How CyberSmart CEO Jamie Akhtar grew CyberSmart to $16.2M revenue with a 67 person team in 2024.

spoiler alert that's about svb so we're going to Dive Right In by a little bit of context a little bit background on myself and cybersmart about what we do so my backgrounds in technology is cyber spent the last 15 years I have a Building Technology products running Tech teams or helping companies do all the great stuff around data protection from technical security all the way up to the government's risk and compliance peace and like most Founders the reason we started cyber smart was because the amount of pain and frustration we saw when it came to our customers the people who are working with day in day out and we just needed to solve this problem what we do at cybersmart is really focus on how smes can be enabled by cyber security so it's a really difficult challenge because most smes are not really aware of the the risks they face or how best to approach them so what we do is we build a unified platform for small businesses to basically tackle this so our mission is protecting Empower smes that's one of the main reasons why we wrote down the funding Venture route there's a lot of amazing companies I've spoken today okay that a bootstrapped I think that's a really really good way of solving a problem for us we think the problem the time is now um so I'm going to take you a little bit through that Journey our most recent series B which U.S terms it's probably a lowercase b because it's quite quite a small series B but as far as it was really about heading out milestones and getting the right investors so I'm going to talk through that as well so um setting a little bit of context so when I set the scene the last year has been really rough and as most of you know it's not going to get any better for the next 12 18 months when it comes to funding Market as well um so just going through some of those context pieces some of the ways we had to change how we're presenting ourselves and the approach we had when it came to fundraising as well then I want to kind of take you behind the scenes a little bit uh how we ran the deal process how we closed it and how we figured out what the right investor for us really looked like and then finally um two of the most important roles in your business as well how why we love founder path I'm going to touch on that too and finally some key lessons to wrap up so let's Dive In um so first bit I'm going to talk about is kind of that behind the scenes looking through that deal process too so last the last two years has really been a bit of a uh hell on Earth I guess for most most companies and one of the the key things for us as a company is always to look at these kind of inflection points that are happening outside the business and try and try and utilize those and see the Silver Lining so the pandemic was a massive shift in like how businesses work now being in cyber security this is a lot of Industries SAS has benefited usually from but essentially the move to remote work has really impacted everyone it's about the not only the benefits that businesses have been able to take on also the risk so every time this happened we sat the team down and said this is what's happening in the world um this is where the challenges that we face this is why it's going to be quite tough for us and this is what we're going to do about it and it's the same the same theme for our oldest um in a previous talk I did uh the founder 500 conference I really don't Dove more into these I'm gonna just kind of touch on them briefly yeah in terms of this but what we're now facing is this last phase which is the recession and that's going to reverberate for quite a long time so a lot of what we did was about like position ourselves in order to accomplish that when he got to fundraising so we kicked off the fundraising process um about January last year so about 15 months ago now obviously it was um it was not a good time it's not going any better since then but we were looking like what's our story like we're pitching VCS like tier one VCS how are we going to get how are we gonna get the cash our Revenue gross as you can see here looks a lot like some of the bootstrap companies but we had a lot of cash and we're burning a lot of cash like hundreds of thousands of dollars per month to achieve this kind of Revenue growth it's it's kind of average right so we had to really look at like where's our where's our where's our strength as a company what's the thing we're really nailing and what do we want to double down on and really for us it was about our unit economics so there's a a shift in our go-to-market that happened and actually we started to accelerate throughout last year which was a shift towards our partner channel so uh cyber smart self it sells into small businesses we had quite a few Partners so these are managed service providers so people managing 80 on behalf of other small businesses where it took us I'd say a good two years to really figure out how best to position the product to package it up to enable them like you know partners are like this amazing Channel um but they really do take a lot of time time and work to get get up and running once we figured that out we're able to basically double down on that so our unit economics our our customer acquisition cost lifetime value was 115 our net revenue retention was about 160 a year for partners and our gross retention was about 99 a month for about 86 a year so really really sticky customer base that we're able to essentially land and expand in so we called this model we called it a partner-led product growth model so we were Landing into partners and they were selling into their customers maybe one or two to start but 20 or 30 over time um so that's really what we focused our whole story on um when it came to finding out our ideal investor we really focused on an investor that understood the fundamentals of unit economics we spoke to one VC that said oh we don't look at companies that are not growing three or four x a year and I'm like who's growing three or four x a year right now that's crazy like we were in like 60 as you see on that previous slide right 60 70 yeah not three or four x um so this is when we started that process this is these are actual things that that VCS I picked said to me I pitched about 100 a hundred different VCS I'm I'm thinking like 200 250 300 meanings like two or three meetings a day is it was Savage I mean I was literally just sitting there my wife's sitting over there in the front row but she she like she can do my pitch off by heart right now because we sit like shoulder to shoulder on a little tiny desk in our flat one bedroom flat and like it was just continuous like uh trying to manage that deal flow so it's very much like a pipeline um so any sales process would go through this my favorite one's probably the one at the bottom which is like just like this was an actually an Austrian VC and they're like we just don't see the business cases like well you obviously don't see what we're trying to do here um but it's really tough I mean when you're going through this and it's just like set back after setback rejection after rejection and last year I don't think there's a single point in the entire year where we had more than three months Runway so throughout this process as well we had to make sure that we had cash in the bank and we're trying to keep the team on this journey as well so it was really tough and this that's basically how I felt I mean that emoji I think describes it pretty good um you feel like you're failing as a Founder you feel like your company's failing you feel really frustrated because you're like why doesn't anyone believe in me why is no one give me a chance you feel angry why didn't we do this why did we you know make these decisions to get to where we are but it's really really it can be quite a crushing crushing blow to you as a founder and I shared all this with the team I said this is this is what I'm going through this is why I need your support and I need you to really focus on hitting these numbers and maintaining good unit economics because we will get there it's just taking us a lot longer than we expected and this is me on one of course yet another presentation um just just basically like um we're still in through those but one important bit as well it's not just about like sitting on machine and firing meetings back to back like reflecting on what's working what's not um refining your your ideal investor as well and your pitch and your presentation is really important so usually I'd have someone jump on the cause as well they would just be listening and then after I say how did it go what was good what was bad what can we do better next time so build that iteration into your pitch cycle as well um so uh towards towards the end of last year I think this might be well obviously that's in the future but this is last year uh so Q3 things got really tight and I was like okay we've done Advanced subscription agreements or convertible notes with our existing investors raised a bunch of cash there um thankfully founder path came in and saved the day I'm touching that a little bit things are getting really tight and it's like this is where the center where we're at and this is actually from a team slide so every every quarter we run in all hands we get the company we're like 50 60 people right so there's 50 60 people depending on me to get this round closed do they have a future uh with the company um so try and focus on the positives try and tell them where where we're going and how things could work out um and this is really important I think when it's when you're going through these challenging times like keeping everyone behind you and supporting what it is you're trying to achieve and just reminding of that over and over again but not hiding the fact that that this is difficult um is super important as well um so we eventually did find our perfect match um what we were looking for so we had an ideal ideal investor profile if you can call it that was essentially a B2B SAS focused European fund uh we really want to double down on on what we're doing so we're based in the UK we really want to double down what we do in the UK maybe launch a couple of new markets but not North America um just yet so really finding someone understood the business what we're trying to achieve brought into our vision our ambition and realize that like the way we were going to scale this business um so we end up with four term sheets in the end um and it was really the the last one which took a lot of work uh I mean they said no two times and I kept going back to them every but you're perfect and they're like yeah but you just need to do that um you know like a lot of VCS do but I said if I do this will you commit to investing and said we'll see about it they never committed but in the end they did we got to where we need to get to um so why I would say on this is it's really important just keep keep searching for that ideal investor if you've got the wrong way to do it like don't settle for for second best um so section two I'm going to take you a little bit behind that deal deal process as well uh what I call climbing mountains in a snowstorm because it's kind of like you're really trying to push but you've got all these million other things happening in the business as well um so just three things right but this is actually probably the biggest takeaway from this whole presentation is the number one thing you have to focus on whether you're bootstrapped you're ready to venture or whatever model you're you're going if you're profitable just build a healthy business is number one it has to be number one like a lot of the times we get kind of wrapped up in the fundraising and and you know like I need to get to this point I need to hit this ARR number but unless you build a healthy business it's not going to scale it's going to come with a load of challenges you'll hire the wrong people because you're under pressure so really focus on that and then the second bit is just focusing your deal for for plan a um so really make sure you give that the time and the energy it needs like don't just do this as a side thing make sure you've got the team around you that you can basically Empower to deliver the business day to day I was probably spending 60 of my time on on this plan a so I really need the team around me to deliver on that the last bit which basically takes up every other waking hour of the day is the rest of the alphabet so that's plan a but the rest of it you need to have a plan b c d e like who you're going to go to if it doesn't work like what options do you have for cash flow whether it's your existing investors whether it's you cutting back on spend which is a really uh is definitely a real thing that you might need to consider or if it's accessing something like recovering Revenue Finance or Venture debt um so make sure you've got those plans in place early because you know by the time you'll need them it'll probably be too late for you to start putting them in place um so negotiation um so this is kind of one of the things we realized uh and actually is kind of The New Normal if you like although a lot of VCS are kind of repositioning the fact that uh the couple years proceeding last year were a blip and actually it's just returned back anyway timesheets are much less favorable now so I expect a lot of things in there if you see anti-dilution for example things like coupons as well it's basically investors just trying to protect from that downside risk um but one of the ones we we stayed clear from is liquidation preference like some funds were like pretty upfront they're like oh it's a 2X liquidation preference like okay well I don't think this is going to work for us like if they're not if they're not bought into what you're trying to do today like it's it's kind of like you're backpedaling from that point um so you can probably avoid that I don't I'm not 100 sure on how it look in the US but this is definitely saw from the UK um valuation matters um it really matters for you and your business and what that means for your future and the amount of capital you can raise as well but there are kind of ceilings in place like 2 20 50 I mean this is like later stage companies um earlier stages like you know it's a little bit more subjective but uh mid mid late stage companies there's definitely looks like there's some kind of ceilings there we've heard from a lot of people like the six to seven range was pretty standard um what you can do to control that is just grow your Top Line hard so if there's some measures there's some something you can pull in like whether it's an Enterprise sale or something that's slightly off the path of what you would typically do in order to boost your your ARR it'll get you a better valuation um not not long-term strategy but something you can do to basically convince to change that narrative and also try and price based on your year end so what your AR is going to be rather than what it is today uh and the last one as well just remember don't don't give up control I said I'd use the lasers you see there uh don't give up control um you are best place to see the ship if they try and like addition like you know six board seats or whatever everyone wants a board seat now um tell them they're going to get the same visibility you're going to get same input um you're gonna take the decisions because your best your best place to do that if you really need to if you're a later stage you might look like an independent or something but don't give a control as part of this I don't think you need to um the last bit in this section is about a small allocation so actually this is kind of like what our plan was on the left versus what actually transpired on the right so like we had like we we were planning to highlight 20 to 40 new people in the next 12 months when we set out we had our full financial model with a burn for all our cash in about 18 months or so um since then we've basically uh reverted to like a more step and see model so the the presentation we saw just before was this kind of hiring in line with your Revenue I think that's a really really smart way of doing it so when you're when you're testing you're experimenting with whether it's a product or a new market um or simply like adjusting your team see that that the results come through before you start hiring um as a presenter previously said that's going to be the biggest line on on your cost base so re really uh have a fine eye on that one um we were looking like 14 rebuilds we're just bringing you know more experienced people we're gonna start this new function that we've really wanted you know you speak to the engineers oh I need like six news developers so like that team rebuild is really really hard now so that there's a really tight labor market that's really expensive you've got recruitment fees you've got the time to get people up to speed what we've done instead is focus a lot on leveling up the people so like lots of Learning and Development coaching support professionally personally giving that opportunities to grow like really look at your current team and what you can do to get them to the next level um we wanted to do a bunch of new stuff like we're going to launch in like six new countries and we're gonna launch all these new products um we've really scaled back that and start to focus on like what what are those experiments you can run everyone as an MVP can we launch some some really early Alpha stage products can we do a lot more ux and partner research so we set up things like a partner Advisory Board which gives us a lot earlier insights rather than building stuff and shipping it and then the last last piece on here is like we're planning on building most of our Tech like we did today we're planning on maintaining that we've really shifted our focus and now we think about more in this lens which is like borrow sorry like is there an API is there a company that's building something similar that would kind of jam right into your stack it's a little bit of work but you allow allows you to test that that feature or that functionality for your customers without having to go and build the full thing thing out the other thing we started looking looking at and it's definitely something I encourage all the founders to do look at micro Acquisitions um so we use a platform called acquire.com used to call microacquire.com there's a bunch of platforms like this out there there's lots of companies there like less than 100K that can maybe add that killer feature that you are planning to build for like five to ten times that so buying buying Tech small Acquisitions can be quite helpful with that and then finally our last option is to build stuff um so the last bit um section three oh oh it's our time but um so two Sherpas there's two roles in your business and actually it's listening for to a lot of the presentations today I've heard these time and time again so the two most important people it's almost important roles are people in finance so people it's all about like doubling down on your team supporting them mentally emotionally professional development personal growth like really really investing in them is is going to be crucial for the next 18 months it was important before now it's like it's essential and the second one is finance so notice these are not like roles you're not going to go and hire like a CPO and a CFO and just give it give this problem this is a CEO level responsibilities you've got to make sure these two things are on track at all times um this image by the way random fact generated by AI I was like I want two Sherpas walking up a mountain in a snowstorm and I can't find on Google so Dali produced that pretty cool um last couple bits so uh debt financing uh and alternative finances so it's actually our proposal from svb uh that we got last year I think it was about March um but the strings attached here is like here we're going to give you like three to five million pounds pretty decent interest rate six and a half to eight percent but you need to close your funding round first like why do we want your money if we're going to close and get a load of money in the bank so it's kind of ah okay interesting anyway we spoke to to Nathan and the founder path team to actually end up giving us like one and a half million that was when we really really need and that Q3 crunch um super easy platform your login you select your customers click review they send you some paper you sign it and I was quite surprised like we'd hired a CFO by this point um and he was like I can't believe they just wired us the money like you know like we filled in some forms in this us company as Senators they did uh anyway we we paid it back to them very easy that was a letter they sent to us and actually it was only a few months afterwards you see that most of our balance is still outstanding um so they didn't charge us anything payment fee so if you are in a bind like you know tapping to find a buffet the interest rate's a bit higher than what you pay but you don't have early repayment fees so last but I'll touch on uh is just kind of free free lessons One Core theme there build a sustainable startup um like don't raise Venture money to just support your runways and keep experimenting go back to the basics even if it means like being uncomfortable for a little bit um so that's definitely number one tilt the odds in your favor I think a lot of this is about making sure that you're staying positive staying determined but also bringing your team with you on that Journey like if you start having like doubts amongst your staff then it's really gonna make this this a hard process for you and the last one and it sounds really stupid don't run out of cash but not running out of cash actually starts today it starts like way early like right now we're like okay good we're good for 24 months but we're going to make sure that we the cash we've got today is going to last us through to cash for profitability or our next round um so by our plan is by our next round probably about half our cash there in the bank and we're doing that step and see approach so like this is what I'm focused on right now even though we have cash so it's not you know it's really important anyway last last bit there's a micro context it's stuff out there it's not getting any easier so make sure you factor into your what you're doing in terms of deal process make sure that you're you're negotiating the best deal for your team and don't settle for second best when it comes to investors and a few conclusions there is that over time I think it is it's currently up anyway I did have one more bit but I think Nathan's looking at me strange um thank you thanks very much stops counting up I know good job cheers