How Visible.vc Reached 600+ Paying Customers Averaging $150 a Month With Under 2.5% Annual Revenue Churn (Interview with CEO Mike Preuss)

Introduction and Overview

Nathan Latka

00:01Hello, everyone. My guest today is Mike Preuss. He's the CEO and co founder of a company called Visible. He's from the Midwest and lives in Chicago, attended Indiana University, is also an alumni of the Orr Fellowship. He was previously the head of business development for Formspring based in San Francisco. Again, now running Visible.vc. Mike, are you ready to take us to the top?

Mike Preuss

00:18>> I am.

What Visible.vc Does and How It Makes Money

Nathan Latka

00:19Alright. So I think you play in kind of the investor updates space. Talk talk to us about what Visible VC is doing and how you make money.

Mike Preuss

00:26>> Yeah. So Visible VC is a web software application. We're a SaaS based business, so recurring revenue is is kind of our go to business model. And customers are really buying our solution to report data updates, KPIs back to their investors, potential investors, and their team.

Nathan Latka

00:46And so, look, I'm an LP in a couple of funds and like, you know, the fund managers will send out, you know, once every four or five months kind of an update via email or or the company is if we invest direct, we'll we'll send an email update. You know, why is this so much better that they'll start using this versus just sticking with email?

Integrations and Automating Investor Reporting

Mike Preuss

01:03>> Yeah. I think Scott cut out for a second there, but I think I got the gist of the question. So companies are connecting the accounts they already use to run their business. So whether that's Salesforce, HubSpot, Stripe, Google Analytics, Mixpanel, we integrate with a suite of different applications to automate that reporting process. So rather than pulling data down from your accounting file, from your CRM, from your own database, we automatically consolidate all that data for you.

01:29>> We visualize it in a really professional, beautiful manner, and then we let you send it out, again, like you said, through email, But, you know, you can also send it to Slack channels, shareable links, and then then we're tracking analytics behind all of that. So you you know exactly how all your different investors and stakeholders are engaging with the updates that you're sending.

Security and Data Privacy

Nathan Latka

01:46And imagine someone listening right now because we have, you know, a large audience who are constantly sending investor updates. The first thing that comes to mind is like security. How to make sure the link doesn't get in the wrong hands? I mean, so how do you really make sure this stuff stays only to investors?

Mike Preuss

01:58>> Yeah. That's that's a great question. So,

02:01>> you know, for us, everything is is rendered directly first and and foremost in email, and that's kind of our our baseline. Right? So if someone... If you're sending email anyways, you're looking forward around. So it's really up to you kind of you and your investor and making sure they're good stewards of the data that you're sending with them in terms of the the security. But, you know, we we take privacy really seriously and and coach people

02:22>> through that. But it would be no different than if some... You know, you're sending a pitch deck or or different piece of communication through email and and an investor sending that around.

Pricing and ARPU

Nathan Latka

02:30Got it. Okay. Interesting. Walk me through some of the other economics here. So on average, what's a cost... A customer paying for this?

Mike Preuss

02:36>> Yeah. They're paying on average about a $150 a month. So any, you know, kind of ranges, but our our ACV is right about a $150 a month.

Company Origins and Timeline

Nathan Latka

02:44That's great. And then put us on a on a timeline for me. When did you launch? What year?

Mike Preuss

02:47>> Yeah. So we started in 2014, and we were actually born out of a venture fund. So we built this product internally to kinda solve the problem of getting updates and data from our portfolio companies. From there, we've kind of pivoted the model a little over two years ago to really focus on companies. We we kind of learned through that whole process that investors are a great distribution channel, but we should really focus on a core experience

03:10>> for companies and and how they can properly leverage their investors and and update them. So starting 2014, we now have about 2,000 organization... Organizations using Visible. Not all of those are paid, but, you know, ARR is is growing 200, you know, percent a year. So we're doubling... Trying to double every year. Mhmm.

Nathan Latka

03:30That's great. How many of the... How many do you have paying today?

Mike Preuss

03:33>> Yeah. It's it's right or... It's it's above 600. Okay. So we have roughly a third of our our of our organizations, you know, paying to use Visible.

Nathan Latka

03:41That's great. So you just recently passed a million bucks in ARR, something like that?

Mike Preuss

03:44>> Yeah. Yeah. Yeah.

Nathan Latka

03:45That's great. Yeah. So 600 times $150 is $90,000 a month. Where were you about a year ago? If you're growing 200% year over year, I mean, obviously, it'd be like, what, 30, something like that?

Mike Preuss

03:52>> Yeah. Something like that.

Nathan Latka

03:53Okay. Oh, that's that's accurate. It was about 30 k a year ago per month?

Mike Preuss

03:56>> We don't disclose revenue numbers, but it... Yeah. Right around 30 k.

Nathan Latka

04:01Yeah. Yeah. No. I'm just, I mean, I'm just going off the data you gave me and then backing into the growth. Okay. Good. And then have you done this bootstrapped, did the the fund that you spun out of kinda fund this early on?

Mike Preuss

04:11>> Yeah. So a little bit of both. So we we raised some... A small round of venture capital. So we raised around a million dollars ourselves and have taken a really lean approach to the business in terms of growing it and scaling it. But we we definitely raised some capital to hire initial employees, build a product, and and continue to to invest back into the business.

Nathan Latka

04:30So so total money into the company today is how much?

Mike Preuss

04:33>> 1,100,000.

Nathan Latka

04:35Okay. So when you say you took on some earlier, you're talking like $100K really to get stuff going. Yeah. Yeah. Yeah. I mean, that's great. Nice and lean. And how many folks are you at today in terms of team?

Mike Preuss

04:44>> Yeah. So the team's currently five full time folks, and we're we're hiring for two open positions right now, but a full team of five. We also was just listening to Sid's podcast from GitLab. We're Yeah. Also a distributed team as well.

Nathan Latka

04:57Yeah. That's great. Yes. What what did think about that episode?

Mike Preuss

05:00>> It was awesome. I mean, talk about a a company that's scaled incredibly fast. It's it's easy to fall in love with with those metrics.

Nathan Latka

05:09Yeah. I was still pissed because I flat out asked him. I said, Sid, two questions. Are you selling to anyone right now? And he said, no. And then I said, are you raising right now? And he said, no. Now he smirked a little bit. And sure enough, a month a month after I do the interview, you know, GitLab raises a $100,000,000. I'm like, this guy, he... Of course, couldn't tell me when we did the interview, but

05:27Right. Still impressive numbers. Yeah. Okay. Good. So, your five people, where's everyone based?

Mike Preuss

05:33>> Yes. We have some folks in Dublin, Chicago, Indianapolis, and hopefully a couple more in in Europe coming up soon as well.

Nathan Latka

05:41So truly fully remote. Okay. Great. Yeah. And and the two spots you're hiring for out of curiosity, what are they?

Mike Preuss

05:47>> Yeah. One's a a full stack engineer. So, you development know, of application and demand generation kind of marketer. So one of the things we're

05:56>> trying to figure out is how do we trialer the business. You know, no one at the company right now is a, quote, unquote, kind of professional marketer. We've kind of bootstrapped it and and duct taped it ourselves and and looking for someone to handle that for us.

Churn and Customer Retention

Nathan Latka

06:09Interesting. How sticky is this thing? I mean, what's churn today, and how do you keep it low?

Mike Preuss

06:13>> Yeah. So churn's under two and a half percent. So we keep it pretty low in terms of churn per month? For for 10. That's per year. So we have really low churn.

Nathan Latka

06:24What is that? Logo or revenue?

Mike Preuss

06:26>> Revenue. Revenue churn per year. And logo revenue kinda match almost actually. But, you know, one of the things that we do pretty well is we're very... We've... Very, very hands on with the customer. So if we're seeing a customer's not sending a a monthly investor update out or update to their team, we can we can jump in automatically, provide a hand. But, you know, the the one risk for our business really, right, is some of our

06:49>> customers are more early stage company. Okay. So that's really our risk when it comes to churn. But once we have a customer sending a a one update out and publish it, we have, like, a 95% chance of landing them as a customer. So that's really our kind of true north KPI is what percentage of our trialers, and then what percentage of our customers are sending out, an update every single month. So we can look at total

07:08>> data thirty, sixty, ninety days.

Trial Process and Activation

Nathan Latka

07:10You're trialing folks. I mean, you don't you don't have a free plan, I don't think but you do have like a timed fourteen day trial, it looks like. Is that accurate?

Mike Preuss

07:17>> That is correct. Yep.

Nathan Latka

07:18Okay. And no credit card on the front. So you're basically saying how do we activate these people in fourteen days and then get them to pay?

Mike Preuss

07:23>> Yep.

Nathan Latka

07:24Okay. Interesting. I mean, what if someone goes, hey, listen, like a month is thirty days. I only get this for fourteen days. Our investor up isn't... Doesn't go out until the end of the month, so our trial is gonna end.

Mike Preuss

07:32>> Yeah. That's a great question. So we're pretty flexible when it comes to trial lengths in terms of, like, extending trials. But of the things we ask you when you sign up for Visible is when do you wanna send your next investor update out. And then we kind of do back of the envelope math there and know how to reach out to you. And then if you jump in after, you know, you send an update out or

07:51>> haven't got to fully experience yet, we've automated extending the trial process. So you you can always jump back in after the trial ends and and extend it because, you know, we don't wanna start charging until there... There's value in the product.

Expansion Revenue and Pricing Plans

Nathan Latka

08:01Yeah. That's interesting. I imagine just because of your your... The company age and the price points, you don't have significant expansion revenue yet at this point. Correct?

Mike Preuss

08:09>> Yeah. It's pretty small as of right now, but we're starting to see a lift in that. So we just revamped pricing where we kinda have logical jumps. Before, it was kind of just testing different price points. Now we have some, you know, at least two plans to pick from. So we're starting to see a little bit of expansion with plans to, you know, start figuring out more net new... Or sorry. Yeah. Because kinda net negative revenue

Nathan Latka

08:32>> churn as well.

08:32Yeah. Yeah. Or or or net revenue retention above a 100% even.

Mike Preuss

08:36>> Yep.

Nathan Latka

08:36Yeah. Yeah. I know it's it's always interesting when I go to a pricing page and I see the delta between two plans is, like, marginally small, which I would say yours is. It's very rarely do you see expansion. But once you see a plan that's, like, you know, $30 a month or one that's, you know, call for custom pricing, you know there's probably an expansion machine built in there.

Mike Preuss

08:51>> Yeah. We're... I would say we're probably, like, three months away from from having that nailed down the product side. I think we have a pretty good idea in terms of where we wanna go. Just as you know, of building out... Building that in the road map.

Nathan Latka

09:03Yeah. What what... So let me put a hypothetical question to you right now. If you wanted to invent a plan where you could charge $3 a month to companies, what would it include?

Mike Preuss

09:13>> Yeah. I think, you know, what we've heard is... Let me take that experience of investor updates, investor communication, and put that on my... Essentially, own domain or brand it myself. So right now, we do a lot in terms of you're signing into Visible. You're pushing updates out. If... You can remove that branding, obviously, but even... Can can I create an experience in my own domain for my investors to log in to? And then even take it

09:39>> a step further, we're starting to go down this path of nurturing investors. So how do I acquire new investors? How do I nurture them properly? Because the one thing that we see is our customers kinda start and stop fundraising processes. But as we both know, fundraising's, you know, twenty four seven, three sixty five, but most CEOs and founders don't have time to properly nurture an investor like they would a sales lead. So building tools around, you

10:04>> know, top of funnel in terms of your investor relationships is where we're gonna be spending a lot of time in our product. I would say very much of our focus to date has been around that customer success. Like, how do I retain and engage my investors? And then figuring out from here, like, alright. How do I activate them? And then at the top of the funnel, like, how do I find new investors and and nurture them?

High Alpha and the Indianapolis Ecosystem

Nathan Latka

10:22Got it. Mike, by the way, is it... Did you just go on a program in in Indy, High Alpha?

Mike Preuss

10:27>> Yes. So we were a company that was started prior to High Alpha. So I started Visible with with two partners there, Christian Andersen and and Mike Fitzgerald Yep. Who then joined the High Alpha. And so we were kinda like the prototype or MVP for what for what High Alpha is today.

Nathan Latka

10:45That's really interesting. So that program, I know a bunch of the investors in that program, and they always say amazing things about it. Would you agree? I mean, is that a great kind of channel to go through if you're new entrepreneur?

Mike Preuss

10:56>> Yeah. I can't say enough great things about High Alpha, their team, the partners there. They're truly kind of pro entrepreneur. So they're always, you know, thinking with entrepreneur first and foremost, and they really do kinda accelerate your time to market. Seeing some of these businesses launch now, you know, you have a full resource of engineers, designers, marketers, investors. Right? And so you're seeing companies launch in, you know, weeks. So it's pretty cool to see what they've

11:22>> built, and and I'm a huge fan and and can't say enough good things about the team there.

Customer Acquisition and Paid Marketing

Nathan Latka

11:26That's great. Talk to me about how aggressive you're being right now in terms of customer acquisition costs. You know, a $150 a month, are you spending twelve months of ACV to get the customer or less?

Mike Preuss

11:35>> Yeah. That's something we're we're honestly figuring out right now. So our growth to date has has more or less been organic. So either through organic search, through customer referrals, investor referrals. So we're starting to spend a little bit in terms of paid marketing, and we wanna keep that number less than twelve months. But we actually don't right now. Our AdWords budget, to give you an example, was, like, $400 last month. So we're starting to ramp

11:57>> that spend up to 2,000 and figuring out where where that is, but we just don't have great data in terms of what paid is gonna get us so far.

Nathan Latka

12:02Yeah. Yeah. Yeah. So so maybe maximum though, in a channel, you'd spend up to maybe $1,800 or twelve months of ACV to get that customer in the first place. Yep. Yep. You can do that if you've confidence in your churn data and lifetime value, obviously. Yeah. That's great. Any plans to raise additional capital in the near future?

Plans to Raise Capital

Mike Preuss

12:17>> Definitely. Am I allowed to disclose that or not? I don't know. But, no, we definitely have plans to raise capital in the future.

Nathan Latka

12:23So Yeah. I mean, by the way, I think most founders would say, of course, we wanna raise in the future. What I'm more interested in is how you think about raising. Right? Like, if you do raise, how much will you... Would you wanna raise in terms of planning for runway and things like that?

Mike Preuss

12:35>> Yeah. That's a good question. You know, my my skew is is how can we maximize a dollar and and not have to over dilute ourselves or or raise too much capital, you know, million to to two, nothing crazy. But just knowing how we've oriented the business, we can get a lot out of lot of every dollar that that's that's put in.

Venture Debt and Lighter Capital

Nathan Latka

12:55Yeah. In order to avoid dilution, would you ever consider venture debt?

Mike Preuss

12:59>> Yeah. I I... You know, we're we're probably open to all different types of of financing vehicles for for the business.

Nathan Latka

13:04Yeah. Did did did the folks at High Alpha... I know there's a really smart guys and gals there. Did they have any kind of thoughts on venture debt? I know it's becoming pretty hot now.

Mike Preuss

13:13>> Yeah. I I don't know. I can't speak for them on that and and something I haven't spoken with them recently, so I don't wanna speak for them in terms of, like, if, you know, if they Yeah.

Nathan Latka

13:23No. No. Just hot are on it. Just did you learn anything about venture debt from them is really what I'm asking.

Mike Preuss

13:28>> I'm not. We we we ourselves previously had taken out just SaaS SaaS recurring revenue loan. Yep. We we used Lighter Capital. Oh, yeah. So we use them to to finance business. I mean, that was incredibly easy as well and and and worked really well. So I can't say enough good things about, you know, working with that team too.

Nathan Latka

13:49Was it fairly quick in terms of when you started engaging with them to when they actually put money in your account?

Mike Preuss

13:54>> Yeah. It was... We did a podcast with them. Was, like, fifteen days from the start to the end. And it was cool. We did we did a podcast and and series with them because we essentially just turned over our Visible profile to the Lighter Capital team, and they had everything they needed. And we did it, you know, from start to wire, it was, fifteen days.

Famous Five

Nathan Latka

14:11That's amazing. Alright. Mike, let's wrap up here with the famous five. Number one, what's your favorite business book?

Mike Preuss

14:17>> Favorite business book? The Hard Thing About Hard Things. That's probably what everyone says, but I love that book.

Nathan Latka

14:21Number two, is there a CEO you're following or studying right now?

Mike Preuss

14:26>> There is not.

Nathan Latka

14:28That's okay.

Mike Preuss

14:29>> Actually, there is. There is. There is. His name is Max Yoder. He's a great friend of mine. Company in Indianapolis, also out of High Alpha called Lessonly. And what he's doing is actually incredible. Check him out.

Nathan Latka

14:39Yeah. I know that he was on the show back three months ago. So folks can go check that one out.

Mike Preuss

14:43>> He's been on the show.

Nathan Latka

14:44Yeah. Yeah. I've I've had a lot of people from Indy on. It's actually something's happening there on the water. There's a there's a ground swell happening.

Mike Preuss

14:50>> It is. Yes.

14:51>> Yeah.

Nathan Latka

14:52Number three, what billing tool do you use?

Mike Preuss

14:54>> Billing tool, Stripe.

Nathan Latka

14:55Okay. Only Stripe. Do you lay anything on top of it for analytics, like ChartMogul or Chargify, anything like that?

Mike Preuss

14:59>> ChartMogul and they're a partner of ours. We have a direct integration with ChartMogul in our in our application too. So our customers can pull in their ChartMogul data and then use that to report it back to investors mash it up with other data sources.

Nathan Latka

15:09Oh, great. Okay. Number four. How many hours of sleep do get every night?

Mike Preuss

15:13>> Eight.

Nathan Latka

15:14And what's your situation? Married, single, kids?

Mike Preuss

15:16>> Married.

Nathan Latka

15:16No kids?

Mike Preuss

15:17>> No kids.

Nathan Latka

15:17Alright. And how old are you?

Mike Preuss

15:19>> 30.

15:20>> 30. Last question.

Nathan Latka

15:21What do wish your 20 year old self knew?

Mike Preuss

15:25>> It's gonna be a grind.

Nathan Latka

15:27Guys, it's a grind coming from Visible.vc helps you get more accurate updates up to your investors quickly and more efficiently founded in 2014 spun out of kind of an investment firm now one... About $1,100,000 raised serving about 600 customers paying about $150 per month. Just past a million bucks in terms of run rate, growing about 200% year over year, healthy economics, less than 2.5% revenue churn per year. Just now experimenting with paid spend. Obviously won't

15:51go over a twelve month payback period. Team of five in Chicago and other remote locations. Mike, thanks for taking us to the top.

Mike Preuss

15:57>> Thanks, Nathan. Have a good one.