How Compt CEO Amy Spurling grew Compt to $2.9M revenue and 45 customers in 2024.

hello everyone my guest today is amy sperling she's the co-founder and ceo of compt which gives companies the ability to personalize their perks programs named boston ceo of the year by boston business journal in 2016 she's a serial entrepreneur and a seasoned executive with over 15 years experience in leadership roles at venture back companies where she's helped raise over 10 rounds of financing totaling north of 200 million dollars to manage two acquisitions to close amy you're ready to take us to the top absolutely let's do it all right 200 million dollars raised that means you know a little bit about dilution uh i know what it it yes a little bit uh it doesn't mean everything that everybody thinks it means right so it's you know you can own a little piece of a really expensive pie and that can be awesome too i know one of my things i am so my pet peeves right now is i i hate seeing all these super talented founders right they go up they find the ipo and it's like you look at the last 24 sas ipo they own like six percent of their company it's like you have to manage dilution like in a smart way so anyways we'll dive into that maybe a bit later let's get more on you first so what does comp do and what's the revenue model how do you make money sure so we are a perk management system that is the only way to completely personalize your employees lifestyle benefits the concept being that everyone wants to need something different and this is a way to actually do that whereas the system right now is random perk vendors that you would bring in that would do yoga or you know a fitness app or whatever so this allows for democratization of that so just be clear we're not talking like health care options we're talking like uh is it gonna be a trail mix bar or fruit snacks for the lunch perk on friday it's more like do you want do you think health and wellness means the gym or do you think it means hiking boots or do you think it means a mental health app oh i see okay got it okay cool that's helpful understand pricing-wise so how do you price this thing is it pure sass it is a sas model it works out to be about four bucks per employee per month uh hr and finance hate the pe pm model uh it's kind of a pet peeve of the my kind of cohort of people and so it's tiered pricing so it backs into that but it's a fixed price so that they know what they're getting so you mean specifically they hate this because it's essentially variable billing they don't know how to forecast this correctly and they're having to audit the bills they brought in two people four exited like it's just it's not a lot of fun so when you look at your current user base your you know your your that's i was gonna say active users let's just say your entire user base what would you say the average team sizes we talking 10 people a thousand people 10 000 people so it's interesting we've tested i've been testing out a bit different go to markets uh we started so we started selling january of or started putting people on the platform january of 2018. so we did an alpha with five companies they were sub 25 person companies so it was free i just get them to use it learn from them uh we ran that for 12 weeks did a 10 company beta starting in june uh that was a low very low price point just to prove somebody would pay for the thing and those were sub 50 person companies okay just to test out functionality and what we're doing so that was you know we had 15 companies at that point we now have 20 companies on the platform we force churned three companies at the end of beta so we've sold you know uh seven eight companies at this point uh and they're moving up market what we've seen is that while this is applicable to any company that is competing for labor and the best talent and trying to retain them the the pain point really hits an inflection point especially around the 100 to 500 person companies and then we've got a ton of inbound leads that are coming from the 1 000 to 5 000 companies so we're moving up market but that's a longer sales cycle january 2018 was the beta you charge something just to prove people pay for it you put 15 people in that you're saying you force churned you know some portion of those so you have eight customers you're serving today is that accurate uh no alpha was in january beta was last june we forced churn three companies we've got 20 companies 21 companies on the platform now uh so and you know six of them are paying full price i see i see okay got it so and what you're saying is though your suites are moving forward is gonna be that inflection point north of 100 employees exactly okay so a lot so we have a bunch of companies that are customers now that are not that that target market and so we're shifting a market got it yep fairly fairly standard in sas um where are you getting these leads from what's your outbound or inbound look like uh it's all inbound so my co-founder sarah bedrick i came out of hubspot she's a marketing guru she can do magic with a very small budget uh and so we've been testing out the approach because selling into hr is its own kind of animal right and the the things that work when you're marketing marketing software don't work when you're trying to sell into hr it's a very different industry and so it's a lot of content it's a lot of driving conversation around the things that matter to hr and we've had tremendous results from that and so i mean can i can i take you know a hundred as your target kind of team size times that four dollar mark i mean these customers are paying an hour like 400 500 bucks a month something like that that's that's kind of the entry point what we're really seeing is like our pipeline so to give you a sense i was selling kind of the first cohort of folks so the people who came on january february quickly realized i need an actual real salesperson brought in uh a gentleman onto our team that i worked with previously he took our pipeline from when i handed it over it was about 200 000 in arr in four months that's turned into 2.3 million in arr so vastly different pipeline huge tremendous growth in the pipeline a lot of that is much much bigger customer so you're looking at anywhere from the 1000 to 10 000 companies because they've got distributed teams they're trying to do consistency of benefits and so really trying to drive that up market so that you're looking at much more of a you know 100 to 250 000 a year average contract value yeah and that's where you're headed i just want to make sure i don't we don't gloss over your story right how you the progression you've got to get there so historically when you look at your current base though it's kind of more in that call it you know yeah yeah yeah five to like 20 thousand dollar kind of acv has now gone up to like hundred thousand two hundred thousand totally makes a lot of sense what's the team look like today how many folks seven people uh so three on the engineering side i had marketing head of sales myself and uh a junior marketer that's great and now back to the dilution question have you guys raised or stayed bootstrapped uh so it's a hybrid i had one of my companies i had a great exit which allowed me to bootstrap some of the the company uh we did do an angel round that um my money came in as part of last year we're working on our seed round now uh with we're we're pretty close to to closing on that okay what was it can you share what was the angel around how much end to date uh so seven seven or seven fifty i'd have to look um okay and that was on a safer note or what it was on a safe yep okay seventh and then this seed will be priced yep seeds price what and so what i mean again you're no stranger to dilution you know how it works right the longer you put off raising obviously the better why is now the right time to raise a seed and how do you make sure you don't get you know diluted out the wazoo i mean so one you need to trigger you're safe you don't want to go too far down that path you get massive dilution because you've got this safe that's hanging out there that's going to get triggered at your next round so if you wait too long you actually lose a ton of your company for people who didn't put much in so you actually want to trigger that for a price round uh and two it is running that balance of making sure you don't raise too much but that you can grow appropriately we need capital to be able to grow and so and be able to i kind of push further into the market and so bootstrapping that we're gonna end up missing the market window uh we need to we need to move faster yeah so i mean what's the right amount to raise right now you think and a range is fine it sounds like you're still negotiating yeah i mean i think somewhere in the million and a half to million range is the appropriate size to raise right now okay interesting on the seed and then like look in order to drive growth obviously you trigger your burn rates based off different hiring needs and things like that right so when you raise today in the back your head how many months are you trying to plan for in terms of burn coverage like or runway and somewhere in the i mean there's there's flexibility in that...