price of liquidity; about 40% of the angel money actually sold — several investors insisted on riding along — and roughly $12M went to investors with the rest to early employees’ options. The terms of the debt itself:
Priced without a profit history — “we were like infinite EBITDA when we started talking.” Refinanced within a year at less than half the rate.
Principal payments deferred while the company flipped from burn to profit.
Minimum cash, revenue floors, and a leverage ratio modeled to fall from “infinite” to bankable within 18 months.
Then the machine flipped. EBITDA went from −$500K in 2017 to +$6M in 2018, the loan was refinanced within a year at “less than half” the rate with an ordinary bank, and Savage’s summary earned its place in the canon.
It’s almost like the debt forced us to be profitable, and that forced us to be long-term focused — the opposite of everything I’d been told.
Chris Savage, co-founder & CEO, Wistia
(The general mechanics of deals like this are in our venture debt guide, with Wistia as its boldest case.)
Profit sharing, and the three points of gross margin
With no exit on the table, Wistia introduced profit sharing in 2018 — 10% of EBITDA, split by salary — and Savage’s favorite result was cultural. The first open-book financial review after the change, half the hands in the room went up: why do we have the extra office? Then an infrastructure team volunteered, unprompted, to attack video delivery costs and came back with three points of gross margin. “People don’t understand equity,” Savage concluded. “They understand profit.”
By the December 2019 interview the bet had fully paid: revenue “right past” $40M — more than double the 2017 run rate — with over 50,000 customers, 115 employees, 16 quota-carrying reps, and CAC payback still disciplined around a year. The GetLatka dataset carries the line onward: $49M by early 2021, and $67M by the end of 2023 — still independent, still compounding, seventeen years in.
Current data lives on Wistia’s GetLatka profile; the full December 2019 conversation is here.
His answer to the closing question reads differently from a founder who reinvented his own cap table: “My 20-year-old self wanted to reinvent absolutely everything… Chris, you were wrong — a bunch of things are just the same in building a business. Being more open to that would have caused less pain.” The one thing he didn’t accept as given — that growth must be bought with control — turned out to be the reinvention worth making.
