OnBoard Meetings Revenue, Valuation & Funding (2024)

Introduction hey folks my guest today is perun Jada he is the founder of onboardmeetings.com he's doing this to inspire and able the best board meeting experience possible and finding Technology Solutions to empower that all right prone you're ready to take us to the top absolutely let's have at it all right now a lot of people maybe they haven't raised BC they don't even know what it's like to manage a board why is managing a board meeting hard great question um you know I like to say that there's often a board meeting that you have in mind uh based on your agenda and the pre-board meeting discussions then there's an actual board meeting that you end up having and then two days after the board meeting you realize there's a whole different board meeting that you should have had and this emotion is true for all CEOs every time I've checked and uh board meetings are hard because they're structured meeting um you know there's a lot of prep that goes into it and right before the board meeting your clearest about your business you know this is what's going well and what's not and there's new topics to be introduced and they often show up and the preciousness of that time to make all the calls to make sure you you're thinking through everything makes it a very tough interaction it's difficult to nail them and our objective is to help CEOs and Boards really get the most out of the investment by making uh the meeting that you had in mind the meaning that you actually have the mean that you should have had all be the same thing now when we chatted back in July or August of last year you'd study at Currently serving 3000 customers about 2500 Founders and Boards really using the platform and also a lot of government agencies and things of that nature too are you still about 2500 or have you grown customer base we've grown past 3 000 at this point wow and we're writing about you know um I would say about 80 to 100 customers a month that's the clip that we are operating at and we you know since we spoke last time we actually really got a chance to acquire a company called escribe out of Toronto uh and they are squarely focused on the local government uh you know so these are towns and cities uh you know and also Special Districts and schools uh it's a government-funded uh boards which that matches nicely that matches nicely the base you were selling into So when you say you're adding 80 to 100 per month right now new customers are they the same kind of customers you've been serving their school agencies their boards government folks they're all they're all board meetings and they're all boards that we are adding boards and committees and you know yeah we were actually right around 60 70 prior and with described coming in we are actually seeing you know most months clock around 70 80 to you know 100 depending on it's a quarterly a quarter ending month or not now you're our poo back then you said that these customers are paying on average five grand a year to manage you know two or three board meetings annually was e-scribes are proof significantly below your doors or were they more Enterprise than you or were they exact match same size customers they are actually higher so if you think of a city council there's often you know a much bigger number of people involved some more subscribers uh their uh you know average contract uh you know pre-transaction was right around 2025. oh wow okay had they learned about what was that because there were more seats using their platform were they selling more features that you hadn't built yet more seats and there was some technology that we really liked uh that has application in all board Pursuits that we have um I I like this you know uh you know this transaction mainly similar culture gives access to Talent they're based in Toronto primarily and then there were a team that was trying to get into the U.S market we're of course well entrenched you know uh a couple hundred people working in different cities here in U.S so we can bring escribe product to the U.S market and we've had tremendous success with that I'm sitting here in Laguna uh in a beach in California and uh you know we just signed up Laguna Beach as a customer uh you know uh two weeks ago so lots of synergies and you know Market expansion some access to talent and then certainly rounding out our portfolio in terms of covering all meetings uh public meetings uh you know these are the public sector meetings I should say and then with through onboard uh you know we're also of course doing private uh boards and then publicly listed companies and and then also non-profits 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 evaluation is there's many different ways to value a SAS business so the reason you're going to see three or four different valuations 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 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 and when you made the purchase of escribe how many customers do they have at the time they had about uh 400 customers and changed oh 400 I mean so so 400 times a 20 000 ACV I mean they they were like five six eight million in Revenue something like that yeah I know I would say you know just short of that but yeah that was sort of the revenue range you know they were in the five to ten million range but yeah I don't know the exact specific number this uh this time but yeah when did you close the transaction so you know since we last spoke we we raised money and then we actually really did this transaction around August September so we are closing in on one year anniversary of that and then we also actually divested there was a divestor that happened there was an intranet business that I've started long ago called Ensemble so we sold that off towards the end of the year just because it becomes slightly off-center compared to you know where we were headed what was that called it was called Ensemble on some on some like on like en SM Ensemble spelled o n but yes it sounds Ensemble exactly so it was an employee collaboration product and you know uh to quickly summarize we started with an employee collaboration tool pivoted towards board collaboration because the intranets uh are toughers you know uh Market the extra Nets really became very important especially when it comes to boards and you know uh or all the other folks that you work with so we pivoted in towards that market and then found a lot of success and then I'll be very described with all of this the focus had become meetings whether it's boards or committees or you know commissions and such and the intranet product really kind of looked a little off-center so we actually got it to the right spot there's a company called n contracts that actually you know uh was doing a roll up on various employee collaboration tools and that's where uh that team and that customer base is now gone was that a small sort of meaningless transaction or did it make you know more than a couple million bucks for the business when you when you divested no I think we sold in November that was a good time actually it was actually it was certainly you know um you know it was age figures it was actually a good transaction oh wow okay how much revenue did The Ensemble product have when you when you divested it Ensemble had um you know I I don't know if I'm um you know if I should disclose the revenue but it was actually the range was less than 10 million less than 10. okay yeah I'm still actually Bound by that contract I can't disclose the exact Revenue the reason the reason I'm asking is I'm curious how much of like your core you sort of gave up so I guess maybe a better question asked that doesn't get you in NDA trouble is um what percent of Revenue across the entire company did Ensemble represent was it 50 no no Ensemble much less Ensemble was you know about I would say 25 20 25 of our revenue and when we swapped our Ensemble for e-scribe we are actually you know further ahead so we you know Revenue run rate basis that was you know sort of neutral uh to actually favorable I think what we now have is it's like trading a player who done really well was not fitting well for a superstar that you can actually all get behind and build the championship team that's how I started you know marketed to my that's a great analogy now I am curious because when you last came on and you talked about the round in August of last year I believe that was a hundred million dollars secondary at a 400 million valuation right it was 100 secondary it was actually primary and secondary combined it was actually 100 Million Dollar Round oh I see okay got it so so some of that Capital was used for this acquisition some of that Capital was secondary some of that Capital accidentally went on the balance sheet somewhat secondary some for transactions some for operations I see I see okay uh I mean can you without getting into trouble here I mean less than 50 percent of the 100 million was secondary less than 50 yes significant transaction we had looked at this transaction while we were raising money we kind of knew that we were in due diligence with this team so this was sort of you know one of the drivers uh if you will so this gives us a chance to expand into a big market in terms of talent Toronto then it also actually allowed us to be full spectrum all kinds of board meetings like I summarized and then it also gives us a chance to actually expand quickly remember you know last year we were still in covered sort of you know um uh you know times which means if you had to add 30 40 50 people it's extremely hard to um you know recruit people while you're all remote so this was a good chance to find a team that can actually help us bulk up quickly since we were seeing you know tremendous growth overall what month did you close the escribe deal was August um you know so it's coming up actually that was still the hot hot hot time the market hadn't crashed yet what what Revenue multiple did you pay for the business you know share the revenue multiple uh but I I'll say actually you know there were some you know uh um I would say um similar multiples you know that market was actually really you know 10 to 15x sort of multiples it was a good Market um and then you know we got Ensemble uh you know sort of packaged and off to end contracts also in the same time frame and now we are seeing actually really sort of you know first year anniversary of raising money and doing these transactions all of that come through we're seeing our growth rate sort of justify all of that yeah while the the valuations were you know crazy in the valley you remember I was in the midwest you know still raising money from there and we I was conscious of finding the right partner not the one who's giving us the highest multiple but the one who had the best chance of getting us to sort of you know where I think would be uh the right spot for this business yeah now a lot of times when you're doing a deal like this the team has 58 people were they was escribe bootstrapped or was there VCS to negotiate with so it was actually really uh some angels but it was bootstrap yeah largely bootstrapped it's a very Capital efficient that's great was the majority of the deal all cash or do they now have a bunch of stock and on board no I think the employees actually you know they all rolled they were the you know the core group and actually really sort of in a deeper L1 l2's were uh vested and they got a chance to roll here and some of them cashed out because they've been invested for a long time I really like these transactions especially when I think about being a you know uh somebody who started a bootstrap business too you can only hold on to all of that for 5 10 15 years while everybody else around you is actually either working for big Tech where they're making big big dollars every year or they're seeing this in a short run startup Cycles this is a great chance to stay in the same business stay in the same Mission while you get to take some chips off so we saw a little bit of that uh you know in this transaction as well but you don't want them to take too many chips off because you want them to be incentivized to stick around and build the now combined business together so I mean can you share a little bit in terms of like what you know there's a total deal price of X which you probably can't share but of X what percent did you allow to be sort of you know cash check off the table versus stock in the parent company you know there was not you know a very simple rule unfortunately and I'm trying to form my own um you know uh framework around this but A good rule of thumb is you know you take half off and then you know in the new combined entity you're back on the schedule to get some more options so you are actually back in the western schedule now what people quickly see especially a year into this you know they clearly see is that you know uh the next this is a step function up from where they were earlier you know in terms of the rigors of planning the rigors of recruitment the rigors of you know just uh um you know uh Investments that go into sales and marketing and that's been the story if you ask me last one year we've gone from you know 20 30 people combined in sales and marketing to maybe 60 70 people that's been just in sales and marketing just in sales and marketing sales and marketing is actually become uh you know um it's U.S it's Canada it's UK it's Australia first of all they're four GEOS and then you know Chief Revenue officer joined us you know uh around middle of the year last year uh double the number of AES double the number of sdrs lots of you know folks in uh various aspects of demand gen and you know uh and partnership management all of that went through a sea change that's the big change and every employee whether there have been a you know a long time you know uh member or the ones that came in last year or two they clearly see that when they see the numbers that really look very different right yeah so what is that just for context What's the total team size today everybody don't team size is actually we're pushing you know 275 maybe at this point and when some wrecks open will definitely cross 300 before the end of the year still yeah that makes sense and then real quick just to go back to the escribe deal right so you mentioned you know them doing between five and ten million bucks in Revenue when you acquire them and you pay somewhere between sort of a 10 and 15x multiple you close last November on that so let's just say that deal price is right in the middle there like a 70 million all in what you're saying is you're totally cool having 50 of that you know or 35 million be cash off the table but you really want to have the other 35 million of the total deal price be you know the equivalent stock and onboard to build the thing long term together I I think that's the model that I would like to pursue going forward you know uh these can get actually expensive at times and you know the investors don't actually like the 50 50 model I was sharing with you there that as an operator who stayed in this for a fair amount of time you know if you're not a five-year run kind of a business and by the way we are in an evergreen business and this is a key difference some Pursuits are just going to be Evergreen 20 years from now somebody's going to be solving for board meetings I guarantee you 20 years from now somebody's going to be solving for employee collaboration if such Pursuits in the past we didn't really have a chance for people to cash in on some of what they've built now with subsequent rounds and some of these transactions I think it's an amazing opportunity that is afforded to early employees and Founders well it didn't really shake out 50 you know I was open to up till 50 for some of those you know uh uh discussions of course the founders have a lot bigger shares they they know they're building for long term and that's where these are top heavy plans often most of those folks took some chips off but didn't really take as much for the reasons that you cited they know it's going to compound into a much bigger uh you know number here as as they look at into the future prospects yeah employees who are sort of lower in the organization and they've been there for five seven years and you know it's okay for them to actually kind of just you know get that relief and then re-up for the next stage and to burn when you look at including the revenue you added from the escribe acquisition when nuclear Revenue growth over the past 12 months what percentage you hit so you know uh past 12 would be done Monthly recurring revenue it's across two Financial years I can tell you our goal for this year is to be actually accelerating in our uh growth rates so we will actually really end uh you know close to 50 growth rate for the year if the rest of the plan year checks out yeah which is now when you've met you know that's actually really sort of you know one of the key objectives that I had from you know this round to accelerate our growth yeah well I mean when you came on last and you talked about last year and again around uh August 2500 customers paying five thousand dollar acvs you are at a 24 million run rate then and if you added e-scribe revenue on top of that you've got to be probably either flirting with or past 30 million at this point is that accurate that is accurate and you know ending the year uh you know of course with a few big months end of the year accurately you know we could we could get to numbers that are higher than you know closer towards 35 37 and uh you know we'll we'll go from there we're also building the foundation for long-term success here this some of the go to market that we you know uh redone is it's keeping scale in mind and you know our goal is to actually sustain this for three four five years as we actually really sort of you know uh continue to um you know uh leverage all the you know opportunity that we see here some of the place that we find uh is available to us some of the talent that's actually becoming available uh you know uh with every step here yeah and look I appreciate how you've built the business you're one of the rare examples where I mean you didn't you weren't super Raised diluted early I think you did a five million dollar private Equity around on 30 million valuation back in 2018 but prior to that bootstrapped right it's completely bootstrap ran a profit for believe it or not 15 years and some of this math doesn't even make sense but that's how it worked out I had two partners early on and both of them actually worked very well for seven eight years we were taking dividends and you know profits and then we realized that one of the partners wanted to actually move on and the only way to free up the cap people is to buy him out which meant we had to start saving up and I had to take some debt and eventually you know he was bought out and then the second partner want to do the same how much do we own Equity how much Equity do you own that that was actually you know good uh more than a third of the company that was 40 percent well she bought Back 40 of the business when what year was that um this was uh 2010 to 2014 I think I was paying down that my other partner was uh you know a credit union that was my early investor and they owned about you know 15 of the cap table they lend me money to buy uh you know the equity from the uh the other partner uh here and then eventually they said could we be on the same plan could you convert My Equity into debt and I said I can do it if we get to reasonable numbers here as I'm you know still running a bootstrap company and eventually there came a time when there was no cap table there was just a single cell I owned all of it and there was some debt and I the first time we took Capital uh from five amps it was to clear out that debt and start thinking about growth again and that was a it's it's a Skip Hop jump method but you really do have a you know a wonderful sort of you know Journey now that you look back at it where early investors made money and then you bootstrapped your way to pay pay all of that off and then eventually took Capital to start thinking bigger scale and you know higher growth rates and then you actually go from there now it's m a um you know um and and you know building for the next uh you know uh the next phase of the business well Peru people can hear more of your story uh at counter 500 September 1st in Austin Texas we're going to dig deeper into all this charts graphs more questions it's going to be fantastic real quick though uh what your two two final questions here before we wrap up with the famous five what year did you guys pass a million dollars in Revenue do you remember and so when did the company launch uh January 2003 wow okay I love this long-term Focus consistent it's great it's my 20th year of doing this the the success here the secret here I should say is that I've always known that I'll be doing this and I still I'm still building it like I'm gonna be doing this 20 more years yeah I know if I can say this but you know uh uh you know not sounding uh you know um like I know how the future is gonna go investors will come and go if you find yourself in an Evergreen space keep building like you can own this forever because you just might yeah I love that analogy and prune you're managing your cocktail appropriately you have taken some dilution five million from five Elms to take out the debt 100 million dollar secondary to get the e-scribe deal done plus the divest Insurance Plus operating Capital but it still sounds like I mean you still own what 40 to 60 of business personally I I think substantial portion of the business and I still actually you know it's still you know Dodge the question he dodged the question all right I didn't know I have the question just because it's actually I I don't know what I should share or what the path on this is actually far uh uh you know um I'm ahead of what I had ever thought of that's what I love it I love that print let's wrap up your Famous Five quick answers number one favorite book um favorite book um I would say um that's a good one actually what's a good uh book that I'm actually hooked to right now uh actually you know favorite book would still be eating the big fish I think I gave you the same answer last time no you said good grape you have a big fish this is if you're a challenger number two number three go get them that's number number two is they're a CEO you're following or studying I am actually I you know I certainly like uh you know quite a few of the ones that everybody follows you know Tim Cook uh Jamie Diamond but this this time I actually went to Warren Buffett's annual conference and spend a couple days and really like the long-term value uh and mode based worldview that he presents and I find it extremely compelling number three what's your favorite online tool for building on board beside your own favorite online Tool uh I'm using uh favorite online tool actually you know I'd still say slack I slack just with myself so like all right modify we use teams for the company I slapped in multiple channels I'm having a great time just using it just on my phone for my thoughts love that number four how many hours of sleep do you get every night uh five to seven and situation married single kids married uh with a five-year-old one kid and did you celebrate her birthday are you are you 47 now uh I did celebrate about damn 47 now my wife and I have been together 20 years and the business has been going 20th year now and uh yeah it's a lot to actually continue to uh be thankful for guys there we have it bro I launched the business in 2003 broke a million in Revenue back in 2005. on tractor break caught 35 36 million this year they just did a big acquisition 100 million dollar secondary plus operating Capital plus money for that acquisition last year at a 400 million dollar valuation he's being smart with uh Capital allocation in the business they look so continue doing this for the next 20 years again onboard meetings.com help you run effective board meetings both follow-up and pre uh pre-event to make sure run smoothly prune thanks for taking us to the top you got it thank you so much for listening one more thing before you go we have a brand new show every Thursday at 1pm 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 our poo 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 2PM Central to make sure you don't miss any of that make sure you click the Subscribe button below here on YouTube their 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 SAS World whether it's an acquisition a big fundraise 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 nathanlacka.com forward slash slack in the meantime I'm hanging out with you here on YouTube I'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode and if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive I am on these shows but I do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that I appreciate your guys's support all right I'll be in the comments see ya

Introduction hey folks my guest today is paroon shada he's the co-founder of passageways now called onboard and he leads its business strategy as ceo he serves on the border on board uh big brother sister of greater lafayette indiana university from simon cancer center and tech point he was a founding member of you we can.org and as an angel investor in several technology companies today onboard powers over 12 000 boards and committees across north america emea and apac prune you ready to take us to the top absolutely pleasure to be here so how does this work how do you automatically build board decks you know the idea here is take an analog process of you know collecting all the different sections that show up on the agenda and automate that in a way that makes uh you know assimilating that information easier so we provide a platform that allows more collaborative board information uh building as well as you know provide an environment to get the boards to engage in a more meaningful way we feel board meetings are transitioning from analog to digital in fact you know through covet uh you know also to virtual so all of that provides a great opportunity for us to look at the entire process and streamline everything for the best results for the boards and what companies pay you for this uh to use this for their boards on average per month so you know uh on the lower end it's about 5k a year uh some larger clients of course you know fifty two hundred thousand dollars a year you know several six figure clients as well what is that what is the customer on the page the most don't name them but what do they pay you what's your highest acv uh 170 000 uh you know you can imagine big hospital systems university systems where there are lots of different boards and and what enables you to drive up that price point do you upsell based off number of seats number of people on the board or is it feature upgrades or something else yeah so our uh it's usually the number of entities so think of a big large corporation lots of subsidiaries lots of acquisitions that they've done that entire governance structure uh and providing oversight of that we have built a platform which allows you multi-board access and that's how we drive up the cost it's number of users and and then there are suites so for every board you may need different set of you know software uh packages as well and then what is in the software did you have to basically rebuild zoom from scratch the whole video infrastructure are you licensing okay yeah so how what's the software i'm glad you asked that question so the the general idea is you know board meetings are a legal record you know they can always end up in discovery so the goal here is to give you a chance to build the board information really well and use as much of the plumbing that the internet provides as possible so single sign-on using octa or one login integration with zoom integration with you know all the different document management systems and video chats and all of that that's all built in but our goal is to give you a secure way to uh you know provide information distribution to your boards and all the underlying committees as well by the way there's a lot big committee structure often that comes with the board and then running the board meeting um in a way that the platform stays in the background you're discussing what's important what's relevant to to your board meeting and then also thinking about how you can get very smart about it so analyzing the you know engagement pattern if we publish your board book five days in advance this is how much time people took to you know to study that what if you change that to seven days looking at that analytics and then all the other uh pieces that come along with uh you know board interactions so board assessments uh dno questionnaires that have to be filed by uh you know public companies uh any action uh you know minutes and and voting all of those different pieces they all stay in one purpose-built application which is not just secure also limits your liability in case there's ever a lawsuit that's filed it's all in one contained system okay the software is clear to me i understand people pay for this now how many customers you have paying Currently serving 2500 customers uh we have about 2500 paying customers uh on the onboard platform we also just acquired a company by the name of escribe they're in the public sector meeting uh you know space so think of counties and cities and you know government organizations where there are a lot of open meeting laws they are focused uh you know they're based out of toronto uh focused on canada and u.s for the moment but they also have customers in australia and new zealand as well was that was there cash involved in that deal or was it mainly stock oh that was a cash deal as well oh wow how did you decide what the price was for that was it sort of multiple on revenue or something else yeah so we just took funding uh nathan so jmi invested in passageways there was a valuation on the table we'd done the due diligence on the space this looked like another company which is relatively similar to us uh and you know high growth so similar multiples that you know apply to our deal i guess what was that can you mean rangers and like 5x ar 10x error or something else oh 15 to 20 a.r.r yeah you know 20x multiple okay and you just mentioned you raised capital to help fund this deal Raised when did you raise capital last uh about two months ago we raised 100 ml 100 million from gmi from gmi yeah interesting okay and we're getting ahead of ourselves a little bit because i want to get a bit of the back story when did you guys launch so we launched about uh nine years ago um on board product and currently i have we are adding about um you know 100 or so customers between onboard and escribe every month so there's a lot of recency to our momentum 2500 customers but a good 1500 of them have actually been added in the last you know 18 months and we are coming in you know we are still picking up momentum uh can i improve can i do that math can i take 2500 customers times that five Monthly recurring revenue thousand dollar acv i mean you guys are doing about a million north of a million a month now correct our acv you know across you know if you look at everything is uh you know closer to 10. i see so you're doing more than two million a month in revenue yes yeah okay very cool when can you break three million a month what happened this year in revenue so 36 million dollar run rate with some luck it'll probably happen you know q4 q1 of course there's luck involved in all of this uh certainly uh the goal here is to you know we are uh the highest ranked application in apple's uh app store g2 crowd captera every single online review the best board software that's available in the market up against some legacy providers so i don't see any reason why this will slow down any time so and if you're at about two million a month right now in revenue where were you a year ago so we can calculate growth oh we are north of 50 growth for uh you know now four years in a row of course it was you know uh more than 100 growth four years ago but we continue to stay north of 50 and the goal here is to continue to stay at that pace uh for the next three five years you remember what year you passed a million dollar rent rate oh that was a while ago this is a tale of two products but for onboard may have been um i would say uh 15 2015. yup okay makes a lot of sense there so so obviously nice growth let's try and unpack this growth for a second is there a sales model how many sales reps do you guys have so we have uh i'm gonna talk just about onboard that's the most relevant piece um you know between aes and sdrs about 35-40 people how many carry a quota uh 15 or so and how do you set that up a lot of founders struggle with this what's the quota on target earnings ratio so um the the well you know half a million is a good way to think about it you know we go by sas uh industry standards you know uh but you know um people are selling in the enterprise segment of the market you know obviously they carry you know different quotas than people who are more on the transactional side smb site when you say 500 000 that's the quota target for you'd say as a good average that's the that's the average quota that i have in mind and uh you know again uh uh you know varies by individual in the experiences and the sectors that they serve and with this sales motion would you credit most of your growth to this or is there something else we're missing here no i think this is great actually this has been big part of the story uh you know there are some partnerships go to market partnerships we've tied up with you know vertical partnerships these are people who are well known there's some exclusives involved here icba which is independent community bankers of america agb which is you know the the organization that works with universities uh and so on there are several such partnerships but we also have on the lower end of the market there's a trial led product led sales motion which is sort of you know a self-serve aspect which is sort of you know the sub five thousand dollar deals how many new trials per month do you see happening right now about 150 and then you convert about 50 of those into into paid is that right uh we are right around the 50 to 60 range but you know a lot of those trials are qualified for uh you know um there's a you know demo and all of that that lines up later so um pure self-serve is probably a lower number uh so it's a it's an aided uh trial is what we do now one of the things i love that you've done is you're not just chasing like more money like like you see these people raising every 12 months they're getting diluted like crazy and then they have to exit the vista at like a silly low valuation because they lost all their leverage you only raised i think before 100 million 5 million in 2018 is that right that's right so been very you know careful about this just because we wanted to prove product market fit and repeatability you know coming off of last year where we had good 600 plus sales in a single year this was a great time for us to go raise a serious round and really build for the future and what when you raise 5 million what valuation was that at in 2018 that was at you know 30 mil so this is you know we've done uh you know quite well in the last three years are you passed a half billion dollar evaluation at this point with the 100 yet but you know we are working towards it no i think that's that's the goal by the end of next year maybe you know next 18-month goal would be uh half a billion months you're a smart guy you're not going to give up 100 million worth of control without taking some sort of secondary how much of the 100 million was secondary to you or other early employees or investors there were some involved that wasn't the focus there was some acquisition capital and you know there's some liquidity i've been doing this for a while but you know earlier investors but most of it is accurately for building the business okay i mean can we quantify that was more than uh 80 million going on to the balance sheet of the business and less than 20 years less than that but you know those those details are not uh not been shared yeah okay it's valuable information though a lot of people don't realize as a founder when you hustle like you've done this is a great way to create liquidity especially if you're doing like a big private equity round so so nice job there hey we're out of time this is a great story we want to keep following you let's wrap up with the famous five number one favorite business book uh favorite business book uh good to great is pretty awesome number two ceo you're following or studying um i'm an elon musk fan all the way uh not everything he does i follow though all right number three favorite online tool for building your business besides your own favorite online tool uh i'm big on loom these days number four how many hours of sleep do you get pruned uh going by the dark circles that you can see right here maybe you know six is a good night all right and situation married single kids married for last 20 years met my uh wife uh in my engineering days how many kids any kids uh one kid four year old so we got a late start to it wow okay one kid and how old are you so i'm 46 46 take us home something you wish you knew when you were 20. i wish i'd uh you know uh lots of things so that that threw me off there um i wish i knew the value of uh building uh the organization with culture as the central point guys there you have it on board meeting dot com it goes on onboard meetings plural.com they just passed uh call it uh two million dollars a month in revenue that's up from 1.2 million a month about a year ago so over 50 growth in the past several months they passed that million dollar runway way back in 2015 and he's done this in a capital efficient manner just five million dollars raised prior to their most recent 100 million dollar round flirting with the half billion dollar evaluation we'll see what happens over the next couple of years karoon thanks for taking us to the top thank you nathan 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 pm 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 sas world whether it's an acquisition a big fundraise 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 nathanlacka.com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode and if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we 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Nathan's introduction to today's show hello everybody my guest today is paroon shadow he's passionate about building collaboration software that inspires and enables teams they're building the best board meeting experience through their onboard product and the most versatile employee collaboration experience through their employee portal solution called on assemble their teams are uniquely focused towards customer success and meaningful uh innovation they're based out of lafayette indianapolis london toronto and he lives in chicago prune are you ready to take us to the top absolutely hi guys so the company is called uh the company is called passageways and it sounds like you have two separate products they're both sas companies i assume Why Passageways has built two products for enterprise collaboration they're both sas products onboard is for board collaboration and ensemble is for employee collaboration and which one came first ensemble came first we've always played in the enterprise collaboration sandbox and we went from employee collaboration to could we actually keep going and the next adjacency was management meetings and then board meetings interesting so do the same let me ask you do most companies start with your ensemble How they have cross sold to most of their products product and then you upsell the onboard product afterwards or these are really two separate customer bases they are actually co-mingled we have a lot of overlap but there are several most customers have one product interesting okay but we see more and more overlap okay so just because of because it's such a short interview i want to dive deep into one of them which one would you say is you spend more time on which one does more revenue what's more exciting i think the board product is a great product to really talk about because most of the Why they launched OnBoard in 2013 audience is going to be ceos running companies talking about raising money and you know uh been board meetings okay let's do that so so on board so this particular product uh what year did you launch it in we launched it about four and a half years ago okay so we'll call it what 2013 2014 yep okay and uh and help us understand you know who you're catering to so i assume are the board members the investors paying for this or the company pays typically typically it's the company that pays uh the product itself is to remove the communication friction between information that the management team pulls together for often monthly board meetings sometimes it's not monthly uh you also have quarterly and all other variations available typically the software is used by you know people who pull together the board information um general counsel uh cfo ceo all those folks and then this information is made available securely through an online portal that's also available through every mobile app mobile platform like tablets and uh iphones and such and that's where board members and you know anybody else you know this could be auditors this could be you know your counsel that are outside they all have access to the information depending on their permissions and on average i'm How the average customer pays them $7k annually sure you have a lot of different customer cohorts but just for the second time on average what would you say the average team kind of pays for the software uh you know you could get started for uh about five thousand dollars a year uh it's per user uh but our larger customers about fifty sixty thousand dollars a year okay would you say maybe the average is closer to five or closer to fifty uh the ascb is like around seven eight thousand dollars oh okay fair enough so that's pretty typical by the way right you have a long tail kind of smaller and then you have you know a couple bigger ones that make up a lot of your revenue yeah that makes sense good um walk me through kind of the the the back story here so you launched the company in 2014 what was your background are you kind of ex-legal or x kind of board seat holder or why get into the space absolutely so uh when i graduated from purdue in 2003 i started the you know the ensemble product line with the team that we put together in lafayette indiana and we got really good at secure collaboration and communication in the enterprise space right around when the you know ipads came out which is you know april 2013 we saw that the boardroom access to information suddenly became very attractive on an ipad and everybody was trying to think about how what's the best way to dish out this information that's when we started the journey towards the boardrooms i started this company in the purdue dom room and it was good to see us actually get into the boardrooms eventually now we have some of the largest customers in the world using our product including some you know very uh amazing non-profits uh a supreme court in a country is using our product some of the fortune 500 companies uh some of the biggest banks and hospitals using our products so it's it's been actually really a gradual journey where we first learned enterprise communication and collaboration and then we nailed the use case and at this point i believe from everything that i see we are the most tech forward board room solution in the market okay and and try and quantify all this for me How they've grown to serve 1k total customers so this is four years and how many customers have you been able to scale to today uh we are talking about more than a thousand customers at this point okay okay i mean yes obviously fairly aggressive that's a lot um and what's the what's the process look like i mean how are you landing these customers do you implicate an inside sales team strategy or outbound or what it's a combination so most of it is you know about two-thirds of it is inbound and one-third is outbound outbound does have an sdr uh you know effort that we put together uh the teams based out of lafayette indiana and we also have sales offices in other areas including you know the names that you mentioned canada and uk being the main ones most of our sdrs are actually based on Why their team of 100 employees is based in Indiana, Toronto, and London lafayette indiana okay and what's the team size today uh we are right around 100 people at this point and in about 15 sdrs sorry you cut out their 15 sdrs [Music] yeah that's right and how many how many account executives does each sdr support so we have almost a one-to-one ratio on the sdr to aes and how do you structure how do you structure kind of their incentive plans is it around number of demos per month number of calls per month what is it yeah so the str's have to generate you know an x number it's between 10 to 20 sales qualified leads and they get qualified when the account execs actually accept that opportunity interesting at that point that's monthly that's monthly so on a monthly basis if you can generate about 20 sales accepted leads uh you know you're doing pretty good we win about you know 25 30 of our you know opportunities uh it really gets into definition how you uh define what's a win is for us if it stays in the pipeline for more than four months we kick it back that's great that's interesting okay great so 100 people 15 to sdrs they've got to get caught 20 sales accepted leads that gets accepted by the ae uh then i assume that moves to a demo and then obviously they're closing actually there's a often a trial and then closing but you know sometimes the in-house team and the corporate council often does a trial and then the management team or the board meeting may actually see the product in action uh every now and then you have a couple people who want to watch a demo yep of course and then um have you done this bootstrapped or did you raise capital uh bootstrapped all the way till you know we got to the point where we really saw that you know we needed to actually play for growth uh so i just four months ago we took some capital for the first time actually you know right after uh you know we got to about you know our main milestone was to have the visibility to 10 mil and right then when we raised money so that now we can actually you know essentially take the product globally Why they took on $5M in outside capital how much did you did you decide to raise an all-in at this point we are you know we have about five mil on the balance sheet uh but there's you know obviously some line of credits and such that are available after this did you do any venture debt as well or convertible notes or that's all just five million equity it's equity raised equity got it in terms of visibility to 10 million i mean we can kind of do math here a thousand customers at that 7000 acb puts you at Why OnBoard is doing $7M in ARR today about 580 grand per month or 7 million in arr is that generally correct that's generally correct for one part of the business yeah that's just one house yes yes yeah yeah so that's how that's where the basic math actually may fall apart but yeah we our goals you know the board product line is you know uh with some luck we How they have grown 65% year over year may actually be growing 100 next year that's what we are shooting for what was growth like okay so if you're doing again we're just talking about one side of the business right now the board product if you're doing seven million ar today what were you doing a year ago [Music] uh we grew about 65 70 this year uh i think we're right around uh you know 3.5 okay got it uh 3.5 million bucks an ar a year ago yeah okay well that would i mean if you're now seven million that'd be 100 year over year growth no i'm actually like i said you know the difference is the arr numbers which is the gap revenue numbers but we did grow 65 70 this year that's that's the ar growth that we saw yeah so just be clear then if we go back a year again i'm just talking about ar not gaap cash receipts annuals upfront none of that stuff go back a year november 2017 and that period you were doing about four and a half five million Why they have scaled from $4.5M in ARR 12 months ago in ar grew 60 70 to where you are today for the board business absolutely right yeah again the whole interview we're only focused right now on the board business um okay great and then what year uh what year did you launch the the uh the kind of the team management business the other side so the team management business is our legacy business we've been actively doing that even though a portal is a portal is what we've realized almost all elements of the communication between the board members and the employee collaboration are exactly the same we launched that in you know back in 2003 okay and we we do have uh uh 350 customers enterprise customers using that product oh that's great um How OnBoard is hitting 109% net revenue retention with 3% gross revenue churn annually focusing back on the board project here for a second churn is critical in any sas company what is your churn today actually we have been very fortunate with that our churns uh you know about three percent our dollar retention rate is you know um at this point i think we're ending the year about 100 and 809 percent okay 100 net revenue retention yes and when you say three percent churn that's three percent revenue turn per month or per year per year okay three percent revenue turn per year which means then you're expanding 12 to get to net 109. that's great that's healthy where's most of the expansion revenue coming is like number of board seat members or what pricing axes do you upsell against i think we we we see a combination of three we see some new licenses subscribers being added because of you know just boards expanding uh we also see some more committees being added so you often have an audit committee or finance committee coming on board and then you certainly have uh you know the upsell on the packages we have three packages you know uh essential professional and enterprise so we do see people actually just you know graduate to the next tweet that's great and you mentioned earlier your average acv was called seven grand so how aggressive are Why they are willing to spend $7k to land a new customer you going to get that customer what's your fully weighted cache on that account we you know at this point uh you know we're spending about a dollar to get uh you know about a dollar an arr okay so about seven thousand dollar cac to get a seven thousand account yeah yeah we are pretty aggressive you know we uh we're doing multiple things as soon as you get into global expansion your tax sort of gets out of hand so why is that your catch you do have a lot of overhead to setting up an office and you okay you know setting up new payroll a lot of legal costs that are you know one-time costs and then you certainly have the same for every country you go into you're establishing new marketing channels and all that so i think the costs are eventually they get caught up for the moment we know that we're there's no way we are uh you know same unit economics in our other geos you know us is obviously fueling all the main growth but we do see uk and canada being actually uh big engines of growth going forward yeah and then when you add up your kind of your whole business so look at your entire business over the past 12 months what percent would you say the board kind of product is How their overall business is doing $11M in ARR relative to your old legacy product we are two-thirds of the product of the revenue at this point is uh you know is uh you know projected to be bold product by the end of the year okay uh and one third is going to be our employee collaboration product okay got it so i mean if board today is doing seven and that's two thirds if we add another third so that puts you at what 10 or 11 million total are by both products is that accurate that's the projection that's what we're shooting for yeah okay well yeah i mean you gotta you must have a good idea you got about 30 days left i have a pretty good idea but you know uh what is interesting is most of my customer base is financial and the seasonality is off the charts believe it or not between now and the end of the year i'm going to do 40 of the year's business yep that makes sense 40 40 of the year's business because there's a lot of budget flush that happens at the end of the year these guys are planners uh you know and about 50 of my business is coming from the financial services industry yeah the other other verticals like healthcare uh you know are similarly seasonal uh but there are some businesses which are not seasonal for example nonprofits and higher ed they tend to be not seasonal high rate is seasonal but you know they are centered around the academic year rather than the financial year yep all right peru let's wrap up here with the famous five number one what's your favorite business book The Famous Five uh right now i'm really digging principles uh by ray dalio number two is there a ceo you're following or studying right now i love elon musk but really as far as studying i really love ratan tata which which company it's tadas in india what's the spell the company t-a-t-a tata oh ta is the company okay uh very good and then number three what billing tool do you use for your company uh we are still using uh books oh quickbooks wow okay number four how many hours of sleep to get every night i've been trying to get you know close to six recently you know i've been uh short on sleep i have an 18 month old at home oh wow how many kids just won just one and married and married yeah yeah you not the kid all right uh and prune how old are you uh 43 43 last question what do you wish your 20 year old self knew i wish i knew the value of having a really well-vetted and close-knit leadership team guys there makes all the difference it does have a close-knit leadership team again you guys heard it here launched in 2014 basically a board management product hyper secure share the board decks mobile tablet makes it easy typically people that are paying for the cfos the cros the ceos on these companies that are preparing the deck they've got over a thousand enterprise customers paying on average a cv i call it 7 000 bucks so about 7 million bucks right now in arr growing 60 to 70 percent year over year they've raised five million dollars to date three percent revenue churn per year that's gross they add back 12 in expansion so 109 net revenue retention annually spending a dollar to get a new dollar in cash so healthy payback period there of 12. team of 100 people based in indiana as they look to continue to scale peru thanks for taking us to the top absolutely thank you nathan