How Collective Hub CEO Hooman Radfar grew Collective Hub to $13M revenue and 2K customers in 2024.

guys he had a nice success learned a lot growing at this exiting to Oracle for a report over 200 million bucks then took a break at another company eventually said you know what this one man business is the new way to build a company in America profitable three million four million bucks in revenue is the way to go he saw an opportunity launchcollective.com in 2020 they're now getting thousands of applicants every month very clear pricing at 300 bucks a month or a slight discount 15 if you pay up front he said quote they've got thousands of customers today caught between one thousand and ten thousand they've grown using outside Capital seven million seed Rays back in 2020 sold around 15 to 20 of the company then raised a 20 series a and a 25 million dollar call it note right extension on the a we'll see what happens next they look to grow and scale out new pricing plans and continue serving these one-man businesses hey folks my guest today is human radfari is a Serial entrepreneur and the co-founder and CEO of collective the first all-in-one Financial platform designed for businesses of one he previously started to add this which was acquired by Oracle was a founding partner at xbud as an early investor in Uber sweet green Convoy and more who won you ready to take us to the top let's go all right so real quick again when was that Oracle acquired at this right correct what year was that uh the acquisition I believe uh was done in 2015 and I want to say it closed the beginning of 2016. okay so did you go right into Collective after that or you take a break no actually so I was an expert at the time and uh I was very lucky so I didn't uh have to join the rest of my team at Oracle oh interesting now TechCrunch reported the cut line was Oracle by his audience tracking from address for around 200 million bucks so you can really I assume do whatever you want it's good money it's not Fu money you don't have a private jet but is that generally accurate I'm doing okay I'm doing okay I'm really I'm really grateful for it that's great okay I guess looking back there's a lot of funders on right now in a recession they're all considering selling is just based off what you went through to add this any advice you'd give them on running the process of exiting yeah I think honestly I mean this is a longer discussion but my you know tldr advice is you never really want to sell your company you want your company to get bought and uh I know that's a tough thing to say but in our case it had this you know oracle had partnered with us across I think three different opportunities and then they've concluded as a result of those Partnerships that it was more cost effective for them to you know buy us and I think that drove a better outcome when you drive a process to sell your company typically there's a banker involved and it's almost like a more auction stop process and so when you just look at the math behind that you don't often get that how can you run now of course if you're stuck in that situation it is what it is and so I would give a different set of advice but I guess my advice is don't sell if you if you can't uh if you can wait that's my advice and then I guess second question here are some of these folks that are listening right now maybe they are doing five million in Revenue but they've raised 2 million from VCS right and VCS all want a 10x which I mean they gotta sell for at least 20 million but these Founders are getting offers for 10 million which they'd still like to take there's obviously a balance you have to do there you I believe will do the same thing you guys raise 73.2 million and add this if you did sell for around 200 you had to do some kind of management with the VCS because not everyone was getting a 10x how should Founders thinking about that today managing their VC specifically think about it yeah I think ultimately it's a conversation and most VCS now in particular are um more founder-friendly they of course their first customer they have to make sure that they're returning their fund and and their LPS are doing okay but you know while VCS do want to get call it that proverbial 10x it's a portfolio right so every company doesn't need to get that 10x so if a Founder you know is emphatic and convinced that the best strategy is to sell and ultimately the VC is getting a positive outcome you typically can get that to happen um and you know more often than not the VCS tend to be aligned yep all right let's get into let's go get back into Collective here so what is collective today describe your customer who's using you so you mentioned we call them businesses of one that's a term we coined because when we first started uh we called everyone Freelancers and uh maybe obviously uh some people don't self-identify as that as an example my parents they were both psychiatrists they were both business of one I don't think they would consider themselves Freelancers Realtors and whatnot so we we want to work with anyone who's really hanging up a shingle on their own uh as solo and and you know that's 36 of the workforce so it's a fairly large uh percentage of the population 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 the 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 evaluation 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 evaluations inside of your founder 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 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 raise they sold 22 percent of 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 valuation than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna 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 valuations or if you go to founderpath.com and hover over products click on get your valuation 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 how far away from way when somebody takes a company public and there's only one full-time employee the true business of one you know it's actually a really great question um I haven't thought about it but I know that there are folks that have uh you know when Instagram sold there was a lot of questions around the um exit value per employee because I believe Instagram was like sub 40 or something like that and they sold for a billion dollars and so that's become you know a number to track and it's interesting um I don't know I guess with AI That's there there's that possibility to be honest right so obviously there's a lot of counters that don't realize how big you can get with a with an army of contractors and you you have you see this data firsthand you're sitting on it so you can look in your database and go wow these guys I mean you're not going to name them obviously we can say wow these guys are doing 10 million there's only two ftes it's amazing yeah so I will say I have especially as an operator been overwhelmed and impressed by the scrappiness of some of these folks you know I think you know one of my great passions is being a Founder helping Founders and oftentimes I think there's a cognitive bias in the Venture Community to assume that Venture back Founders are like the you know top one percent right honestly I think these Founders are more impressive in many ways like my mom for example sharing her business for 30 years she was profitable the whole time never raised a dollar right now granted the scale of it is smaller but to your point if you have contractors and you're you know just doing ftas you can go pretty far and again I I don't want to...