How Incentify CEO Laurence Sotsky grew to $21.3M revenue and 50 customers in 2024.

hello everyone my guest today is lawrence satsuki he's the ceo of incentify he's an accomplished high-tech ceo with the track record of successfully managing high-performing companies and teams most recently lawrence was ceo and founder of hopscotch's sas based venture-backed mobile application development platform company in the sports and entertainment space lawrence are you ready to take to the top it's nice to meet you nathan i'm excited to be here you bet thanks for thanks for making the time now look uh tax r d and credits is a hot space entrepreneurs know they're owed something but they don't want to spend the time combing through tax all to figure out what they're owed how are you playing in the space well it's a it's an interesting one so credits and incentives um is is almost like a developing space in a sense they've been out there for quite some time there's literally a trillion dollars of credits and incentives that are out there and available for various organizations and and we're trying to democratize uh the process by which people can discover manage and monetize these credits and incentives so we've developed an incredible platform a purpose-built solution specifically for this space where uh companies can come they can find the credits incentives that might be owed to them and they can work with us and their advisors uh to to work their way through and stay in compliance and actually monetize these these this important asset class and again there's a very hot space there's a lot of companies in the spaces you're on boarding very similar to the rest people are connecting their payroll their bank accounts and you're sort of coming data to find these rewards is that accurate um a little bit different for us we've been focused there are a couple of companies that are working in the in the smaller in the smaller spaces in the uh startup space in the smb space we're focused primarily in the enterprise space with big fortune 500 companies we have about 30 uh fortune 500 companies that we found on our own we also signed a pretty big deal with a big advisory firm and we're on boarding in the process of onboarding more than 100 of their customers on our platform so we're a little a little bit different not necessarily connecting into to payroll our companies usually work with big erps like sap and oracle financials uh but a similar process nonetheless i see okay so got it that makes sense yeah so the main treats of the world might be focused on smbs right you're way more enterprise level fortune 500 30 out of 500 so far that's right we are we are so far although we are seeing that our our platform is strong enough and easy enough to use that we can start moving downstream for now we're focused on the on the enterprise we certainly intend to move downstream um as as time goes on and so what's the sales pitch there right you know you're finding tax credits you're saying nathan your company has owed 535 000 because of tax credits x y and z where can you add additional value so people will pick you over other competitors who are finding the exact same credits available yeah it's a great question so the our process is a little bit different if you think about big fortune 500 companies they're building distribution centers warehouses retail stores they're building sustainable energy projects like wind farms they're doing all these big big capital expenditure projects what we often find is the tax departments don't have the time nor do they usually have dedicated resources to identifying and securing all of the credits and incentives in a particular space so that's really where we step in so our sales pitch sounds something like this you guys are probably owed quite a bit of money from the government for either projects that you worked on in the past or projects that you have planned to work on in the future you can certainly work with one of the big advisors ryan or one of the big four or somebody like that but what our product does is it actually injects technology looks at all of your site locations and then helps to figure out exactly where uh credits and incentives could be owed to you it's a it's not too unlike like a rocket mortgage so instead of going directly to a bank to trying to secure a mortgage for your house you go to rocket mortgage you put in some information rocket mortgage then goes out and finds all the primary secondary home equity loans whatever it is that that a particular uh buyer or or um borrower needs it's very similar to that and lawrence how are folks paying you is it a one-time fee you're getting 10 of any recovered funds or is there a sas product here too yeah ours is also a little different than main street and and the others that you mentioned they're mostly working on a success fee for us we are we are a uh software as a service company we're not well advisor so we do we do take a a monthly fee from the uh from the client to use our to use our product what is that on average well i know it's probably a huge range what's an average uh our average price is around ten thousand dollars uh and ten thousand dollars a month for some big big enterprise customers we've seen tremendous roi from uh from it however is there a portion of that fee that is tied to funds you recover from the government or is it tied to something else yeah so so not necessarily tied to that um as a success fee so to speak for us we just ensure and our clients don't pay us until they know that they can at least clear the amount of amount of money that they're paying us and then some yep fair enough love that and give me the back story here when did you guys launch this but actually you have to tell us the backstory here because i don't think your original founders but when did the original founders launch the business yeah so the original founder is a gentleman named brett markinson who's a who's a a very successful entrepreneur he was the the the guy behind a hot look that sold to nordstrom he was the guy behind lowermybills.com that sold to experian so just an incredible track record of of identifying spaces that were underserved and and getting into those spaces in a really big way so he the backstory is he was actually playing golf with the son of max factor from the uh from the cosmetics industry and they were talking about uh credits and incentives for their own personal uh financial planning and then that kind of got him into maybe this is something for a business maybe i should start a business and then as soon as it became more of a sas company he brought me in i just well hold on so what year was that when did the business launch so the business launched about five years ago but it was more of a marketplace for transferable tax credits he then realized that there was a better market for um to build a sas company out of this instead of building an exchange we pivoted the company i was hired in about a year and a half ago and we've been we've been on just a rocket ship ride ever since then got it so early 2020 you joined the business um and and what was the thinking there i mean there are founders listening right now that maybe are tired want to bring in another ceo but they're worried about the signal that sends to the market how did you guys make sure that transition was smooth especially being venture-backed well um well we were really more bootstrapped than venture-backed uh we haven't we have not taken a institutional round yet we're certainly you know considering that this year just with the trajectory and growth uh and sort of where we sit um well right i'm sorry crime wrong here sorry my research might be wrong did ryan llc they didn't put in 4.3 million dollars ryan did put in money as a strategic round but we we are not yet calling that a series a we haven't taken an institutional round yet from a from a vc right yeah you have raised 4.3 million just not a traditional pre-seed seed series a sort of style correct you're exactly correct yeah so so i think i think for founders that are listening um i think the idea was bring someone in that has a lot of experience running these types of software companies my whole career i started early in my career management consulting but quickly realized that my my passion was really sales i i worked as a salesperson a sales manager chief revenue officer for venture-backed companies for the last 10 years my la and then i started my last company myself as a ceo successfully sold that so i've got the good i've got a strong track record and i think the founders realized that uh better to put somebody in the seat that has sort of done this before uh has relationships in the in the vc space knows how to run a sas company hiring the right people um and it's been it's been great ever since great relationship with uh with brad and and another co-founder uh and and really we're just on a on a great trajectory now founders listen and go i want to get a ceo of the quality of lawrence how the heck do i have to incentivize a guy like that i mean can you obviously don't tell me specifics but the degree you can i mean can you tell me it's obviously comp plus equity i mean did you get more or less than 10 equity in the business can't share my cap table with you but uh they they they paid me well i've got a great equity stake um in in the company and i will tell you like i've got this book over sitting over my right shoulder here you know start with why i think for me i was more interested in finding a company that had a real strong why message a real a real passion project for me i've done a lot of things i've had some success in my career which which is all great but i really want to do something where i could i could give back a little bit too now while we're on this sort of rocket ship ride the great thing about credits and incentives is that it really does uh help society it helps it helps main street america i love the name main street from one of our competitors uh because they're kind of doing the same thing um but it's it's you know things like systems you kind of play right into their their line right there all right talked earlier though about like most your companies that are fortune 500 right so i mean this that's right that's right your enterprise that's right that's right so i mean there's more than enough room for both of us to both of us to play but we do talk about that we do talk about main street america because things like affordable housing things like sustainable energy things like um building in depressed neighborhoods things like coronavirus relief bills and tax credits and incentives there all those things are really important to the american economy all those things get americans back to work as well as as well we're international as well as well as global global folks back to work those things are really important to me if i can say that my technology had a hand in building a wind farm uh off off the coast of uh off the coast of california that's that's changing the landscape of uh coal based fuel over to sustainable fuel then i i can i can kind of look my kids in the eye and say that i'm doing a good thing in the world so or distribution center in west virginia that created a thousand jobs that wouldn't exist without your credit that's exactly correct that's exactly correct nathan talk to me about customer growth so you weren't there in the early days in 2016 so i won't ask about how you got your first couple customers but today you mentioned 30 of the fortune 500 how many total customers are you serving today so we have about 50 customers today the majority of them of course in the in the fortune 500 which is which is great and then i mentioned we did sign a deal with ryan they did invest in our company and we're pretty close to rolling out a hun over 100 of their uh the target's 125 we're at just about 100 now of their customers using our product as well which is amazing for a smaller company like mine as i'm sure you know being able to see that many different industries and how all these different folks are using our product is invaluable to us as well yeah i mean that's another reason to take the strategic investment there and i mean by by their customers i assume you mean all the builders that they work with or the developers or the things of that nature that we mean well ryan ryan is not a not a not a builder per se they're they're an advisor very similar to the big four they're actually the fifth largest in the world in terms of advisory services and so they have they do have builders but they have just about any industry you can imagine they've got uh they've got customers in and they're doing a lot of work in a lot of different industries they're they're leveraging our technologies that so that they have the best technology and the best advisory services and they can really serve their customers in a way that they never had before as well as as well as tether those customers to ryan using this advanced technology i see okay that makes sense flesh out your team for me how many folks on the team today we've got uh we've got about 25 25 folks on the team majority on the tech side we we just hired a number of new folks on the enterprise sales side which has been great love for a little for a while there was just kind of me running around selling a lot of stuff now we actually have a professionalized uh professionalized sales team uh and and it's been it's been really fun for the folks that have come over we we intentionally hired folks out of the um out of the kind of the treasury management space folks that were very comfortable talking to a cfo a controller tax team uh and those guys have all done great they've got fat pipelines and we're starting to really bring in a lot of deals 25 total how many engineers we've got uh 10 engineers all um all in la so we don't have anyone nobody offshore quite yet i don't know if we'll build offshore or not my last company we had a big offshore operation this one this one we've done all uh sort of inside of uh inside of the american walls so to speak and how many of those sales reps you said you had on the team are actually carrying a quota so we've got uh four quota carrying reps right now as well as a couple of sdrs to support those to support those reps how do you set this up right i mean this is the first big i think like real scaling mechanism for early stage sas companies if you can figure out the mechanics how your sales team's going to work you can scale to 50 100 million bucks in revenue right scaling that up so how did you set quota for your first reps how do you think about that yeah no it's a it's a great question so so what we did was we made we hired one person first uh and we made sure that person was productive i think that's a really important lesson for all the founders that are listening and into you just find that when you say productive i mean what quota they had half a million their first year millionaire first year what is productive right so so for us uh we're looking for our guys to sell uh a quarter of a million dollars a quarter which is not that hard to do because you figure it's like two or three for us it's two or three deals our deal sizes are pretty large uh so two or three deals is what we're looking for so by productive what i mean is they have um they're they're they're they're productive every day at the top of the funnel pulling things through all the way to the all the way to the bottom of the funnel we have an sdr uh one sdr sales development rep for for every two of our uh uh quota carrying account executives and the idea is that those two those those folks work together that team of three works together to ensure that they have a certain number of discovery calls that are set up so our our metrics in terms of productivity are a minimum of five discovery calls per week which should translate to uh three um full presentations and demos and and one of those three we in terms of our metrics one of those three should move on into the funnel in sort of starting the starting the deal cycle so as long as we have folks that are at that pace then we realize we can hire more hire more sales hire more sales folks then it's scales yeah i mean when you get a sense that works then you start going about how do i put fuel on the fire maybe you're already there are you planning to raise this year we are probably going to raise uh q4 we we're already profitable but if we want to kind of if we want to kind of take ourselves to a point of really being able to attack the market we are going to need to raise and we've been talking to some vcs uh a bunch of vcs have been very helpful to me and i've been talking to them over over the past six months in fact i'd say that's another really good lesson that i learned my first company versus now is talk to vcs early make sure they know who you are and make sure they understand your story because when you when you need money it's always tough to find it when you don't need it it's it certainly is a lot easier uh we're seeing that we're seeing that here now we don't need the money but there's a lot of folks out there that would love to participate in this story and again i think it's because of the why i think it's because we're really going to be able to change the u.s and international economy through credits and through credit and incentive monetization how much do you think you'll raise it's a great it's a great question um it's one that i talk about with my chairman the the the founder brett markinson quite a bit um it it's always the careful counterbalance we don't want to i think it depends on what sort of evaluation we can get like luckily for now for us knock on wood we're at an excellent quarter over quarter trajectory uh so i'm hoping that we can command a high valuation and i'm sure you know since you've talked about main street a couple of times they just raised at a 500 million valuation uh and took 60 million dollars so that's you know 11 uh dilution or so for for for that much money is is not bad so we have to sort of see where we'll where we'll end up um and and what we can raise and what type of dilution it'll take in but my guess is it'll be it'll be a it'll be a heavy round what do you consider i mean can you be a ranger i understand you're still figuring this out but are you talking like north of 10 million south of 10 million maybe 5 to 10 million can you range i think we'll we'll probably be north of 10 we'll probably be somewhere between 10 and 20 million in our rays and i think that'll really put us on a trajectory to to transform the landscape of this of this particular asset and where do you anticipate sort of pouring that fuel on the fire is it the sales motion is it more engineering is it something else all of the above yeah i think it's it's all of the above we'll we will need to continue our product is is outstanding um i'm actually i'm actually so impressed right when i interviewed for the for the role uh one of the top um recruiters here in la you know asked me to take a look at it and i looked at the product i was like this is amazing these guys have raised this is before the ryan uh the ryan deal so they've raised no money completely bootstrapped and the product was was outstanding i've seen the i've seen the opposite quite a bit i've been the part of a number of companies where the sales team was amazing but the product was was kind of lagging a lot of i call it sales fairy dust was sold in this case the product is amazing uh and we just had to sort of build out the business in the and the uh infrastructure infrastructure side so i think um i think the we will use the funds to continue to enhance the product drive features into the product of course hire a bigger sales team spend more money in marketing spend more money with with pr uh and really get that get our message out get our product built and get it get it into as many hands as we possibly can lawrence you mentioned earlier average deal price of ten thousand dollars per month and then chatted about your 50 customers today can i multiply those two together you guys are north of 500 000 a month in revenue yeah we're pretty close to that that's great you can break it this year will we break it this year you think you can break it this year i think you will be pretty close to it yep yeah i'm just doing backwards math i'm going okay if you want to raise 10 to 20 million and only send sell 10 to 15 of the business he's got to command and tell a story of 100 million to 200 million dollar valuation he's gotta get up past seven eight nine million bucks in terms of run rate which would be five six seven eight eight hundred grand a month so we'll see if you can do it it's certainly a hot space the enterprise focus is compelling we'll see what happens in the meantime let's wrap up with the famous five number one what's your favorite business book my favorite business book of course is uh start with why it's sitting right over here simon simon cynic the latest one love to talk about it love to find companies that uh that have a strong lie number two their ceo you're following are studying the ceo i'm following well you know jack dorsey is is definitely one of the one of the coolest guys that i could possibly follow love to see all the stuff he's doing not sure i understand all the decisions he makes like buying buying things like jay-z's uh streaming company and things like that but i love love following the guy he's entertaining he's interesting personally and professionally number three what's your favorite online tool for building your business uh it's got it right now it's gotta be zoom number four how many how many hours of sleep are you getting every night not not enough i work out uh pretty heavily my trainer is on top of me for my sleep i'm at about five hours a night i gotta get i gotta get that up i just can't seem to find a way and what's your situation lawrence married single kiddos uh single divorced i've got uh i've got three kids three kids and hell are you how old am i yeah four i have 45 45 last question what's something you wish you knew when you were 20. it's only a wish i knew when i was 20. um i think i uh i wish i knew when i was 20. i think i wish i knew um that i uh you you don't want to raise too much money when you're in a venture capital company uh you want to make sure that you're balancing the amount you raise with the amount that the amount that you need guys there you have it lawrence get incentivized.com helping enterprises fortune 500 brands understand what r d credits they can get for building and underserved areas or other incentives the government is offering hoping to break 500 000 a month in revenue this year as i look to continue to scale 50 customers today average price point caught 10 grand a month 25 on the team they've basically bootstrapped nothing actually nothing institutional i should say because they raised 4.2 million from a strategic as i look to scale maybe raising q4 this year we'll see what happens lawrence thanks for taking us to the top thank you nathan that was a lot of fun 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 back end dashboards their expenses their revenue arpu cac ltv you name it 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 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