How Demandjump CEO Christopher Day grew to $5.5M revenue and 22 customers in 2024.

guys Chris has been in many Industries gotten new investment banking before founding his own software company to manage up in 2015 grew that to a million bucks in Revenue fairly quickly first 18 months raised some Capital realized how VC worked inside of the company and said you know what man it's time for me to go give back and ultimately it was recruited in a very competitive process to run Elevate which is one of the most active seed funds in the world they've got uh caught the most active uh in Indianapolis and that Midwest region with over 500 total Investments 5 billion economic impact now focused on a giving back to entrepreneurs and supporting companies whether it's software Health Tech fintech Etc hey folks my guest today is tof today he's the CEO of elevate Adventures the number one most active seed an early stage investor in the Great Lakes region and number 24 in the U.S he's an innovator entrepreneur business Creator Community Builder job maker and wealth Creator through his Endeavors over the last 30 years you guys will respect what he did as co-founder and chief executive officer at demand jump he focused on that for over seven years so hope you're ready to take us to the top yeah absolutely Nathan I'm glad to be here let's roll all right let's roll so let's let's talk about your street cred first before we talk about your investing so street cred uh demand jump was on to I think in 2015 was that your first software company no uh my first software company went back to probably in the year 2000 ish 2002-ish when we built some billing software for the utility industry interesting and uh so did that work well or was it sort of a crash and burn and you learned take the learnings put in demand jump oh no we crushed it uh so we have eight I've started eight companies and seven different verticals over the last uh 25 plus years and those have been in uh you know hard tech and software Investment Banking commercial real estate family entertainment.com all kinds of different businesses um and uh did bottled water that was my one failure I felt at the model water business that's a hard one that's a hard one okay so what was what was demand jumps sort of texture you know is it bootstrap were you on on the equity side and raising as much as you could how did you build a business yeah we initially started domain jump uh providing largely uh Services right so we were trying to use machine learning and AI to figure out um some things we actually wrote a book uh machine was plugged we just we just released this book a couple of weeks ago pillar based marketing for those of you listening on audio only yeah it's called pillar based marketing uh a data driven methodology for SEO and content that actually works we just released that a few weeks ago but the concept was everybody writes tons of content now it's been exasperated by chat GPT right so people are re-writing more content and the there's all different kinds of use cases for Content but the use case we were trying to solve was how can I write content that people will see my target market will see when they're in research decision or buy mode drive those leads to me to give me a shot at selling my product or service to that to that Target customer so were you like I'm looking at the headline right now more page one rankings more customers more Revenue I mean are you like connecting companies with an army of writers to put out the content or is it more like ah reps or SCM Rush where it's where it's truly SEO software yep so there's so it's a one two punch so there's a there's a software there's a a platform that you enter in any pillar topic so that pillar topic could be coffee mugs or sales forecasting or whatever it doesn't matter what the industry what the business is but in the B2B use case uh you enter whatever you're selling it could be cyber security it could be uh stock 2 compliance whatever it is you enter that that topic that pillar topic into the platform the platform in less than 10 minutes out um Maps out the entire world around that pillar Topic in your website against your competitors websites to understand what is the roadmap what are the words and the questions that are most highly connected to the center pillar topic and exactly how you should structure your content that maps to how the human brain actually thinks interesting okay and you got that going in 2015 right yeah it took us probably five years to figure out that use case that we just talked about we just launched a couple yeah oh wow so like 2015 to 2020 you'd call that figuring out mode yes oh wow okay it's a beast it's about neurosciences and it's a very complex problem to solve how did you manage the storyline though because when I look at your crunch based profile you raised funding during this period so you must have had some track record to point to inside the company to say hey give us five million bucks yep yeah we were originally doing um I'll call it um analytics it's like marker to spend you know 80 of their time trying to figure out what to do and so the whole purpose of domain jump originally was cross-sector in those various marketing channels helping marketers understand what they should go do right helping them reduce the time figuring out what to do and and just get down to Brass tax on here's the next five things I should do the most powerful interesting so Chris how many years did it take you to hit him at your first million dollar year at that company uh uh probably 18 months two years oh so it's pretty okay that's pretty rapid that's not too long okay so 2017 you're doing a million bucks a year 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 valuation 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 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 and then why did you decide you know there's obviously two very choice you know usually I hear the VCS thing it's usually on the coast you're in Indianapolis actually but you still chose to go sort of a heavy you know raise money route why not bootstrap um because to figure that out requires data scientists uh machine learning Engineers people that make a lot of money and um and we didn't have you know that kind of bankroll to bankroll the whole thing and so um that's why we that's why we raise some money that's fair this this will pair nicely into Elevate as we build into that part of the story but you know dilution is something that a lot of first-time Founders they don't understand how to manage until they're burned ones they go through their first whole startup and then realize okay here's how to that's how dilution actually works that's how Carter actually works that's what a fully diluted share actually means how did you manage dilution as you were growing demand jump so I you know I don't think about dilution uh there's a there's a a uh I'll call them a platinum level famous investor his name's Bob Davoli he's out of Boston he used to be on the cover of magazines back in the.com Era and and I agree with Bob's concept here I don't think about it as dilution um I think about it is the opportunity people start companies for all different kinds of reasons there's no right or wrong way and but if you're raising Venture Capital um I I don't think about dilution I think about it's one step or two or three steps closer to achieving the solution that you're trying to actually build and so would you rather that be successful and get in Market or or not um would I rather have a hundred percent of 50 bucks or would I rather have you know 10 or 15 percent of a billion dollars you know that's that's how I think about it I mean that's obviously certainly what we all like to think about that's what we're dreaming of as Founders and entrepreneurs but just because you raise it certainly doesn't guarantee that you're going to go be what you just described right which is a billion dollar success story so when you go raise six nine in your series a in 2018 you know you you put together a thesis on what you guys want to go build um but but again you know most folks in their series they are selling 10 and 20 10 to 15 of the company right so if you're you know raising there at a 60 70 million evaluation selling 10 to 15 and then things don't pan out and become that billion dollar story then what do you try and buy them out do you it sounds like maybe you leave I mean how do you manage that no you you you pivot and you you re you restack the capital stack you do whatever you have to do right to make sure what does that mean restock the capital stack so if you have to do a Down Round you're right you just go through that process um whatever it takes to make that company successful you you make those decisions as you go so I I think that investors over the years it's just like in real estate things get really hot and new words get invented and new technology that actually add value come out and I think investors a lot of times put undue pressure on entrepreneurs and you know so there's Concepts out there like the triple triple double double um or there's um you know 150 growth rates and 120 net dollar retention you know all these Best in Class statistics and and there's people on the coast that get funded with large sums of money right and a lot of that money uh ends up getting wasted and and sometimes entrepreneurs are trying to figure out you know AI is a difficult thing machine learning is a difficult thing you're going to go through a lot of trial and error to try to truly out to truly figure out something interesting and you know a lot of investors today like you know Break Even running the break-even line is is now sexy right or having a burn rate that's let's say a hundred thousand dollars a month or less versus three four five hundred thousand dollars um and so the investors that we're gonna try to encourage high growth and maybe product Market fit had not been achieved a hundred percent now all those companies are going through uh down rounds right in adjusting the valuation to raise the next round of capital that's required to still grow and so I you know a lot of investors think 50 growth 30 40 50 growth now with great unit economics is an awesome thing right 50 growth is the new sexy as compared to 150 because in those early those early days when you transfer it's so hard to transfer from founder-led sales to process lead sales that is a big deal and often companies try to cross that Chasm too early which ends up in several million dollars of lost investment so take us now on to elevate it from I'm going off your LinkedIn it looks like you left a man up and in what year and why did you leave yeah so I've been passionate about Venture Capital uh for the last 15 years I had an investment banking firm uh what was that in um 2007 or I don't know 2017 I forget my ears already now 2009 time frame 2008 2009 time frame uh started an investment banking firm and was sitting on the other side of the table right so I've been an entrepreneur been an investor and now with the investment banking route and I just became really passionate about the funding Continuum here in the middle quarter of the United States and especially in Indiana you know living in Indianapolis and so um I see all of these awesome companies uh that are starting right here in the middle Corridor or in Indiana in Indianapolis and it's really hard to access Capital to access Talent um to to access the investment banking services when they go to exit and so uh the opportunity came to lead Elevate I like to call it elevate 3.0 and the opportunity came around to lead Elevate and I just what does that mean Chris did they recruit you at a demand jump like in some it was already a fun structure in place what does that mean they had a national recruiter um and so um that National recruiter reached out and you know they were talking to I think several hundred people across the country looking for the next leader and the national recruiter reached out and uh we just started talking how do you manage I mean you don't want your baby to die either it demands him I mean I don't know how many full-time folks you had there but it sounds like you may have managed through like you know maybe a Down Round And then you sort of have to leave how do you make sure morale doesn't plummet when you leave we had an incredible leadership team the leadership team at demand jump I I would just say a second to none they're they're incredible um and I think all of those those folks are more important than I was right at that point um so we had a great leadership team we had a strong culture um and I felt confident that uh bringing in a new CEO to keep you know to take it into the growth phase um was the right thing to do for the company so yeah it all worked out it all worked out great are you comfortable sharing like how many folks were full-time when you decide to leave when yeah when when I left uh there were what we were 30 high 30s high 30s okay and are you comfortable sharing like a revenue range when you left or no I probably shouldn't share that right okay leave it up to the new uh leave them to the current CEO to talk about those things yeah that's fair we we like to try and guess at that by taking an average ARR per employee for companies like this which would put you guys somewhere between caught three and five of AR but again that's just to guess but point being you you were recruited uh you were recruited into Elevate and then talk to us about Elevate so so what's the fun structure Elevate we can see you've done a lot I mean on crunchbase even it looks like over 200 individual Investments so what's the fun structure yep so we've done over I think 520 Investments um uh throughout elevates history so Elevate is the number one most active early and Seed stage investor in the Great Lakes region number 24 most active in the United States uh we have 215 million dollars in assets are management is that is that measured by Chris is that just measured by like literally volume of number of deals a thousand dollars in yeah yeah and the lowest we write checks from twenty thousand to two million dollars in any given round up to four million dollars at any given company we invest in the ideation pre-seed seed in series a uh portions of the funding Continuum we invest cross-sector so that includes anything from SAS to hard tech to sports Tech to health care we even do some Med device food AG we truly invest cross sector and um we've invested 156 million dollars to date and that's been co-invested with another 2.1 billion dollars of other VCS you know throughout the uh whether it's the state or the nation or the globe of other investors that invested alongside of us and I cut you off on accident early what was your total am What's the total amount of funding that you guys have raised to 215 million okay over over two funds uh it's an evergreen fund so we have a total of 250 million dollars in assets under management I see okay and 156 million deployed today but the big number especially right now when the water is going out and we're seeing who's wearing a bathing suit is DPI right so how much of you guys paid back out to investors um so we it's Evergreen so we don't we just keep reinvesting it so uh so our our LP we in essence have uh one LP which is the uh Indiana Economic Development Corporation so we work with the state and so it's state and federal dollars that we deploy and we just right we just keep recycling that that those Investments I would consider that an unfair advantage that's good for you but not not standard where most folks have to go race from a bunch of different LPS and they got to manage you know you know distributions and all that jazz the the the the government Council that doesn't want you to deploy money back to them they want you to reinvest it and recycle it back into the fund to support local local startups right that's right we've had a five billion dollar impact on the state of Indiana over the last 10 years how do you measure that what does that mean how do you get to 5 billion so so we look at the co-investment that we've driven into the state um we look at the uh the annual uh payroll uh of our Port coast and the employees we look at the um uh the the real the payroll taxes that are paid to the state we look at sales tax that's a revenue source to the state so when you add all those things up it's about a five billion it's actually probably more than that with various ways you can measure uh the various ways you can measure economic development but um but yeah it's a massive number how do you I mean I know we all know how sort of a trade additional VC fundraise but you know at the risk of being like too sensitive here I mean how do you make money off this is a traditional 2 and 20 you're taking a management fee or you get carry or what nope nope no we just we have a a contract to execute the the uh deployment of those dollars so it's just a Professional Services agreement that we have and um no variable it's just a flat fee for management if something goes and sells for a billion dollars you don't get you know some small cut of that no oh interesting do you ever go mad look at this billion dollar exit we just had I wish I wish you know I had a regular VC fund so we could get some of that extra upside well I think there's there's ways that um Elevate 3.0 I think there's ways that um that we can with all of the track record that we've had um I think there's opportunity in the future to uh other people who may have interest in US managing their funds um in a more of a traditional manner I think those opportunities are are out there uh and and to also move up the funding Continuum in the gross Equity phase of it so uh so those things I think are definitely on the the future path you think like majority minority Recaps you know main sales style sort of stuff or what no I think um I think so for example moving Upstream into series B into growth Equity I think it's a real possibility and to be more of a traditional fund um there are other institutions organizations um that have large amounts of dollars that they want to deploy um in a more traditional format uh you know to get a return on that investment to to but to drive more new company starts help companies you know that um help companies that they know grow faster more efficiently I think those opportunities definitely exist out there writing a book is not easy I remember how long it took me to write mine and portfolio Random House grilled me to the ground in terms of detail and oh it was so much work why take the time to write pillar-based marketing and and uh and it's congratulations on the launch it looks like it just came out in March late March yep absolutely so um we started it took about a year right I don't know how long it took to write yearbook but it took about a year I wrote it with a gentleman named Ryan Rock Ryan was the CEO of autonomy media we bought meconomy media when when I was leading demand jump so I was a little over a year ago December we acquired a company media and the reason we wrote it was there there's there the world of SEO is just littered with um I'll just say um hacks and you know just a disaster honestly just SEO is a blank Show and um and people always promise some magic bullet Etc and there is no magic bullet in in SEO and I think it really couldn't be solved because we didn't have the database structures and the computational power to actually solve it um historically with you know with the growth the internet and there's there's just a lot of myths I would say there's a lot of marking myths in around SEO actually Marketing in general and so we we wrote the book to kind of once and for all lay out the Story from beginning to end like all the pain that that markers have suffered over the last what 25 years of the of the you know the loss of the internet and the growth of the internet and just walk people step by step through all the things that we all experienced so that we could establish um you know validity that we understand what we're talking about and then how we approach the problem differently and then what the results of of that solution are like even today I see all over LinkedIn you know people like oh my gosh Chad you continues here our problems are solved right we can put stuff in its chat gbt and we can write content until the cows come home and um that's true uh but some people are conflating that with it'll work on for SEO and it just simply won't um the the internet was built for people to find products and services it was not built for products and services to find people the target market and that's what demand jump solves is the ability through any pillar topic to understand what like I don't know what you're thinking right now right you could be thinking I want to go to Chick-fil-A right and get a sandwich I'm starving right um and so we but we the internet is a pure reflection of the human brain at this point right we've been talking to Smart devices now for how many years 10 plus or minus years and so the internet is an absolute reflection of the human brain now so we applied math right and neurosciences to all of that data to understand how all these words are connected and basically mirror the network of the human brain which is the internet and that's how all the search engines work right they want to match a human most closely aligned to what they're looking for in that moment and and and that's what the math does so check it out pillar-based marketing Chris we're out of time or so we're out of time for today let's wrap it here with the famous five the first one's always your favorite book we'll put pillar based Marketing in there number two who's the CEO you're following or studying oh gosh I I follow pretty much anybody um anyone in Indiana that doesn't get enough attention Eric Christopher uh zylo okay number three is what's your favorite online tool for building Elevate besides demand jump um my all my favorite online tool for for building Elevate yeah LinkedIn LinkedIn yeah number four how many hours of sleep to get every night about five and situation uh married single kiddos single and a freshman in high school 15 years old oh very cool how old are you two I'm 52 52 last question something you wish you knew when you were 20. um to stay always stay true to what you believe the the right next day the the right next step step is stay convicted guys Chris has been in many Industries gotten new investment banking before founding his own software company to manage up in 2015 grew that to a million bucks in Revenue fairly quickly first 18 months raise some Capital realized how uh VC worked inside of the company and then said you know what man it's time for me to go give back and ultimately it was recruited in a very competitive process to run Elevate which is one of the most active seed funds in the world they've got uh you caught the most active uh in Indianapolis and that Midwest region with over 500 total Investments five billion economic impact now focused on a giving back to entrepreneurs and supporting companies whether it's software Health Tech fintech Etc I got a new book out called pillar-based marketing check it out Chris thanks for taking us to the top thank you one more thing before you go we have a brand new show every Thursday at 1pm Central it's called Shark Tank for SAS 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