How AgentRisk CEO Jon Vlachogiannis grew AgentRisk to $518K revenue and 23 customers in 2023.

you're gonna love this interview just got done editing it i'm glad i got it live for you i'll be in the comments for the next 30 minutes hanging out answering any questions you have in fact leave a comment below about data points or what you think is going to happen to the company and i will respond to every comment additionally if you're just loving the content click the thumbs up and i will go and check out your profile as well and give your videos some love as well in the meantime enjoy the interview hello everyone my guest today is john vlacio giannis he's a serial entrepreneur this is his third startup got acquired for a 17x return to investors on his first company he loves making companies with a little bit of funding tons of freedom in small teams he's an active angel investor organizer of many tech meetups in la and still writes code on his current company agentrisk.com where they let machine learning manage their investments so they can keep building cool stuff john you ready to take it to the top of course yeah all right so first off what was the third startup that you sold so the name was backsense we were doing mobile aero reporting and analytics okay so this plays in kind of the rainforest qa space sauce lab space this kind of automated testing it was mostly aero reporting like when your application was crossing we had an sdk that was collecting data and sending it back to the developers i see okay very good so that company what did you sell it uh we sold it for a 17x the public company that acquired us never disclosed the actual money but the whole team made some pretty good what what year was that when did you sell it uh 98 2014 2014. okay and you had me how much did the did your company raise before you sold that's a very interesting question we only raised one hundred thousand dollars okay so when you say that your startup got a 17x return to your investors that's pretty easy when you only raise a hundred thousand dollars right you've just got to return 1.7 million great return by the way not undercutting you great return but but doesn't necessarily mean that you got really rich from that uh how did you manage you and your your you know your founding team your early employees getting liquidity uh so it was it wasn't that easy because we only gave 10 to the original investors they only put 100k and then we broke even after i think six to seven months so ninety percent of the company was was to us to the founders or to the to the you know to the engineers how many founders were there we were two founders and we were in total nine engineers so the whole team was like 11 people okay so 11 people total and again if you raised 100k and got your investors a 17x return that means their 10 portion of the company they got 1.7 million back from which would imply a sale price of something like 17 million total uh is that basically right yep yep very good so why you should be on a cruise ship somewhere relaxing doing nothing right why not go take a long sabbatical why jump back into the startup space so i went and worked for the company that acquired us for like three and a half years and it was amazing because it was in silicon valley and everything but i got super bored i wanted to build something new so this was splunk by the way right that acquired you oh exactly yes this was planned uh so i got a little bit bored and i decided to do another company sadly i cannot sit in one place and do nothing so i have to keep building stuff that's so funny okay so when did you launch agent risk officially we wrote we started beta testing it in 2015 like with uh some friends of ours and previous investors and we launched it in 2018 like we opened it to the public okay so you write the first line of code in 2015 when did you get your first paying customer the first paying customer 2018 yeah okay got it so 2015. okay so you did three years or how much money did you guys think in the company before you got your first dollar revenue uh because we were doing it mostly part time let's say that nobody was getting paid so i just put like 10k to start the company to do through all the legalities because the thing with with investment is that you have to be regulated so i had to pass the exams i'm a registered financial advisor that took a lot of a lot of time then we had fire the compliance officer through the first two or three years you need a track record in the investment business they don't care if you're a successful entrepreneur they need a track record so what was the number about how much did you guys invest uh originally we started with 10k we put another 50k and then we had the previous investors putting more money and currently we raised more than a million dollars okay but again between 2015 and 2018 how much capital did you spend ten thousand dollars yeah okay how do you support a team over three years with just ten thousand dollars going out got a very successful exits as i said well that doesn't that well that doesn't mean anyone gets money i mean when you hire new employees in the new company they don't get any of that money so we didn't have any new any new employees so the employees from the previous company most of them came to the new company so we they knew that hey we had a successful exit let's keep doing it okay did you have to pay you must have had to pay to go get your broker's license and put yourself through all these tests um no you don't need a broker license we're an investment company so you only need the investment advisor's license and with 10k you can you just you just need to study and just okay so you filed tax returns in 2015 2016 up through 2018. you're telling me if i go look at those tax returns i'm only going to see across all those years a total of 10 000 of money spent yep okay uh then fast forward today you said you raised a million dollars total uh-huh okay and what are so break down kind of like what a customer pays for so can you talk about a customer that's paying you right now of course so a customer he only pays the fee a one percent fee of assets under management he doesn't need to spend anything else okay and give me an example of a customer uh usually customers are from uh silicon valley there are successful entrepreneurs that have also a successful exit or a very successful business and they don't like the traditional wealth managers and they want something like is backed by quantitative mathematics by quantitative finance mathematics and machine learning so john i mean are you replacing family offices or like charles swab so family office is no trustworthy okay got it so how many how many individuals have you know have at least called a million dollars with you how many customers you have so currently we have more than 23 customers okay we started uh acquiring customers beginning of 2019 like promoting the service and we also started the b2b service to offer our services to other wealth managers and financial advisors okay what makes you more but they all pay just one percent of aum yep okay so and there's 23 how many of those 23 are directly wealthy individuals versus someone else you've licensed the tech to uh no no these 23 are only the b2c i'm only there actually yeah so you don't have any b2b customers yet we have five but are in the beta version of the product the product is still in like heavy development ignoring all the beta stuff across these 23 folks what's your total aum as a company currently totally um i think is around 25 27 million okay so 27 million and uh so i mean obviously you can take one percent of that's 270 000 that you guys make annually okay so i mean how do you scale this you need to get up to like you know billions in a um and not really because as i said our teams are extremely extremely small and efficient so currently the team is uh has eight people and our break-even points is i think around 100 million which if you do the calculations which i'm pretty sure you're doing right now it's when you say break even so how much are you burning today per month currently we're br we are burning 23 000 okay i mean so not horrible uh you when did you raise that million um like six months ago yeah so you have you have cash you have plenty of runway right yeah yeah now did you have to set up a board when you raise that money um no because the money were raised by previous investors and from customers customers that love the service and like hey i want to put some money in the company okay got it uh what's the team today so eight people how many are engineers uh seven of them are engineers and one compliance officer okay so no one doing sales nope so how are you getting customers today uh through word of mouth and the founders me and alex are doing the sales you know the hand holding and all stuff like that but we don't have an official sales team and the previous company never had the sales team either and we had 40 000 customers in the company that got acquired so i strongly believe in small teams very efficient with a huge sas presence i don't like like the sales that last company though what was the average price point that customers paid per month so the average price point per month it was uh like three thousand dollars something like that and we had plans starting from nineteen thousand dollars so you had forty thousand customers paying three thousand a month yep okay that doesn't make...