How Cake Equity CEO Kim Hansen grew Cake Equity to $3.8M revenue and 650 customers in 2024.

hey folks my guest today is kim hansen he's a he wants a world where everyone is free to be creative and as a healthy human being they were born to be he's a serial entrepreneur innovative company leader mentor startup advisor social community manager among many other things including a mountain biker he's now building a company called cake equity.com it's a cap table management platform for startup founders kim you ready to take us to the top absolutely excited all right did you have like a horror story from one of your first startups in the cap table or what what happened yeah definitely it was it has been a tough journey with with equity personally first it was hard to get access to to invest in the companies i wanted to get access to before i was associated investor and secondly my other company i i thought i was i was early so i could kind of push a bit and get ownership in that but i couldn't give ownership to all my other employees as we grew the company and that was a big pain i tried for two years but it was just too complicated and and painful why was that painful so like here in the states obviously you would have an employee stock option plan you would issue shares accordingly we have carter to manage that did you nothing like that existed where you where you are it was some years back at the time i was in portugal building a team there and it was um you know the maturity wasn't there at all in regards to the cap table management and equity and all of that so especially from from cfos at that time it it was just too complicated with tax and all of that you know as you're building a company you have so many challenges understanding the value of using options to to empower and motivate your team wasn't quite there so there wasn't enough understanding of the problem um and as maybe some of us are looking to to silicon valley as inspiration at the time um you know and saying this this is really awesome this tool um as we're building value this could be very valuable uh later on and you know who's gonna who's gonna participate in in uh getting getting a return in that in that value created so now focused on this capital management for startups what's the start what's an average startup paying you per month or per year to use your technology yeah it's we have around they pay a 100 australian dollars for kind of uh average uh our package is is split in in the kind of early startups uh kind of the ones that are uh in that product market fit growth um place and then for kind of later stage um so but but yeah we're really targeting those that have uh that have already got some funding and they're in that really space where they're they have too many things to do and they're growing and they need their cap table to really work well for them and it's super challenging to learn fast so just to be clear on average though these customers are paying something like 100 australian dollars a month or 70 usd per month yeah and what do you upsell against is it dollars of funding raised number of employees managed size of esop pool something else yeah so we have a freemium up to five stakeholders as we call them which is a combination of employees or investors and advisors that are using the equity after that from six and upwards we have different cohorts that you pay as you go as you grow the company i see okay and what's the back story here when did you launch the business yeah we we actually started as a smart kind of blockchain company uh as we wanted to to really we're passionate about creating more liquidity in the private equity space and we saw opportunities in the blockchain space but um we we saw that there was an underserved demand in in australia for cap table management there was nothing here and there was a lot of companies needing that so we kind of pivoted into to like um building the cap table solution also because in the blockchain space nobody was kind of solving the legal and compliance and all of those things which you actually have to solve before you put the platform the infrastructure for equity transactions in place so um yeah we we started with the cap table uh platform and um yeah it's been great what year when did you launch that sorry that's um so cake uh was kind of like three three years ago uh okay so called 29 2018 2019 something like that oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview very cool and have you bootstrapped the company or did you decide to raise no we had a family and friends and fools initial race in the blockchain then we pivoted into cake and then we had a precede round and a seat round last year um now we're going into a pre-series a round okay very cool so break those down for me how much did you raise in the precede um that was that was around five hundred thousand five hundred dollars australian dollars so got it so that would have been something like 450 000 usd something like that 400 usd okay and what why did you need the i mean you know dilution very well right why did you need to raise that capital to build a platform especially it sounds like you've had some exits under your belt why not just self-fund it keep 100 yeah i think we were definitely also naive at the time as i think many founders are in regards to equity and understanding how to use it well um so and it was it was a bit of an opportunity also to to get put a team together which was is really difficult in australia to to bootstrap i i came from i've been living in portugal for more than 15 years where it's quite cheap to bootstrap with people but in australia the salaries are quite high so to kind of get kick-started a bit with the team we we needed some funds i see i see okay so you raised 500 000 early 2021 pre-seed round then you did a seed round for how much yeah around 1 million okay so 1.5 million sort of total raised last year and most folks in their seed they're saying you know 15 20 percent of the business is that about what you sold so we we actually had so we had the initial round um and then we actually had three rounds so far 500k 1 million and last year we raised three million um with uh jason calacanis and ram percent uh coming in on board rampant is uh an awesome australian bc here and you probably are familiar with jason calacanis and his um his book about angel investing and his fantastic big launch syndicate of angel investors okay got it so before last year you'd raised a million and two tranches call those your two pre-seed rounds i needed a formal seed last year for three million yeah that's it okay sold between sort of fifteen twenty percent pretty standard yeah exactly okay okay very cool so that would be what is that that'd be like a fifteen three million on like a fifteen you know million dollar pre-money evaluation something like that see 10 million pre pre-money okay that's that's fair and and um and...