Signix Revenue & Funding (2024)

this is the top where I interview entrepreneurs through our number one or number two in their industry in terms of revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per top five in six players he's had bent on global domination we just blow Khan a hundred thousand units bull mark and I'm your host Nathan Laska this is 685 coming up tomorrow morning I talked to Danny Golan they raised two hundred and twenty five million dollars further and really he's a very intelligent guy his data focused Israeli fighter pilot and his company is called a common REO it could be the next tech IPO good morning everybody my guest this morning is Jay jumper he's the founder and chief executive officer along with president of a company called Sinex as a highly regarded entrepreneur Jay has worked to establish the company as a leading cloud-based digital signature signature solution a very hot space which we'll get into he has more than twenty years of financial services and technology management experience additionally Jay graduated from the University of Tennessee in 1985 with a BS in marketing Jay are you ready to take it to the top uh-oh okay very good so the electronic kind of document signing space not only is a very fragmented it's extremely competitive where does sinx fit in that world and what's your business model how do you make money well we're a very different and a couple ways so we're the only cloud-based digital signature company in the u.s. or North America everybody else is AV signature solution so we're very different fundamentally we Co we review ourselves as the independent East signature solution so Jay what does that mean we say cloud-based versus electronically signed you know dumb that down for me okay so I actually have a visual how great look at this look at this so as you might can see yep this is a document yep and so what electronic signatures do is if you can see in this document there is an over light so I took the documents in a clear way and what a signature does is they really put a a a signature in the overlay they don't put anything in the document so if I came to you and I said you know make it I'd like you to sign this document well why don't you sign this clear overlay don't sign in the document sign in the clear over light you kind of look at me like you're doing right now like a lot of sense this is a big liability is what you're saying it's not a real con it won't hold up in court well it will still hold up in court it's just that you're dependent upon the e-signature vendor being around forever and always to validate that signature that this this all this is on this overlay is a hyperlink back to a software provider Oh interesting so like when I sign with DocuSign I see the little stamp that says signed with DocuSign with a little weird number that's really what gives it the legal teeth and what you're saying is Nathan if you do that you're highly dependent on DocuSign a hundred percent all right you're right I got it so if I use you guys sign it's you're going to actually give me a completed copy there's no overlay it's a hard copy that'll hold up in court I'm not dependent on you we're going to with with that particular company and all the other Isan companies you have a dependent signature your signature is dependent upon that vendor being around forever and always right yeah and so with us we're going to give you document and we're embedded in the document every signing event we're going to be digital shirts vigil for tickets embedded in the document totally understood yes sorry so how do you which in what's your model are you is it fast based or how do you charge it's all it's all a size based model okay so we we took the infrastructure that's been around for about 50 years called PGI technology public key infrastructure technology and we took that to the cloud where other vendors may have focused on ease-of-use early on we focused on secured it we've added ease-of-use and we find other e-signature companies trying to add security to the module but you know it's very it's much harder to do than adding these abuse and so what is the give a sense of kind of how you charge what's the average customer paying you per month and what did that customer look like typically made of middle-market enterprise etc well a lot of our business where eighty percent of our business is really sold through software partners so we'll private label will partner with software partners where we enable them to help capture the e-signature market that's sitting on their software so if you're a software company that you know has I'm just trying to think has 10,000 customers and you can get $250 you know they're sitting there with about a two and a half million dollar market opportunity with their existing customers so we we allow them to probably label our solutions so it can be rented whatever their product is this is like McDonald's has the hamburger assembly line figured out you can go by to document signing McDonald's and make it your own business that's right fascinating interesting and now what kind of sales do you get from the vendor that you white label - what we do is we did a revenue share with them okay and so they participate in the revenue we get so we give them a very robust highest level Compliance digital signature solution that they don't have to go spend millions and millions dollars trying to build and they can have a private labeled so they feel comfortable when they're going in highly regulated industries it beats and exceeds the requirements needed for those for those industries so whether it's the 20% that you're selling direct to other businesses or it's the 80% of you know the vendors doing the business for you to other businesses again what's the average customer paying you guys I mean are we talking 100 bucks 10,000 a month well I mean we don't get it our pricing is on our website is basically $240 per seat and I gets you 240 transactions per year okay got it now do most people to stick on that or do you have a robust kind of inbound sales team or expansion revenue is critical our emphasis really in supporting the partners so we want to help support the partners as they sell to their customers Tilley understands where a lot of us where a lot of our emphasis and sales resources are we call them McCullen farmers so we're helping farm we're helping our partners form their customer base - a big challenge in this space that I've talked with other people have done a white label strategy that's 100 million dollar plus level is trying to put prices in place where individual vendors don't undercut each other on price how do you set ceilings and floors on this to create an equal marketplace so when we go into a particular industry we tried to match pricing based upon an industry so the pricing and industry may be based on a price per register investment advisor or Broker Dealer and that will be different than the pricing in banking which may be best pond and banking it may be asset size or credit union may be based on members so there may be so we really work on industry and we standardize that pricing so whether partner a or partner B is you'll get the same pricing whatever industry they're in okay got it so it so are you doing some level of professional services work when you sign up a new vendor to customize the sign X technology for their specific niche well we have very robust API and this is really kind of the core of our business early on what calls we weren't doing this really kind of overlay type solution we actually had to consume the document and insert digital certificates into the document so early on people had to integrate into us so we have we've created very robust API so when you're working in within a software there are messages going back and forth and the software user never knows all this is going out and then one of the key things we have is because everything is embedded in the document we have the ability to delete our copy of the document well if you're if it's a dependent e-signature there is really two always a minimum of two copies one that the event that the company has and then one that's off work up the e-signature company has because they have to maintain a copy of that be signature and as we get into security and communi risk having an extra copy of your customers form and data at some other place other than your own creates a lot of liability for companies that they made up they have not thought up why are they doing music these are not stupid people right I mean is there right signatures the Dobies are huge companies that have solutions in this space that use a different text ax than what you articulate why just more difficult to do what you're doing if the engineering cost is higher it is much more difficult so it's kind of like I'm creating here when they created the car they focused on ease of use which is great because early adopters where I want to be able to just sign any document anytime we focused on security in PKI infrastructure and then we added we added these abuse and what do you say in terms of in terms of team size Jay we're around 50 okay and at what percent how many of those folks are engineers about about third okay and we're you guys bass we're in based in Chattanooga Tennessee oh good great we have remote employees all over the place and then take us back ten-second understand sighs now take us back to when you launched this what you're to create this company in repeat that question more time what year Jalan to the company in well we actually acquired the company back in 2002 I had another financial services company which I still run and manage and own is that with the Cree actually bought it's called pro and best PR o & B est okay it's a basically Robo advisor in the financial services industry and so we bought this technology back in 2002 for pro invest and then really split it apart in 2008 okay and so and so we really bought it to really address issues we were having and needs we needed in the marketplace so which of these companies in terms of revenue is now bigger for you or your advisory firm or the document signing sigh next signing but by a lot I mean clearly yeah I mean good good good pacing both of them are doing very well growing very well obviously the market for e-signature is you know very large as you as you are learning yeah I mean you did it I want to get in your brain because you you were basic you did something that's interesting which is you were running a business that had a need for something and you realized oh my gosh that need is so big I should go play in that space by acquiring a company that's like a brilliant way to go into any new business but I want to understand what gave you the confidence while you already had your advisory business cranking out revenue what give you a confidence to go in and shift focus to buy this other thing and then scale it I mean how did you make that decision yeah so one of the things because what Pro invest does is we provide managed accounts in the 401k marketplace and our customers are oil and Kei providers well the demographics were so that in 2007 the I remember since 2001 2002 2007 flows in 401ks were going to become negative many more people were taking money out than are contributing so you know Nathan's retiring and he's taking out his half a million dollars what it takes a lot of us to contribute to make up for that half a million dollars yep so we really wanted to toolset to work with our our fallen K providers to help them retain those assets through IRA rollovers and it was a very paper intensive process so we wanted to be able to offer a way for to help them retain those assets through electronic signatures and so I own the company ended up becoming a customer how'd you find them by the way they actually called us and what did that cause sound like I mean were they saying hey we're about to go under bias well it was yeah I remember as the dot-com bust yeah so they were struggling they needed some capital you know we looked at it pull invest initially invested became a very large investor in the company would enter a large J how much did you invest slightly under 50% 50% of what extent accompany slide you know you own a man very personal company yeah echo and then there was an offer by a third cup by a publicly traded company to buy the company very shortly after we made our investment and they never did fulfill their obligation and we stepped in and bought the remaining part of the company don't name it don't name the company that made that offer but what was the offer what was the price it was about five times what I paid for okay do you guys well five including the fact that you only pay for 50% of it yes so I would have been my return would've been a 5x return yeah within six months and and what give me a little bit more history on the company did they raise a bunch of capital before but I mean obviously they raise from you but have they raised from other investors before you I think I'm sure they had and they end up selling to a publicly traded company and I want to get into all that and get into a lot of history but they would did it sold to a publicly traded incubator and as you can remember what happened in oh one you know it's great to have a dot-com but you know in o2 I need to have revenue and so when you have a lot of comms that are just getting their first customers they don't have a lot of revenue have a lot of overhead expense you know it creates opportunity for what we did so if this business was was doing so poorly why'd you make the decision to invest in it in the first place well I saw a need in our company I saw native Pro invest so I needed across the marketplace I knew it was not a matter of if it was a matter when this market was going to take off so we really bought the company in house incubated it during the times when we know when people were still trying to well you know trying to prove that there's a use case and accept it's free signatures and what is not still bullet good well I was going to say Jake this was over I mean this is a long time it is over what 15 years ago over a decade in your sense of company size when you purchase it I mean were they doing more or less than a million dollars in ARR yes waylynn many dogs but they had they had two customers oh wow okay so they had spent a lot of money on the technology it sounds like but they were burn them through cash like you wouldn't believe and you're going crap we really need this I'm going to invest to keep it afloat and if it sinks I'll be the first up the table to buy it correct and so so we bought to take that technology kept the key engineers and you know brought them on board and we really kept it in and just continue to wait and support as this industry has continued to grow and adopt which we're obviously now in a mainstream adoption process right now yep so fast forward you go from to customers in 2002 how many customers are you serving today uh six to seven hundred thousand okay and is that is that individual companies using you or seats inside of companies a common combination of both okay but yeah I remember when we go sell to a particular software partner they sell to you know you know their customers and then their customers may have you know 200 to 500 mm seats within that you know within within that company and you said you you're sorting did I hear that right 700,000 on the tests level that range yep okay and I mean you mentioned earlier your your your per seat you know minimum was 249 bucks I mean am i doing the math wrong if I take seven hundred thousand times 249 that's a huge company something's wrong with my math well obviously we don't get into to revenue says dunk into the revenue but tell me where my math is wrong because I'm just using your numbers well that's our if you bought one see license yes that's two hundred two hundred forty dollars if you come by two hundred thousand see licenses I'm not gonna sell it to you two hundred forty dollars right okay so you go you give a pretty I mean it must be a pretty significant discount then if you're doing Gillian we give a discount we really work with the industries and the partners to help them understand and understand the market you know you can't go work with a software company I'm just I'm just using this example that charges twenty thousand dollars for the product and say well your e-signature products going to be fifty thousand dollars yeah you've got to work with a software company to figure out how to price a product that's that's right for their customers yeah you know that makes total sense to me but I mean I just want to illustrate how large I mean because this is an important thing right people doing large enterprise sale that volume with are thousands of seats understanding the kind of discount I think is important because that it's kind of a landing grab approach I mean if you drawer full price is seven hundred thousand seats times twenty forty nine bucks you're looking at like 180 million bucks a month right a month which is like crazy so it must be a very very significant discount on 250 bucks to seat to some of these folks unless you're just a massive go buddy that's 168 million total not for a month I wish I like you're blessed I think wait why is that so was the our point number you gave me of 250 that was an annual not monthly yes okay then will they a little more I'm going this guy's like this is like a multi-billion dollar a year revenue company unless I'm doing some kind of math wrong okay that's under $49 ARPU number ISM is is annually not really yes Daniel so you're right yeah that would be 180 million in a are a little more generally more reasonable where what a great thing that you're aware you're some competitors I'd you know how we don't have no idea we don't we don't we don't we don't really focus on them because we're such a we're such a different product and different go to market strategy we're focused on our partners and and their customers and they go drugs consumer yeah they go direct to consumer it's just a very different market we are we're in a land grab as you know right now is the industry and what we tend to find is we want to we want to go pick our industries random we want to go find the top software providers in those industries and want to partner level to let them bata ties the e-signature solution walk me through that how do you do that how do you find how do you what clues do you look at for a new potential partner Steeve it's going to be a work or not um well first of all to guess see where they are in positioning their role in the cut you know in the industry you know you know one of its we-well publicizes zip logics simple odd East is the largest residential real estate software company in the country and so we're partnered with them and private label to our solution is called digital ink and so we have a very large portion of the us real Realtors that are on our network they may have not ever heard of sine X but they've all heard of digitally yeah and you don't mind that you don't mind being behind the scene so as long as as long as you're making some cut of the sale right that the vendors make in try now is this right is this like a typical affiliate agreement I mean most companies that do this kind of thing it's like you know you know the vendor keeps 70 percent and the infrastructure like you keep 30 percent I mean it's something like that is the average cut no nowhere near that it's because we're giving them so much we're creating a product it's not like a reseller I mean this becomes embedded and is a-ok a key feature of their product still I mean should I flip that you're keeping 70% they're keeping 30 is it somewhere around there yeah you know we don't get into the splits but that would be it's more reasonable to assume that assumption than the other is that neither reason you're probably in it specific splits because you probably it's a negotiation every vendor right so every vendor is a little different right yeah makes right makes sense and it's based upon by based upon volume so the more volume that they do they're greater percentage of revenue sure you do yeah makes perfect sense awesome let's G let's wrap up your men with the famous actually let me one last question a zero after you acquired this I assume you got the money to acquire this just from your own cash flow from ProAdvisor right go invest your own best sorry have you raised this from capital just for for sign X or if you just self-funded we've got a lot of stuff funny but we have raised outside capital o how much don't get into that but it's but it's non figures okay while she wakes me up a figure screaming okay eight figures so called between ten and nine and nine million somewhere in there yeah that's pretty that's pretty significant why did you make the decision to do that instead of just keep self you know self funding co-invest just wasn't didn't have that I mean it couldn't it wouldn't I would didn't want to take so much business out of pro address to you know to Kent last protest to continue to fund Sonic's we've been the largest investor and Sonic's up until now and will continue to be but it you know in order to capture this market opportunity we needed to bring in outside investors got it that makes sense I mean just just to be clear this is I think completely inaccurate information but when my team did a research on this it looks like you guys love the last on the funding was in August 2016 it was a six million dollar round that was a venture round and then he had launched Tennessee to a series a in January 2016 but and then got it all if you've you know call it there's about 14 15 million bucks in the company is it right to assume that somewhere around accurate or am i leaning more towards 80 90 million I would say it's not it's closer to that I mean but we're not yeah we're not for the 90 main dollar we're trying to be very capital efficient yeah and how we deploy capital we're not out trying to educate the market we're trying to work with partners and help them promote their solutions because I get asked all the time needs and you hosts all these interviews hundreds of them per month how do you do them efficiently and guys the answer is simple people always agree to my calendar back-to-back meetings I batch my interviews today very efficient and the way that I do it is I use a tool called acuity scheduling at Nathan lattice calm /schedule and the reason I use them is very simple they keep my no-show rate very low because they send out reminders about when the interview or the meeting is coming up and also they make it very easy to schedule time right that's go back and forth via email 10,000 times with people I'm trying to meet with inmates elected Tom /schedule helps me so much and by the way but I like have so many meetings I'm the best in meetings okay I do them active acts very very efficient you guys know me many people send the most efficient they've ever seen okay so I use a tool it's so efficient and by the way I got Gavin at the Gavin he's a CEO I said I want a great deal for my people he said they said well most people get a 14-day trial isn't that great I said no if you're not a 45 day free trial at Nathan waka calm /schedule that's like I stay up forever so now Nathan black Kadam /schedule makes great sense day let's wrap up here with the famous 5 you ready I'm ready these are like super easy questions compared to what I've asked alright alright number one what's your favorite business book I spend more time reading white papers that I do books today but probably the business book that place tick samosa sprite more in the market today is Trump the art of the deal yep and what is the name of white paper sources you read a lot and it's a lot of our own where we're really defining what the different a digital and a electronic signature is mm-hmm great number two is their CEO you're following or studying right now you know I'm a big fan of jiff days up Bezos and Mark Cuban and obviously Warren Buffett coming from my investment background I know a Roxie quick question on this Warren Buffett always mentions and says go the Vanguard passive you know S&P 500 route if you're a passive investor and you don't want to you know educate yourself on companies in the market where I had Andy to CEO wealthfront and John the CEO of betterment on and they both say Warren is basically stupid for not recommending wealth front and betterment keeps recommending Vanguard do you think betterment and wealthfront eventually override the market share that Vanguard built up which is in the trillions in terms of AUM no you think Vanguard keeps it bleed your kids asleep everyone's done a great job of having a an investment what most most people don't spend a lot of time and attention on the costs associated with and having a low-cost solution like Vanguard has been a very good that a very good job of is critical or your long term returns number three is their favorite online tool you have like acuity scheduling now probably my favorite is email which I spend 99.9 percent of my time number four how many hours is 50 every night I would say between 6 set five to seven five to seven so average six there and then what's your situation Mary thing we have kid happily married for 26 years and and got three kids one got a Vanderbilt to that play football at Tennessee getting finance majors very good and how are you I am a 53 alright last question Jay take us home here take it back 33 years what do you was your 20 year old self new um the hard work and and perseverance how does anything else there you guys have it perseverance and hard work out does anything else from Jay again started in financial industry got addicted to a product that he was using right in the in the e-signature space said he know there's unique tech stack here that's way more secure and if an independent signature I should buy this thing I'll start by investing to maybe get information rights it turns out they didn't get a good offer he bought it back in 2002 he's now grown it they've got over 700 thousand seats or people you know using the platform their main distribution channels but 80% through vendors minimum their charge or sorry maximum they're charging if they're just a one to one ratio is just 250 bucks minimum per year per seat obviously there's volume discounts in there for each vendor depending on the success ratios totally happy to be in the background with a team of 50 again white labeling this through to people in different specific industries they raised over ten million dollars again really competing and a highly fragmented but very competitive and there will be many many many big winners in the document signing space Jay thank you for taking us to the top leg today appreciate it everybody died if you enjoyed Jay today go back and listen and Nicko yesterday who break it down to how to raise your first round of funding it would mean the world to me if you guys got any value from this episode if you would go leave or view on iTunes right now and subscribe you know I hustle like have to get these episodes out every freaking day for you guys and trust me I love it I would do with no listeners but boy oh boy makes my day and make my team's day when we see great reviews and get your feedback but thanks so much okay so I'll Drive I love giving away free money I feel like Pope for giving away cars I have something special for you today how many of you have heard our super sharp guests talk about success they've had with Facebook and Google as well all of you listening right now we ask if you're 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