Dealpadrevenue & funding

Introduction hey folks my guest today is Adam Baker he's the founder of four B2B SAS companies and two exits he's currently the founder and CEO of churley doai and deal pad. iio he boot drop chle to 6.5 million bucks in ARR and in six months has generated $400,000 in ARR for deal pad Adam you're ready ticket us to the top hey how you doing good to see you good so my obvious question is churley seems to be killing it why go get distracted with deal pad well um ch's doing well I think we we really rid a wave on churley during um the last two years where where companies were doubling down on retention uh and and timing for us was was very good obviously um companies really wanted to understand the root cause of why their customers left they really wanted to kind of keep their customers so we um we on board it a we went from a 1.5 million AR to about six million AR um in in that period what period oh so from um from June 2020 until April this year so wow some two years yeah strap no outside Capital no outside Bootstrapped Capital at all Tot so you own 100% of that business um no I don't um I own 85% of that business okay who's it what 15 15% as your your engineers or what yeah so our employees um earn uh earn a bunch and uh and we've got um I've got some advisers that I've given shares to Etc but you know with have no outside funding at all that's amazing so when you see a deal like like paddle buying profit well you know now that that profit well retained product just the retain product is doing about 400,000 bucks a month so they're about your same size um you saw the exit price do you look at selling chly on the back of that yeah you know M you know mainly I'm focused on building journ I I exited my last company way too early and I think if and it haunts me a little bit I think if ID held on um for another four or five years I I I would have probably 10x the valuation I got out of my last company so I'm uh I'm a little bit paranoid about getting out too early which might not be a good thing but tell us that story real quick what was that first company you thought you sold to sold too early yeah so that was my second Venture my first company was was acquired um way back in 2007 um my last company was called blotter and and we were we were acquired um by the guardian Media Group and um it was we were we were basically authenticating news footage for news rooms all over the world and it was we were kind of you know doing fake news before fake news was even coined as a ter and and um there were only two players in our market and one was acquired about six months before us and it made me panic um thinking how many exits can there be now and um and we were really in the kind of the news media content space there's not a lot of m&a happening in that space so um I I I kind of went in with both feet um and and exited uh it was a good result um don't get me wrong it was a good outcome but I think if I'd held in I I I could have you know built that company to a considerably higher um valuation we we we to that yeah interesting well you've been there you've done that it makes sense now before move into deal pad on terly today Currently serving 100 customers how many customers you have and are they mainly B2B SAS all b2bs and um we've got about 90 customers 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 valuation data out from over 287 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 valuation is there's many different ways to value a SAS business so so the reason you're going to see three or four different valuations inside of your founder paath 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 realtime valuation data points Founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22% 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 we'll go in here and look at all the 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 founder path.com for / products SLV valuations or if you go to founder path.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 there's some concentration Monthly recurring revenue right I mean with 90 customers 6.5 million Revenue you got some big customers yeah we've got big customers the the one of the things I like about the business one of the things I really get frustrated about this business and why I'm founding dpad um is it's extremely complex and and so this is not offthe shelf software so we've built our our models um you know we've we've got proprietary algorithms but we have to customize everything and so when we go into a company um you know our services cost usually 3x is our SAS cost so we're not so our our Revenue isn't just on um isn't just SAS it's SAS plus services to implement I and it just takes so long and and and I get I just get bored with it and so we're we're carrying on journe definitely um you know building a great company um but dpad you know um is a combination of my work really over the last 10 years of helping my sales teams deliver quotas and and make sure they hit Clos dates on time so we can forecast well and and and and whilst the two companies and two products are very separate there's definitely a lot of um Synergy and and I can see that the the two products unifying at some point where we take a a pro you know a kind of a a product to Market where it's you know we're going to help you um win customers with deal pen and close deals and we're going to help you retain them and we're going to show you how to ah retain them so I can see you know somewhere in the future potentially there's there's the opportunity for us to to to go out with a joint prop but at the moment they're very separate um and um you you know so so I've been using the dill pad kind of model behind it for years to help my Sal teams and and um consistently see that it helps and so we're we've turned that into software and the the validation we've had so far has been phenomenal that's amazing let me um I want to spend the second half of the show all on Deal pad on the chly stuff you mentioned SP between service and SAS what would you say this like if if someone listen I'm really asking if someone listening right now wants to sign up what's like the minimum AR they have to have to value out of it what are they going to pay you on the service side and what are they probably going to pay you on the SAS side honestly I couldn't tell you because it varies customer to customer based on the size of the customer complexity data sets data maturity um typically though um we're running at about 70% AR on SAS and then about 30% on onetime services to implement that I see and the 70% SAS are you taking like a percent of retained revenue or is it a flat fee it's a flat fee oh that's nice that's different than the market yeah yeah so we decided not to take that route because um well for for a lot of reasons but I think you then get into lots of contractual disputes and I've had this before where um companies would then start to to debate about you know who how much revenue they've actually got from us or if they if they acquire an organization and their revenue ramps because of the acquisition does we do we include that or not um you know it just gets really messy so we we kept it really clean um we're happy we've Tak you know a decent sess um fee and we think that's fair for us and fair for our customers yeah no it feels very I mean it's so I mean just trying to do math 6.5 million total 70% is SAS so about 5 million is pure SAS 1.5 you could call as services but that 5 million SAS split among 90 customers would mean the average customer there is paying what $50,000 acvs right that's super healthy yeah yeah yeah it's good yeah okay so someone needs to really have like five 10 20 million bucks in AR to to get comfortable paying a $50 annual fee right yeah we've got customers lower than that on eror okay okay but but yeah I I think typically the size of our our customers when I look at them are around about the you know that that that type of level yeah yeah okay let's go into deal pad so you're building this internally it's helping your sales team out chle now how many sales folks out chle were using the first version of deal pad um we had eight using it at chy okay we've had 100 using it over over the the last 10 years um 500 or probably more than that but at chy specifically about eight ex use it and so when did you so it's now you've spun it out as its own entity do you have customers on that that are not from your other companies oh yeah all of them are I mean I don't have any repeat customers we've had to go out and and build out a sales motion from scratch and all of our all of our prospects and all of our customers are new oh wow okay it's very diff we're we're talking to different types of customers um so with dpad our Sweet Spot um are companies software companies again B2B um but where there's anywhere between five and 50 million AR um we we think that we can really help that segment um where there's an Enterprise sales motion but also where there's complexity in the sales process where you're managing multiple stakeholders um where you are you've probably got an average contract value annual contract value of 10K upwards um so it's you know not trans ction or it's not you know kind of you know you know docy sign who are just kind of trying to you know sell 50 $50 seats um it's but it could be Doc if they go into Enterprise and start to sell you know their Enterprise suite and so yeah so so our our ideal customer is very different to uh although they're both B2B SAS very different to churley and so when you look at just deal pad the customers paying for the software you just described what are they paying on average per year or per month again it depends um it depends so so it depends on what they buy from us um so we've got so dad has a kind of a solution set of um account planning of um kind of buyer alignment so there kind of a two-way buying process that they can they can Loop into and then Mutual action plans and and so um it depends what they want to buy a lot of our customers um initially go for the middle of that they they want to they want to actually understand what's happening in a deal and I think this is where this is where I see that we customers get most excited so inside their CRM whether it's sales force or HubSpot or pipe Drive um you know they're relying on intuition because ultimately the the the CRM can only tell you what's in the pipeline what data they have right they can't actually look into a deal and tell you at what what point that deal is at and how it's being evaluated what you know and and and um that's what we do so that's where we that's where deal pad comes but B are we talking like a 100 bucks a month or a th a month or 10,000 a month what's like The Sweet Spot yeah so average um I guess average investment into Dill pad is going to be somewhere around about the 12K so about a thousand bucks a month a thou okay okay perfect and and then you're are you upselling you're obviously upselling based off features it sounds like are you upselling based off anything else seats number of deals anything else no just just features just features okay interesting okay very cool and then again when obviously you've been building this for it sounds like a long time internally at other companies when would you say that that you started the company though uh we we started deal pad about two years ago um in terms of building the software um actually that's not true sorry we started building the software about two years ago and we started deal PAD as a company about eight months ago okay that's that's amazing and then so you've got customers on your site some hoot Suite uh fresh fresh books fresh Works Etc how many total customers are you working with today um we're working about 100 at the moment oh wow so I mean that's impressive and eight months you sent up 100 customers how are you what's your go to market right I assume you're using deal pad for your sales motion but what's your go to market yeah yeah deal pad helps a lot um so all outbound at the moment we've not really focused on any inbound because for me that was an investment we weren't really sure what we'd need to produce and what would work so we've just really focused on outbound um and we've got a team of sdrs we um deploy I guess three software um kind of vendors in our in our sales stack that help us go out and Prospect well um and and that's been it really it's just been a case of let's get leads in let's sit great qualification and Discovery calls let's really understand the pain we're solving um and and and let's solve that pain repeatedly for our customers that makes sense and and all these 100 customers are paying again about a thousand bucks a month yeah on average that's great so you're what 120 Grand a month in an mrr uh yeah yes but we we um we we're not M we're AR uh okay so you got it so you're well said differently you know about what is that 1.5 1.6 million something right in yeah if we place it over the course of 12 months yeah yeah yeah wow okay that's impressive that's really impressive um so yeah I mean zero to 1.6 million AR in eight months again that's super impressive now obviously you've you've eating your own dog food you use a tool so you know what's needed what does your team look like today at deal pad how many full-time yeah it's small uh we've got nine folks here n and bootstrapped right y totally bootstrapped again um are we gonna get stay bootstrapped you think um honestly I don't know he has a term sheet right now that's what that face means he's sitting on a term sheet right now I I I I think that there's a huge there's a huge white space with DPed um what's the offer what's in the term sheet how much we we we don't have an off yet all right fair enough what would make you decide I mean you're already wealthy right you could fund this yourself what would make you decide to go ahead and and raise VC yeah I think just like I've said there's a huge white SP at the moment we're not really we've got a few customers in the US um actually we've probably got about 20% of our customers in the US but that's a market I really want to um move into um that's going to take money um I think as well you know we're focused very much on software at the moment but there's you know I mean every organization in the world with a sales motion um could use deal pad and get value from it at that level of scale we'd have to we'd have to find money you know um and so let's let's see how it goes I mean if we can bootst this to 10 million um which is what my plan is AR um then we might be able to make some different choices about you know rather than going out raising money we could do it a different way we'll see I love that and are all most clients are they all B2B SAS all B2B SAS at the moment that's awesome I love your focus it's all be be SASS and and how did you get the MVP built do you have Engineers full-time or use a Dev shop neither um so well so I found there there was a um by the way if you're looking for a co-founder there's a great um it's called zhaw and it's a it's a really great platform for finding co-founders so I I basically just registered on there signed up they wanted me to pay off the bat and I'm like well I don't even know what this site is but I did it and I found a I found a co-founder we I I probably did a beauty parade of about 25 um technical people that wanted to cound wait how do you spell it it's Z Hawk yeah I think so I've proba we got that wrong um you can I'll I'll ping it to you after this and you can edit it out try right now because I'm almost certainly got that wrong um but I think you're I think you're I think you're thinking about Starhawk doio Starhawk there yeah yeah yeah and so yeah good good research and um and so I I very specifically needed a technical um co-founder um because I'm not I'm not a technical founder and U met Kim my my founder he was at Facebook and uh and and so Kim was a um a program manager at Facebook and prior to that he'd been a um lead at King on Candy Crush W and we we just hit it off and um he you split evenly you go 50/50 or what yeah 5050 yeah and so um you know he was the first person in the 25 or 30 that I've met and I'd spent quite a lot of time in conversations with people that we he just got it and um and he's built the platform um you know from almost from scratch and um you're using my models uh but he's you know he's gone and built the platform from scratch and and you know the for both of us I think you know we decided to go 5050 and and you know despite it being my concept and something that I've been using and I verified and I had the domain expertise I I I I wanted Kim to have 50% of this because I wanted him to feel that he had shared ownership and and me that was really important for him it was also really important well we're we're we know you have great playbooks we're excited to have you come to speak on September 1 in Austin you're going on stage at a.m. this the headline there the email templates that turnley and deal pad used to break uh 10 or grow to 10 million bucks in AR so we're really excited to to learn that stuff you've got playbooks for everything huh no I wouldn't say everything but um particular all right fair enough Adam let's wrap up here with the famous five number one last book you read um uh What the Dog Saw What the Dog Saw number two is there a CEO you're following or studying uh question probably not at the moment okay number three what's your favorite online tool for building deal pad besides one of your own tools yeah Lusha Lusha yeah number in love with Lusha right now yeah number four how many hours of sleep do you get every night uh quite a lot um nine nine love that and situation married single kids um single kids how many kiddos uh I have a daughter who's 26 and a grandson who's one oh wow that's pretty darn cool all right and how old are you uh I'm 48 48 last question something you wish knew when you were 20 um oh BL me um so many things um don't raise money early guys there you have it he built churley he built churley about 6.5 million bucks bootstrap 70% that revenue is pure SAS working with 90 customers but now he said you know what I've got to spend this tool called deal pad out which is sales enablement helps you track these deal flow the deal flow over time it's growing this from0 to $1.2 million run rate here in just under 89 months which is incredible found as Co founder on start Hawk they split at 5050 totally bootstrap serving 100 customers today he wants to bootstrap it up to 10 million bucks we'll see what happens Adam thanks for taking us to the top see you one more thing before you go we have a brand new show every Thursday at 1 pm Central it's called Shark Tank for SAS we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares backend dashboards their expenses their revenue arpu CAC LTV you name they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m. central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2 p.m Central to make sure you don't miss any of that make sure you click the Subscribe button below here on YouTube the big red button and then click the little bell notification to make sure you get notifications when we do go live I wouldn't want you to miss breaking news in the Sass World whether it's an acquisition a big fund raise a big sale a big profitability statement or something else I don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack Community for B2B SAS Founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at Nathan la.com slack in the 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