How TerminusDB CEO Luke Feeney grew TerminusDB to $240.4K revenue and 350 customers in 2024.

hey folks my guest today is luke feeney he's the co-founder of terminus db the leading open source graph database before joining the business uh luke worked in the irish foreign ministry for a number of years he was ireland's acting ambassador to greece from 2016 to 2017. luke you ready to take us to the top born ready yeah your cool factor went up a ton over the past decade you went from politician to sas founder yeah well that depends on your perspective man that's an accurate statement all right tell us tell us about terminus where'd you get the idea so dermis is spin out from university we were my brother was a researcher a phd researcher in in computer science and trinity and they had a idea around building a very collaborative sort of data structure database and and spun out from there it kind of came from this very big project called the global history data bank which is trying to record all of the social and political data sets from all of human history and then provide them in a machine readable format so people can do kind of predictive analytics on history and so trying to look at the past and then get long journey trends into the future so one of the big ones was the rise of political violence in the united states uh recently so um the academic lead made a prediction back in 2010 that there'd be a big uptick in political violence in the united states in 2020 2021 so he kind of caught that trend pretty well now he didn't call the pandemic but he was able to pick that stuff out from well-structured large data that you're able to run machine analytics on and so when you say academic spin out most people they poo poo on academic experience because usually university keeps a ridiculously high percentage relative to the value they're going to add to the company over the years so how did you manage the spin out how much equity does that university still own yeah so like and that's a big problem in europe as compared to the united states so stanford for example has gone very progressive on that so they let them spin out and then expect them to give the money back just in terms of like you know you're a billion dollar company give us a few million there for an endowment whereas europeans are much more let's get our 10 percent so we we had a negotiation we got them down to about four percent that's about two percent now that's fine they still create value for us we talk about our link to them we run events on trinity you know they're a big center of innovation they help us in some international business development as well a little bit here and there so so i think it's a good deal all round interesting okay that sounds like a great mix so so the university's on the cap table on day one you're on the cap table on day one i think who else your brother yeah so there's three founders my brother and another phd researcher uh who spun out a guy called gavin mendel gleason he's the cto we took a seed round directly out of university out at a bridge from a bridge fund so it's specifically designed for softer terms for what year was that it's called the university bridge fund no what year was that oh that year was 2018 sorry sorry yeah 2018. so yeah so they're like it's like softer terms to try and get companies to spin out so the irish government backs it with a bunch of other institutions it's professionally managed by a vc called atlantic bridge and they look for companies mostly i'd say in the med tech world but also so how much did you raise in that round we raised 1.25 got it okay and when you say like fluffy terms so 1.25 seed in the u.s usually you're going to see that like a 6 to 10 million cap on a convertible note is that kind of what you got no no no i mean fluffy for uh for for ireland i'm afraid i find our feces aren't as enlightened as yours i see i see okay so what were the just generic high level terms in 1.251 so it's about like it's about evaluation by 3.5 of that or maybe a little bit more than that post money or free yeah that's pretty yeah so not too bad you know yeah i mean you're selling 20 20 20 of business about exactly so we were happy enough with that given what we've seen elsewhere in europe and um you know our valuations and back then valuations weren't quite as heavy as they are now um yeah and certainly european valuations are a significant discount to to us 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 it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret 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 frowner 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 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 valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview you raised some more but before we get your full funding story let's take a step back just for a second tell me about the customers who are paying you right now to use the technology so we're focused on software developers like we are developer tooling so we're trying to go bottom up we're trying to attract software engineers to use it to bring it into businesses and there's a real range of different sorts of software engineers working in you know martech ad tech working in research working in a bunch of different areas like that but it's very very much a bottom-up strategy so when you say bottom on blue are you talking like average customer average software developer paying like 20 30 bucks a month sort of deal yeah yeah exactly i see and then trying to expand it into more seats expanded into more usage paper usage models then so at what point like you know i've interviewed maybe dozens is an accurate statement of founders that decide to go bottoms up and the biggest pain point i've heard that surprises a lot of people is the moment when there's four or five people in one organization that are personally paying for the software and you want to move it to one company credit card that the cto is buying a seven seat license for that's the hardest payment expense if i had this problem others other problems how do you think about that yeah it is a big problem and and how do you join that all together i mean it's kind of a nice problem to have because it's a growing pain it shows the child it's very relevant across the organization rather than just relevant to an individual so like we we try and do a sandwich strategy then so then start approaching the cto to say what the value is and then try and bring it through as being a more enterprise sale at that point like when we came out of university first we were very much an enterprise sort of company we tried to do large-scale graph installations to solve big enterprise problems like you know predicting how many how much stock you need to have in your physical warehouse so we have enterprise sales chops we just felt that it was going too slow we weren't going to be able to get the growth targets that we were looking for going with that strategy so we shifted to open source and bottom up just to try and um give us that that potential runway to grow to be something really big rather than what was becoming a kind of consultancy you know case by case and so so we can do the...