TitleCapture Revenue (2024)

[00:00] Titlecapture.com launched back in 2013. They finished 2021 with $280,000 a month in revenue, and they've grown nicely five to 10% year over year. The the the definition of a healthy bootstrapped company, they profit 30% every month. So on $333,000 a month in top line revenue today, call it $90,000 worth of profits, which they keep 50% of that in the bank to grow their cash balance. Now over $600,000, he likes to see three to five months of [00:23] expenses in the bank to stay safe. Now thinking about capital allocation, what can he buy? Can he buy distressed assets to keep growing the company? He's got the team to do it, 35 folks, 10 engineers as they look to continue to scale in a bootstrapped way. Hey, folks. My guest today is Alex Samant. He's the cofounder of titlecapture.com, where they help US title agents, real estate agents, and loan officers provide hyper accurate cost estimates to home [00:45] buyers and sellers. The company was founded in 2013, a 100% bootstrapped, and now doing almost 4,000,000 in ARR. He's got personal skills and background, including product design and marketing. Alex, you ready to take us to the top? [00:59] >> Yeah. I'm really thankful for being on your podcast, Nathan. [01:03] You bet. Did you start off sort of as a broker and said, you know what? I don't like this whole commission structure. I'm gonna go build a SaaS company instead. [01:11] >> No. No. No. It it's the the story is actually lot simpler and not that glitzy and, you know, we me and my cofounder were developing, you know, software, basically outsource getting projects and whatnot. At some point in 2013, we kinda got fed up of that business model. And then we decided, hey, let's build something that we own and we sell a subscription instead of just constantly going back to step one with every new client. And so [01:42] >> what happened was that we [01:47] >> had a company who wanted us to build a rate calculator app for them, right? And that's when we decided, well, hold on, instead of actually selling it to them, let's find out more about this need and let's do some research because they're pretty big and if they need it, chances are that the whole market might need something like this. And we do the homework and we propose to them, hey, you don't have to pay us hundreds [02:12] >> of thousands of dollars, just pay us a thousand dollars a month, you know, going forward and we'll cap it lifetime deal and we'll build it, but we're gonna own it. And they said yes, and that was the start of what titlecapture [02:25] Are they still paying 1 k per month today? [02:28] >> Yeah. But they were acquired by one of the biggest title insurance companies in the country, First American. Did they cancel titlecapture after they were acquired, [02:36] or they're still they're still paying and using [02:38] >> it? No. No. The funny story is the the acquiring company already had a solution, but the people that were using us, they sort of were activists, and they didn't wanna let go of it. And so they kind of opposed canceling, and we're still with them. [02:57] Sounds like you need to write a book, The Activist Customer. [03:01] >> Yeah. That's awesome. That would be a good customer success book. [03:04] That would. So so how did you structure this in the early days? Because I have a lot of founders listening that are launching their first product. Someone has told them, yes, we're willing to pay. But making the leap from someone verbally saying yes to actually signing a DocuSign and maybe actually wiring via Stripe the first, down payment is a whole another issue. So how did that work for you? [03:23] >> Well, I mean, we were pretty fortunate. [03:28] >> What happened in the here's another funny story. We were supposed to be three partners, right? I was kind of on the design side, and we had a programmer, and then my cofounder who was doing sales and business development. Right? And when we decided that we're gonna build this thing, we also, in parallel, booked a booth at the annual convention in West Palm Beach called Alta One, like, Alta being the American Land Title Association. The problem was [03:54] >> that three weeks or four weeks before the trade show, our programmer kind of went missing in action. Forget about it. We didn't have any code. We didn't have anything. So I had some background in computer science, and I did figure it out on my own. So obviously, our v one point o, I don't think it was very functional. It looked great. It was something to show people at the trade show. [04:19] >> Obviously, we pivoted and we made it work, you know, in the coming weeks. But we went at the trade show, and our go to market strategy was practically nonexistent. We got lucky because one person at the trade show who was a the national sales rep for a large title insurance company loved it, right? And our customers are the title agencies, right? They're the resellers for title insurance policies. The title insurance company is they're like the brokers, [04:50] >> the middleman, right? And so every title insurance company has tens and hundreds and thousands of title agencies that they do business with. So this guy saw our product and was like, Dude, I would love to put it in front of all my title agencies because I'd love [05:03] >> to do this. [05:04] Disrespect you, but you weren't our developer. How are you able to build something that this guy's never seen before, and you're not even a developer? I mean, what why why hadn't someone else done this thing yet? [05:15] >> It's a slow, non tech savvy industry. You know? Back in 2013, [05:23] >> there weren't many solutions, and the ones that existed looked like they're from the nineties. [05:29] I see. [05:29] >> So when we came in with a responsive, modern looking thing that was easy to use and, you know, I mean, we had background in creating product. So it was obviously superior. And what we added as a nice touch was that we branded it. We basically made it a white labeled web app for each and every single customer. [05:48] I see. [05:49] >> So that when they put out this rate calculator, it was representing them, and it was nicely branded [05:55] >> and all that. So it won with ease of use and aesthetics. [05:59] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect [06:22] your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [06:46] get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna 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 [07:08] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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 [07:34] going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. 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 [07:56] if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. 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. Alright. Let's jump back into [08:22] the interview. So fast forward to today, how many customers are you working with? [08:28] >> We have signed up of 1,500 title agencies thus far. The market in total is 13,000. [08:40] >> So with competitors and everything, we're pretty, you know, satisfied with how how far we've come and then what's slow moving What each [08:47] of those 1,500 pay per month on average? [08:50] >> The the ACV is about $4. [08:54] Yeah. So that's annual value. Right? [08:56] >> Right. So it's slightly above 300 a month Mhmm. Average. But we have customers in the thousands a month. [09:04] So can we take the 1,500 customers times $4 ACV? That would put you at, like, a 6,000,000 run rate today. But you said in the bottom, you're more at 4,000,000. [09:10] >> So it's not There's yeah. We've signed up we've signed up 1,500, and when you take out the churn companies, I don't know, we're about around the thousand active. [09:22] Okay. So thousand active at four a year puts you at a 4,000,000 run rate today or about 330,000 a month in revenue. [09:29] >> Yeah. [09:30] And where were you exactly one year ago? [09:34] >> One year ago, we were [09:38] >> 6% less because I remember the growth in 2022 was 6%. [09:46] >> The real estate market definitely took a bit of a hit towards the end of the year, last year. Mhmm. We have seen a bit more churn than usual. Our churn is normally at about point 0.7% month over month. Mhmm. But in the sort of last couple of months of 2022, we did see it up to 1.7, 1.8. People got scared. A lot of title agencies decided to kind of cut costs across the board because they didn't [10:17] >> know what was coming, you know, so they take took all this sort of preemptive action. But it has come back down since then, so people are starting to get a little more confident about where the market's going. But it's been kind of three, four months rough where our net new MRR was negative. [10:33] Okay, so 313,000 a month a year ago would be 6% growth, up to three thirty three today. Take us back one more year, what did you finish 2021 with MRR wise? Do you remember? [10:46] >> February. Something like that. [10:47] February. Okay. So, I mean, this is the definition of, like, you know, people say overnight success, but no. You're just plugging away five to 15% year over year growth for the past seven, eight, nine, ten years. Right? Yeah. Totally bootstrapped. [11:01] >> It's actually totally bootstrapped, and what's actually now becoming very evident is that growth is tapering because of the fact that we're going higher into the sort of market share quota and because you have other competitors, because whatever, you've already signed up, the people who are tech savvy and they want to use technology, it's getting increasingly difficult to grow or to maintain stable growth by sheer new customers. So now what really becomes a necessity for us strategically [11:35] >> is to start looking at building more product to increase that ACV. So for example, our product is a rate calculator, but the next step of the process is a full on settlement software, which helps the title agency manage the whole transaction. [11:53] You own that product. You upsell that product. [11:56] >> We don't have that product yet. There's another competing company that came along in 2016 that that disrupted that market. [12:03] Why don't you buy them? Or why why didn't you build it? [12:10] >> What do you mean? [12:11] Well, why didn't you go buy it? If you know that's the next upsell, why why haven't you guys built that internally to start upselling yourself? Or or why have you not gotten bought that bought that competitor? [12:20] >> We just didn't get around to making that definite decision, right? So it's because of internal decision making that's slightly slower. [12:30] >> But we definitely have to start moving, either buy or build whatever, because that's a 40,000 ACV product. It's a 10 times. So if you want to grow from this point on, you have to really start going out there and building more value. [12:44] Alex, what's the team size today? Many folks? [12:48] >> 35 to 40 people. [12:49] Oh, wow. Okay. How many engineers? [12:55] >> Up to 10. Not more than 10. [12:58] Are they all full time, or do you you sort of outsource development shops? [13:02] >> They're full time. I think our DevOps engineers are outsourced. [13:06] You're what? Okay. So what? Like, five ten of those or no? [13:11] >> No. It's about two people. Two or three. [13:13] Okay. Interesting. [13:15] Very cool. And then, I guess, talk to me I mean, this is a great Bootstrap story. It's not every day you hear a Bootstrap are going up to $4,000,000 in ARR, so I wanna focus a little bit on that. Are you running it sort of right at breakeven, or do you guys have profits every month? [13:27] >> Oh, no. The company's highly profitable. It's 33% profit margin. [13:32] Okay. So you guys will do then about $90,000 a month in profit on your 330,000 of top line. [13:38] >> Yeah. Yeah. [13:38] What do do so what do [13:39] do as a capital allocator? As a capital allocator, what do you do with that $90 each month in profits? Do you pay it out as dividends? Do you reinvest it? [13:46] >> What do do? We pay it out right now. But, we're also making sure the the cash is there to kinda sustain whatever might happen. Right? So we've taken all kinds of, you know, good financial, you know, safety measures. So what what makes you feel safe? Distributed. [14:07] How how much cash in the bank makes you feel safe? [14:09] >> Three months worth of expenses. You know? [14:13] Which is how much for you? [14:14] >> Well, it should be about 500,000, 500, 600,000. [14:19] Okay. Interesting. That's a good target to get to. [14:25] Yeah. As a as a cushion, just to make you feel safe, that makes sense. Now how do you structure the $90,000 in payouts each month? We had Bridget on with You Can Book Me, who had a whole profit sharing plan she does each month. How do you guys think about distributing? [14:37] >> We just make it half half, because we have two partners, 50% each. And well, we don't take it all, right? We kind of limit it to the point where half stays in cash, just adds to the cash every single month. [14:54] So 45 ks of the 90 ks would stay in the business, so your cash balance now is 650,000, and you guys each take whatever $2,030,000 a month, you split the rest. [15:03] >> Yeah. Yeah. Pretty much. [15:05] And that's your salary, or is that on top of your salary? [15:07] >> Yeah. No. That's that's basically what we pay ourselves. [15:11] I see. You know? [15:13] I see. No. That's great. I mean, I I love this model. Now if we look at, like, personally, what you what maybe you would make on the company over time, like, we're, like, $25 a month from the dividends times twelve months, I think is, $300,000 per year. And the reason I set that context is if someone came to you and offered you and your partner to buy the whole company for, you know, say, 10,000,000 all cash [15:34] upfront today. Right? Do you sell? [15:40] >> It's a tough that's a tough question to answer. [15:46] >> We're definitely open to an exit opportunity, but at the same time, we know that there's room because of my conversations with all the our customers, there's a lot of opportunity. And on one hand, there's more we can build and grow the company. [16:06] >> On the other hand, [16:09] >> when comparing a financial buyer's offer with the existing bigger sort of settlement software or insurance company, the value of our customers that we have today to them is a lot higher than what a financial buyer would offer. Right? We were actually doing the math, I'm not gonna name any names, but we realized that for one of our partners, a buyout would be in the range of 60 to 80,000,000. [16:40] >> You know, that would be fair value to them. Actually, that would be a discount. You know? [16:46] So That that would be really I mean, look, I see a lot of deals in today's market. That would be a premium exit valuation. So why are you not signing and taking that immediately? [16:56] >> Because we didn't get the offer yet. We don't have any offers because we haven't been as proactive as we should have in in networking and just being in front of all the potential strategic acquirers. Right? So we have to do a lot more of that. You know, that's my take on it. [17:13] Well, so what are [17:14] >> what How are much on the work, you know? [17:16] Yeah. I mean, so how are you thinking about the business, I guess, moving forward? You know, it sounds like you're very comfortable, and this is not a bad thing, by the way. I'm not this is not a disconcer being comfortable. This is a it's a compliment. You're in a very comfortable spot. So you can keep doing status quo. No problem. I don't know if you're competitive. You play varsity sports back in the day. Maybe you wanna [17:33] go build a billion dollar company. That would be a different model. Or maybe say, you know what? I wanna go build a family and get out of operating and free up my time and sell the whole thing. Which of the buckets do you fit in or a different bucket? [17:47] >> I would I would dig in the second because I always wanna challenge myself and build a bigger thing and more. So the way I see it, it's you know, this is an asset, so I need to grow its value or build more assets if I can't do this. It's it doesn't matter. Right? We've The sky's the limit, and no matter how small the niche is, if you dive deep in it, you'll find opportunity everywhere. We've actually [18:14] >> discussed finding a distressed insurance underwriter that we could buy, that we would need an investor, obviously. You could take outside money. Buy that distressed underwriter and use our technology to position it, to create an angle, and start competing with the bigger underwriters. And that's a different market altogether because we're talking about hundreds of millions in revenue every year. It's insurance, right? Yeah. So there's all sorts of things. Feel like the best [18:52] >> and the most important thing is for the owners and the founders to get on the same page and make these calls, you know, because you don't always have the same values, don't always have the same, you know, wants, right? And so, [19:14] >> I think moving forward is usually slower Very good. When there's a pie. In the beginning, there's no pie. You you move at the speed of light, but then, yeah. You know? Yep. [19:25] Alex, we're out of time. So let's wrap up here quickly with the famous five. Number one, favorite book. [19:31] >> Favorite book? I'm gonna plug in my, you know, Dan Martell's Buybacker Time. Let's go. [19:36] That's a good one. Number two, is there a CEO you're following or studying? [19:45] >> Many of them. But if I had to choose one why is this so difficult, man? [19:54] >> I don't know. I have no idea. Let's say Elon Musk, because he's on Twitter a lot and it's funny. [20:01] Number three, how what online tool do you use or is your favorite online tool for building titlecapture? [20:09] >> HubSpot. [20:10] Number four, how many hours of sleep do get every night? [20:14] >> Wow. That's about six. [20:16] Okay. That's good. And what's your sit situation? Married, single, kids? [20:20] >> Married, two kids. [20:21] That's awesome. Two daughters. [20:22] How old are you, Alex? [20:25] >> I'm 39 going over 40. [20:26] That's awesome. Congrats. Happy early birthday. [20:29] >> Thanks. [20:30] Last question. Something you wish you knew when you were 20. [20:34] >> Something I wish when I was 20. [20:38] You knew. [20:39] >> Yeah. [20:40] >> I wish I knew that oh, man. You're asking tough questions, man. [20:52] >> Damn. [20:56] >> That building a business that actually [21:02] >> how should I put this? [21:07] >> No. I'm having a hard time putting it because it's very complex. [21:12] We can skip it. It's no problem. [21:14] >> Yeah. We can skip it. It's there's lots of ideas. Like, I'm having a hard time. [21:18] Guys, there you have it. Titlecapture.com launched back in 2013. They finished 2021 with 280,000 a month in revenue. They've grown nicely, five to 10% year over year. The definition of a healthy bootstrapped company, they profit 30% every month. So on $333,000 a month in top line revenue today, call it $90,000 worth of profits, which they keep 50% of that in the bank to grow their cash balance, now over $600,000. He likes to see three to five [21:42] months of expenses in the bank to stay safe. Now thinking about capital allocation, what can he buy? Can he buy distressed asset to keep growing the company? He's got the team to do it, 35 folks, 10 engineers as they look to continue to scale in a bootstrapped way. Alex, thanks for taking us to the [21:55] >> top. Thanks, Nathan. [21:58] One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. 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 1PM [22:24] 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, 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 SaaS world, whether it's an acquisition, a big [22:46] 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 SaaS 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 [23:08] up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty 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. [23:27] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.