Two founders discuss how Seventh Level generated $25 million in revenue from a single sales funnel. They cover bootstrapping versus taking venture capital, how they valued the company, and the specific funnel mechanics that drove their growth.
Put that coffee down.
Just talk me through exactly like how that came to be. Because last year you got the 10 million.
Yeah.
And then this year 25 million for the same funnel. Right. Like it's the same thing. We're selling seventh level.
Yeah. Like it's the same funnel though, because we have other things going and we make money.
Right.
So that funnel made an additional 15 million.
Right.
And we made other money through other means, but it's from that funnel.
And, and give me a breakdown of the numbers because it was like when you're talking growth, because that, that's a part of that as well.
So seventh level is the 391st fastest growing company in the US according to the 5000. Obviously you've got to register.
Yeah.
For that. Most high growth companies do though, because it's a good way to get VC funding and stuff like that. And we were the, we were the. I don't want to misquote it, but I think it was like 21st fastest in the US in services.
Okay.
Right. So we did really well. It's a very fast growing company.
Can you give me some context to that? Like that's a number. 21st fastest growing or one of the.
Few companies that made it that didn't take capital.
Okay.
And I'd say we'd be in the top. Like if they had an category for non fundraising companies, we'd be in the top, you know, 30 or 40, I would say. So we went from, we, we had some sort of like 576% growth and we won it in 21. In 2020. 2020. We were like 1200 in 2021, which is the last one because it's kind of retrospectively, it's based on finance. You have to submit your financials. Like it's very, you can't fudge it, you know.
So I was going to lie and say for the audience to help them understand, but for me, to help me understand, taking capital would mean that a business can go from zero. They've. They borrowed the money but then they grow fast because they just a giant business immediately.
Yeah.
Whereas you have bootstrapped it. Yeah. So didn't take any money from everyone. From anyone. Each sale goes to the financing of building the company and going from there. Yeah.
So like when you, when you take funding, like when you go and raise capital, it does a few things. One, it like it gives your business and probably an artificially high valuation because there's different modelings of. There's like a financial valuation which is like, hey, you make this much money, there's a standard multiplier of your ebitda, right? Which is, you know, your earnings, you put back in all this stuff. And then from there there's like a standard industry multiplier. And then when you get vc, when you start looking at money, what they'll do is they'll have a look at like an internal rate of return. So it's like, well, if we're going to come into this business, what can we get out of it? So they'll give you much larger multiples, right? So then all of a sudden you have a business doing a million dollars a year and it's valued at 900 million, right? You know, like, I know a business at the moment, they have an app, like a business card app. They do a million dollars a year revenue. They have a one billion dollar valuation, right.
Because it's getting it. Like, that's.
No, that's not. It's not what you think.
It doesn't have to do with it. Like, we see the trajectory you're on.
Not really that valuation. It doesn't have to. It can have. What does it provide me in my other businesses? Like, if that person has a huge user base, right? But the revenue will never get above, say, 10 million. But it has an enormous user base. Like WhatsApp, for example. Like WhatsApp was bought by Facebook for a crazy, crazy, crazy, crazy multiple because it had the database of people and it could now communicate with people on a separate means and then get that database in. Right? So the internal rate of return for Facebook is enormous because now it's got more people for its advertisers to go after.
Right?
That's why they went after Snapchat. You know, Snapchat didn't sell and now they're worth fucking kajillion. You know what I mean? But like Twitter, for example, has a multiplier of 170 times revenue, right? Twitter doesn't make that much money. So, you know, it's like it's less than $100 million a year Twitter makes, right? That's not that much money. You know, Floor Payne's making more than Twitter.
Yeah. So the value is not in what it. The money it makes, but the other ways you can make money. By owning the data that it has.
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