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Founder Interview

How Carbide Security Hit $2M ARR and 190 Customers with Cybersecurity Compliance SaaS (Interview with CEO Darren Gallop)

Interview Date
June 14, 2023
Interviewee
Darren GallopCo-Founder and CEO
Watch
Watch the full interview on YouTube

Company Metrics at Interview Time

ARR (2023)

$2M

Customers (2023)

190

Team Size (2023)

34

Seed Round Raised (2021)

$4.1M

Historical Snapshot

These numbers were reported by Darren Gallop during his interview with Nathan Latka recorded in June 2023 and represent a historical snapshot, not current figures. See Carbide Security’s current numbers.

Key Takeaways

  • 01Carbide Security surpassed $2M ARR as of June 2023 with 190 active customers
  • 02Annual contract values range from $7,500 to $30,000, with enterprise packages climbing higher
  • 03The company had 34 full-time employees at interview time, up from about 16 or 17 at the 2021 seed round
  • 04Carbide raised a $4.1M seed round in 2021 when ARR was just under $500K
  • 05The company was 105% on target for the year at interview time
  • 06Darren previously built and sold Marcato, a music festival SaaS, for a 5 to 10x multiple after reaching $2M ARR with 14 people
  • 07Carbide offers three feature tiers plus an optional expert services add-on covering information security and data privacy
  • 08The company had a path to cash flow positive by December 2023 to February 2024 without a Series A

Company Metrics at Time of Interview

MetricValueSource
ARR (2023)$2MFounder interview, June 2023
Customers (2023)190Founder interview, June 2023
Team Size (2023)34Founder interview, June 2023
Team Size (2021)16Founder interview, June 2023
ARR (2021)$500KFounder interview, June 2023
Seed Round Raised (2021)$4.1MFounder interview, June 2023
Year Founded2019Founder interview, June 2023
Annual Contract Value (low end) (2023)$7,500Founder interview, June 2023
Annual Contract Value (high end) (2023)$30,000Founder interview, June 2023
Year-to-Date Target Attainment (2023)105%Founder interview, June 2023

Growth Breakdown

Revenue

Carbide Security crossed $2M ARR by June 2023, up from just under $500K at the time of its 2021 seed round. The company was targeting $3M ARR by end of Q3 2023 and $4M by year end, and Darren reported being 105% on target at interview time.

Customers

The platform was serving 190 customers at interview time. Customers are primarily SMBs ranging from 20 to 250 employees, though some larger businesses with 400 to 600 employees also use the platform.

Team

Carbide had 34 full-time employees in June 2023, more than doubling from approximately 16 or 17 at the time of the 2021 seed round. The seed capital was used to build out a leadership team, formalize sales and marketing, and expand product development.

Funding and Profitability

The company raised a $1M pre-seed in 2019 and a $4.1M seed round in 2021, totaling $5.1M raised. At interview time Darren was in early conversations for a Series A, but noted the company had a path to cash flow positive by December 2023 to February 2024 if it chose to remain in a more bootstrap mode.

Growth Strategy

Targeting Multi-Compliance Complexity

Rather than competing head-on with simpler SOC 2 tools like Vanta, Carbide focuses on customers with more complex, multi-compliance environments. This positions the company in deals where buyers need a more rounded security program beyond a single fast audit.

Tiered Feature Packaging with Expert Services Add-On

Carbide offers three feature tiers and a premium expert services layer that gives customers access to information security and data privacy specialists, workshops, and team upskilling. This structure allows the company to serve both smaller SMBs and larger enterprise customers at different price points.

Closing New Business Month Over Month

Darren credited consistent month-over-month new business closings as a key driver of growth, and said the company was raising a Series A specifically to put more velocity behind what was already working rather than to fix a problem.

AI Feature Expansion

Carbide was actively launching AI-integrated features at interview time, with plans to introduce usage-based pricing tied to token quotas as those features rolled out. Darren framed this as an emerging upsell axis beyond the existing feature tiers.

Founder Domain Expertise as a Sales Asset

Darren's personal journey through cybersecurity compliance at his prior company Marcato gave him credibility with target customers. He earned a CISSP certification and a privacy certification, and used that expertise to shape the product around real compliance pain points SMBs face when selling to enterprise and government buyers.

Best Quotes

Yeah, I'd say the majority of our customers have pretty similar use cases. And usually what it is is they're selling a product, a lot of times it's a SaaS, a software as a service type product. They have some degree of confidential information. Maybe it's personal identifiable information, health care information, financial information, which are pretty common classes. And they're selling to government, they're selling to enterprise, and they're being required to comply with a variety of cybersecurity best
No, I would say that we definitely do end up competing with Vanta in the SOC two example, where we generally focus our energy and where we have more success with customers is when their needs are more complex than just simply getting a very fast and dirty audit for SOC two, it's when they have more multi compliant environments, or they're just being they're they're being required to do more above and beyond, the simplicity of a SOC two,
Yeah, it ranges anywhere from 7,500 to about $30,000 We do have an enterprise grade package that can climb north of that substantially, but we're still working primarily with SMBs. We have a lot of customers that are as small as twenty, thirty, 40 employees. I'd say the bulk of them are probably more like 100, 150, two fifty.
There's a little bit of both. So there's definitely a feature. There's, like, three tiers when it comes to features. There's also a layer that we can put on top of our plans that provides expertise. So a heightened degree of expertise. I'm not talking about just standard customer success people, but having access to information security and data privacy expertise, running workshops, upskilling into your team, that is a premium feature.
Yeah. I mean, we were shy of a 500,000 in ARR, know, I think what what helped us, though, was that the space was pretty hot.
Yeah. 34 folks on the team right now.
for us, for example, we're a 105% on target so far this year. So that's in a rough time. Now we've been somewhat conservative looking at the situation in the macro environment to to make
Yeah. We got about a 190 customers on our platform right now.
I probably wish I knew how important it was to focus more time on customers and less time on a lot of other things that could become distracting as you're building a business.

What Happened Next

This interview captured Carbide Security at a specific moment in June 2023, when the company had just crossed $2M ARR and was actively exploring a Series A raise. The numbers Darren shared reflect the company's position at that point in time and may differ significantly from where Carbide stands today. Visit the Carbide Security company profile on GetLatka for the most current available metrics and funding data.

View Carbide Security’s current profile and metrics

Full Transcript

Introduction and Carbide Security Overview

Nathan Latka

00:00Guys, 2007, he launched a tool for music festival to manage their events in Canada called Marcado. By 2014, he was counting customers like Bonnaroo and Coachella. Ultimately, grew it into $20.18 to $2,000,000 in ARR profitable, basically bootstrapped with 14 people, sold it for a five to 10 x multiple, and then got into carbide because he was frustrated with all the security protocols he had to do at his first company, Mercado. Now today, carbide has raised to

00:21seed sorry, pre seed, a seed. Most recently, that seed was in 2021. They broke 500 k of ARR at that time raised 4,100,000. Today, over 2,000,000 in ARR targeting 3,000,000 by end of Q3 and 4,000,000 by the end of the year, already serving 190 customers, helping them do things like SOC two compliance, get expertise in the cyberspace, along with three very powerful feature sets and feature tiers. Hey, folks. My guest today is Darren Gallop. He's the

00:46co founder and CEO of carbidesecure firm that provides businesses of all sizes with the tools they need to adopt a strong cybersecurity and privacy posture, enabling them to protect their data from cybercriminals, transform security from a potential liability to competitive advantage, and accelerate their growth. Darren, you ready to take us to the top?

Darren Gallop

01:04>> I'm ready to do it. Let's go.

Nathan Latka

01:06Alright. Let's rock and roll here. So first things first, can you give a story of maybe a customer that used you today and how they use you, their specific use case?

Typical Customer Use Case

Darren Gallop

01:15>> Yeah, I'd say the majority of our customers have pretty similar use cases. And usually what it is is they're selling a product, a lot of times it's a SaaS, a software as a service type product. They have some degree of confidential information. Maybe it's personal identifiable information, health care information, financial information, which are pretty common classes. And they're selling to government, they're selling to enterprise, and they're being required to comply with a variety of cybersecurity best

01:44>> practices, standards, frameworks. They may need something like a SOC two audit or an ISO 27,001 audit. And more so nowadays, we're seeing on top of those requirements, they're getting requested to comply with various different data privacy regulations, things that are in Europe, like the big ones like Europe's GDPR, but also we're seeing a lot of these state based privacy acts coming up. And that's really what customers are using us for. They're coming in, they don't have

02:10>> a sophisticated enterprise grade security program in their SMB, and they're using our platform and their resources within that platform to build and to manage that program and then effectively report that and demonstrate trust to their customers.

Nathan Latka

02:23So just to be clear, mean, there's companies like Vanta, obviously, that help with SOC two compliancy. It's sort of easy, that's all they do. Is that what you guys are competing against, or are you sort of more vertically integrated SaaS?

Competing with Vanta and Positioning

Darren Gallop

02:33>> No, I would say that we definitely do end up competing with Vanta in the SOC two example, where we generally focus our energy and where we have more success with customers is when their needs are more complex than just simply getting a very fast and dirty audit for SOC two, it's when they have more multi compliant environments, or they're just being they're they're being required to do more above and beyond, the simplicity of a SOC two,

03:01>> for example.

Nathan Latka

03:02Okay. And so with all that in mind, I sort of think of you as an enterprise version of Vanta based upon what you just said. What's the average customer paying you per month or per year to use your technology?

Pricing and Contract Values

Darren Gallop

03:12>> Yeah, it ranges anywhere from 7,500 to about $30,000 We do have an enterprise grade package that can climb north of that substantially, but we're still working primarily with SMBs. We have a lot of customers that are as small as twenty, thirty, 40 employees. I'd say the bulk of them are probably more like 100, 150, two fifty. That's where we see a lot more. But we have tons of smaller customers that just because of the nature and

03:38>> complexity of what they're doing and the types of customers they have, they need something more complex. They need something more rounded in their in their security program.

Nathan Latka

03:46What are the pricing axes that you're upselling against? Is it number you just mentioned FTEs. Is it feature based upselling or some utility based upsell?

Feature Tiers and Expert Services Add-On

Darren Gallop

03:53>> There's a little bit of both. So there's definitely a feature. There's, like, three tiers when it comes to features. There's also a layer that we can put on top of our plans that provides expertise. So a heightened degree of expertise. I'm not talking about just standard customer success people, but having access to information security and data privacy expertise, running workshops, upskilling into your team, that is a premium feature. But yeah, we do have our tiers, they're

04:19>> feature based. And then for our more larger businesses, we do have a per customer sort of buckets that that sort of get involved. We do our when we do deals with companies that are, say, four or 500, 600 employees, they're paying a little bit more because of the volume of people and and that are integrating with the and and interacting with the tool.

Nathan Latka

04:37Didn't hear you say anything that was necessarily utility based upsell. I heard three feature buckets. They can pay for services in the form of experts, heightened expertise. And then lastly, you said three, four, 500 employees. So just to be clear, is there any numerical based upsell that is not a seat based? For example, number of API calls per month, number of reports done per quarter, anything like that?

Darren Gallop

04:58>> Yeah. I mean, now that we're starting to launch a lot of stuff that's integrating with AI, there are some thresholds that are bucketed into those tiers right now. I expect there'll be some more stuff like what you're referring to as we launch more and more of our AI based features because there are sort of per quota token costs associated with that. So I would expect that we'll start rolling out more of that type of stuff as

05:22>> we start rolling out more of our AI based features over the coming months.

Nathan Latka

05:27Oh, 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

05:50your 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

06:15get 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

06:37not 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

07:02going 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

07:24if 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

07:50the interview.

Darren's Background and Marcato Story

Nathan Latka

07:52Okay. And, Darren, give me more of the backstory here. What you did launch the company?

Darren Gallop

07:56>> Yeah. It's just pretty fascinating. My my background is actually in music. I used to be a professional musician in my twenties, and then I started a record label. And then that, that kind of was a bit of a tough go in 2007. So I started my first SaaS company, which was a back end logistics management platform for music festivals and cultural events. And we started off with a lot of smaller towns sort of, you know, Canadian

08:18>> events. And then eventually, we ended up working with some of the biggest music festivals in the world. So by 2014, 2015, we were the we were the back end tools for Bonnaroo, Coachella, Burning Man, Just For Laughs festival, x games, like, just a pile of really massive events in several different countries.

Nathan Latka

08:36Working revenue on that music business, that music SaaS business?

Darren Gallop

08:40>> Revenue at that biz we sold that business in 2018. It was it was just over 2,000,000 ARR. It's a pretty niche product. Right? Yeah.

Nathan Latka

08:48Okay. So from 2007 to 2018, you grew up from 0 to 2,000,000 revenue, then you sold it in 2018.

Darren Gallop

08:54>> Yeah, it was a profitable company at a little over $2,000,000 in ARR. Small team, like there's 14 people. We have like 300 events around the world that use some form of the platform and we sold that in 2018. And that was really what got me into security because we were finding that later in the life of that company, as we started working with more corporate owned events like, you know, properties owned by Disney and Live Nation

09:18>> and AG Live and organizations like that, We were putting through we were starting to get put through pretty rigorous cybersecurity assessments, and then data privacy elements were starting to come about with things like GDPR and and whatnot. So, you know, that just became a really big focus of my energy in the last couple of years of that business, like keeping the company compliant and keeping the company trustworthy on that security front. So it kinda forced me

09:43>> to get pretty knowledgeable about the topic. And and I ended up doing a doing a couple of courses, and it did a CISSP by the end certification, did a did a privacy certification as well. And just out of that journey, I started looking around and I'd be like, oh, man. This is gonna be like a big problem for a lot of companies. This is gonna be a really fascinating transition where, historically, people were kinda like make

10:05>> things fast and break them, and there wasn't really a lot of sophistication around looking at startups from a security trust perspective. But that certainly really the the needle on that turned really quickly.

Nathan Latka

10:17That company was called a Marcato, I believe. Correct?

Darren Gallop

10:20>> That is correct.

Nathan Latka

10:21Yeah. You move past this. You immediately go into a carbidesecure quick.

10:26Almost the way you say it, it's like you want to move on so quickly. It makes me feel like you feel like it's a weak story it took you that long to 2,000,000 in ARR bootstrap, but I love the fact that it's a $2,000,000 bootstrapped profitable software company with 14 employees. I mean, is like the new American dream. It's just people don't celebrate that, so I want you to know I love that story. Think that's fantastic.

10:46What else did you learn sort of, you're doing something very different now because you've raised a bunch of VC, right? So when you compare sort of what you're doing now versus the good old days of bootstrap profitable, no board, do what you want, how do you compare the two?

Darren Gallop

10:57>> Yeah, I mean, if I were, I would there's pros and cons to both avenues. I think I like the bootstrapped approach. I mean, you could sell the company have a much smaller exit, but it could end up being just as big or just as good for yourself as like a much larger accident when you've got, you know, all kinds of different classes of pref shares and, you know, some some venture debt and, like, you know, all

11:23>> this kind of stuff sort of piled on all before you and your common shareholder sort of category. Right? So, yeah, there's a lot of bullshit associated with with you know, you get a lot of people in your business and and, you know, you can't really predict. It's really hard to predict how how your your board members and your venture investors are gonna react to things both, you know, out there in the macro environment in your own

11:47>> sort of within your business, but also in their own world, what's going on with their fund and stuff like that. So, you know, it's it becomes another thing to manage. Right? And, like, you know, to be I'm a big fan of focusing. Like, I like building product, solving problems, and talking to customers. So all the shit that you pile onto your business that's not that can be can be tough. Right? So it's extra. Right? So, you

12:09>> know, I don't know. Like, what do I do what am I gonna do next after carbides? Yeah. I I I think I'd probably start off a little bit more to the roots of my last company in the in the very bootstrapped sort of position and then, you know, maybe maybe look at capital later on. Like, I'm always I'm always impressed. You you know, brought it up. It's a we don't celebrate that enough. Everyone just celebrates, oh,

12:31>> some such and such raise $20,000,000. It's like, you know, now they just signed some big checks they have to figure out to cash in the next couple of years and a lot don't cash them. You know? So

Nathan Latka

12:40I know a lot of I know a way more broke VC backed founders than I know broke bootstrap founders. Let's just put it that way. So so but moving to the carbides story in that launch, which I assume happened after 2018, can you close that story out for us? Was it public what you sold for? Can you give us a range?

Darren Gallop

12:56>> No. It wasn't it wasn't public. It was it was it was confidential. It was private. It was true. It was a PE roll up company that bought another company, and then they they had some big PE money rolled into it, they rolled up eight companies, and there was some pretty strict terms around disclosure of of deal terms, you know, associated with that. But, it it was it was enough.

Nathan Latka

13:18It was now almost six years ago or five years ago.

Darren Gallop

13:22>> Yeah. That was '28 that was late twenty eighteen that that deal closed. I think it was October 2018.

Nathan Latka

13:27You can't give a range. I mean, most private equity firms, look at Vista's last last couple of deals. I mean, you're you know, especially in 2018 when the market was maybe hotter than it is today. I mean, folks are paying sorta five on the low end, some for those folks, and then maybe, you know, ten, eleven, 12 x on the high end. Were you sort of in that same range?

Darren Gallop

13:42>> Yeah. You got it. But that that that kinda game. Right? So, you know, it was a life changing. It was a successful exit. Everybody that put money in got money back and then some

Nathan Latka

13:51How much money bootstrapped?

Carbide Launch and Pre-Seed Round

Darren Gallop

13:54>> It's pretty bootstrapped, but we did we raised like some some, like some a little bit of money. We had a we had probably, you know, had a little bit of loans that we took, like some government grant money, some government funded loans, which is a really cool thing in Canada that you can get some fairly, nonintrusive, nondilutive capital put in your business. So, you know, all in all, we probably put about 1,000,000.5 into that business, you

14:18>> know, over its over its time, but, you know, pretty bootstrapped. Let's go

Nathan Latka

14:22over the carbide story. This is running short on time here. So you officially launched that company right away in 2019 or 2020?

Darren Gallop

14:28>> Yeah. So we started working on it kind of while the acquisition was happening and then launched the product in 2019, you know, did a pre seed, then a seed, and, you know, we'll probably be doing a series a in

Nathan Latka

14:42the near What year was the pre seed?

Darren Gallop

14:44>> Pre seed was 2019, the year of the launch.

Nathan Latka

14:47Okay. And what it's pretty standard there, 1 to 2,000,000 raise, something like that.

Darren Gallop

14:51>> You got it. You got it. Yep.

Nathan Latka

14:53Cool. And then you did and I guess why did you you just made a bunch of money. Why go out and sell 20% of your company on day one for for a million bucks? I assume you could have self funded.

Darren Gallop

15:04>> Yeah. But, you know, I I also had other personal projects and other things I wanted to self fund.

Nathan Latka

15:09Okay. I see. You know?

15:11And then you move forward to do the seed round. When was that?

Darren Gallop

15:14>> That was in 2021.

Nathan Latka

15:16Okay. Okay, 2021. And what kind of traction did you need to show in that round to make sure it was a competitive round on terms that you liked about being super dilutive and a lot of negative backfill terms?

2021 Seed Round and Traction

Darren Gallop

15:25>> Yeah, I mean, we were shy of a 500,000 in ARR, know, I think what what helped us, though, was that the space was pretty hot.

Nathan Latka

15:34Yeah.

15:36Yeah. Yeah. I was sorry. I just got your events business mixed up with what your current gonna, like, on. And events in 2021 were were not hot, so you sold the other

Darren Gallop

15:43>> Pretty glad pretty pretty stoked to get out when we got out, to say the least. Yeah.

Nathan Latka

15:47So you did

15:48it this season. How much was the seat for? 4.1. Okay. 4.1.

15:53And then what was the thesis? When you

15:54raised that money, you said, we wanna use this money for x.

Darren Gallop

15:57>> Yeah. I mean, was really to double down on, you know, build out a sales team, bring in bring in a leadership team. Like, it was really just my co founder and I kinda spinning plates, building the business. So we wanted to bring in, you know, a leadership team, some some VPs to run the departments, sort of formalize the business, put a put some more energy behind sales and market, and and put some more energy behind building

16:17>> out our product. Right? Because we were still

Nathan Latka

16:18pretty released. What's the full time c sigh team size today then?

Team Size and Hiring

Darren Gallop

16:22>> Yeah. 34 folks on the team right now.

Nathan Latka

16:25Wow. And that's up from what in 2021 when we did that round?

Darren Gallop

16:29>> I got about 16 or 17, probably, something like that.

Nathan Latka

16:33Yeah. Alright. So you definitely you definitely made some hires there. So and so sorry. Pre seed seed, and you have not done a series a yet?

Darren Gallop

16:40>> We have not done a series a. We are we're we're starting conversations right now, and hopefully, we'll, you know, be talking about term sheets in July.

Nathan Latka

16:49Well, why now? I mean, many would say I mean, some people would hear this podcast and go, man, Darren must really need the money because no one is raising equity right now because the market is so compressed. Now would be the last time you'd wanna raise equity as a

Series A Conversations and Market Timing

Darren Gallop

17:01>> Yeah. You know what happens when everybody thinks that there's a really bad time to do something? It can it can surprisingly be a really good time to do something. So, what I see out there, if you look at the venture market, there's a lot of companies, there's a lot of venture, there's a lot of dry powder, there's a lot of firms sitting on money. So when you have a company, there's a lot of companies that are

17:18>> flat lining right now, they're really struggling to hit their targets. If you are, for us, for example, we're a 105% on target so far this year. So that's in a rough time. Now we've been somewhat conservative looking at the situation in the macro environment to to make

Nathan Latka

17:31attainable targets. Conservative goals. Right. You know? But sometimes,

Darren Gallop

17:36>> you know, investors are investment isn't always magic. Right? Like, it's a lot of, you know, it's it's a lot it's a lot of sort of, you know, looking at America's good opportunities. Like, right now, we're still closing a lot of new business month over month. We've got just different actions that are working, and we wanna put more velocity behind it because it's working. So I think the time to raise capital is when you have the ability

18:00>> to spend money and know that it's gonna result in in revenue growth, then, you know, spending money makes sense. Now we might get shit terms and decide, you know what? Let's just keep boots let's just go more into boots. Let's stay in a more bootstrap mode. Like, at the end of the day, if we didn't do the series a, we're we've got road to break cash flow positive, you know, by by later in the year.

Current ARR and Customer Count

Nathan Latka

18:21What about end of the year?

Darren Gallop

18:23>> Okay. Get it. Yeah. It'd be, like, December, January, February, you know, in that range, we'd be we'd be crossing over into that sort of, you know, cash flow positive point. So that's an option. Right? So, you know, we're out there talking to people like, sure. We're we're not gonna take a shit deal. If we get a real if we get a reasonable deal and, you know, it's again, it comes down to, like, well, is are these

18:41>> terms and is this solution? In the end, is it worth the value of growth trajectory transition that we can apply to the business by executing the capital. Right?

Nathan Latka

18:50Darren, before we wrap up yeah. I totally understand what you're saying. That makes tons of sense. Where are you today, in terms of total customers actively using the platform?

Darren Gallop

18:59>> Yeah. We got about a 190 customers on our platform right now.

Nathan Latka

19:02One nine zero?

Darren Gallop

19:03>> Yep.

Nathan Latka

19:04Oh, that's great. Okay. Well, I mean, at that minimum at that minimum, ACV, told me earlier, I think you said $7,500. Will it be $1,500,000 of ARR, something north of that right now?

Darren Gallop

19:13>> It's quite a bit north of that. Yeah. It's it's north of two. So it's, you know, we're we're we're we have eyesight on, on three in this quarter in this next quarter. So, you know, that growth has has been pretty

Revenue Targets and Growth Trajectory

Nathan Latka

19:24year going, thinking you can break 4 or 5,000,000 or no?

Darren Gallop

19:26>> Be be be pretty much on the doorstep of four.

Nathan Latka

19:29Okay. Okay. And you're on track to do that, you think?

Darren Gallop

19:32>> You got it. Right now, we are.

Nathan Latka

19:34That'll that'll be exciting if you do it. Now just to wrap us up here, you said, what would shit now that we know more than numbers, what would you consider shit terms?

What Constitutes Bad Deal Terms

Darren Gallop

19:42>> Yeah. I mean, like, when you start seeing things like two x participating and stuff like that, I think those become you know? And I'm hearing stories of people being sent these two and three x participating sort of terms, which kinda remind me of the olden days before, you know, people was, you know, the court of invest the the company or founder friendly terms and standardization of terms started to to to materialize. You see some some terms

20:07>> like that. So, yeah, they can be shift terms. Other shift terms could be like

Nathan Latka

20:11influence dilution, though. That just treats that's how cash is treated at the end. I mean, when you think about dilution, say, it's obviously a function of valuation and money raised. Right? So what would you consider shift percent of dilution for the stage your company's at in your growth?

Darren Gallop

20:24>> Yeah. I mean, I I think that that most good funds and good deals are still looking somewhere between 1218%, some maybe 20% ownership in a round of of the series a style round. So, you know, anything in that range is is, I I think, acceptable.

Nathan Latka

20:42Yep. Yep. Very good. Well, that makes a ton of sense. We're rooting for you.

20:44In the meantime, let's wrap up with

20:45the famous five. Number one, your favorite book.

Darren Gallop

20:49>> Oh, man. That's just the moving target all the time. I don't got one for you there. What am I reading now? I'm not really reading right now. I'm reading, like, a lot of, a lot of blogs and a lot of stuff like that and reading a lot of cyber standards because there's been a whole bunch of new regulations coming out just trying to, like, figure out how we're gonna you know, start to figure out where the

Famous Five Rapid Fire

Darren Gallop

21:10>> needle's going. Right? So, like, California's new privacy law, stuff like that.

Nathan Latka

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

Darren Gallop

21:19>> No.

Nathan Latka

21:20Number three, what's your favorite online tool for building the company?

Darren Gallop

21:24>> My favorite online tool for building the company.

21:31>> We use Asana a lot for for building out projects, planning. That's pretty Okay. Pretty important for us.

Nathan Latka

21:37And number four, how many hours of sleep do get every night?

Darren Gallop

21:40>> Between seven and nine.

Nathan Latka

21:42And, Darren, what's your situation? Married, single, kids?

Darren Gallop

21:46>> Married, no kids.

Nathan Latka

21:48Zero kiddos, how old are you?

Darren Gallop

21:51>> I am 48.

Nathan Latka

21:52Last question, something you wish you knew back when you were 20.

Darren Gallop

21:56>> Oh, god. I can make a whole podcast about that.

22:02>> Thing I wish I knew when I was 20. Yeah. I mean, I probably wish I knew how important it was to focus more time on customers and less time on a lot of other things that could become distracting as you're building a business.

Biggest Lesson from Age 20

Nathan Latka

22:16Guys, 2007, he launched a tool for music festival to manage their events in Canada called Mercado. By 2014, he was counting customers like Bonnaroo and Coachella, ultimately grew it into $20.18 to $2,000,000 in ARR profitable, basically bootstrapped with 14 people, sold it for a five to 10 x multiple, and then got into carbide because he was frustrated with all the security protocols he had to do at his first company, Mercado. Now today, carbide has raised to

22:37seed sorry, pre seed a seed. Most recently, that seed was in 2021. They broke 500 k of ARR at that time raised 4,100,000. Today, over 2,000,000 in ARR targeting 3,000,000 by end of q three and 4,000,000 by the end of the year, already serving a 190 customers, helping them do things like SOC two compliance, get expertise in the cyberspace, along with three very powerful feature sets and feature tiers. Darren, thanks for taking us to the top.

Darren Gallop

23:00>> Thanks for having me.

Nathan Latka

23:02One 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 one

23:27pm 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

23:49big fundraise, a big sale, a big profitability statement or 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

24:11up 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.

24:30We 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.