From Zero to $10M ARR & $160M Funding in Two Years with Vishal Sunak at LinkSquares

Series A, I think I went two for 71. I got two term sheets, 71 pitches, four trips to San Francisco. All no's. Demoralizing. Like so hard. Really long 120 days. Running out of money. I had a newborn at home. Really tough. I didn't know whether we would make it in 2019. If you're a CEO, your job is to meet as many investors who could possibly do a deal on all the time. When it's off cycle, when you're not raising, that's the time for you to go make a spreadsheet, Find people, go to your local networks, meet venture capitalists. There's so many outlets. There's all these great events all over the country. Just like you found where the customers are, find where the VCs are. I need some traction. You need some traction. Let's get some traction.

Hey what's up innovators, entrepreneurs, visionaries and disruptors. This is your Traction Podcast host Lloyd Lobo We're a community of over 100,000 people just like yourself on a mission to help you get the methods, the money and the madness to explode your business growth. Featuring stories and tactical advice straight from those who've done it before, like Shopify, Twilio, Asana, and many more, this episode is brought to you by Boast AI. Each year, the US And Canadian governments give out billions of dollars in R and D tax credits and innovation incentives to fund businesses like yours. But the application process is cumbersome, prone to frustrating audits, and receiving the money can take up to 16 months. Boast AI gets you access to research and development, tax credits and innovation funding opportunities without the headache and red tape. Join thousands of North American companies leveraging Boast AI software to maximize cashback. Check out B Oast AI. This episode is also brought to you by Launch Academy, an international tech hub that provides mentorship, resources, network and the environment for entrepreneurs to launch, fund and grow their startups. Since 2012, Launch Academy has incubated over 6,000 entrepreneurs, of which 300 have grown their startups past seed and Series A and have collectively raised over $1.2 billion in funding. To learn more about Launch Academy's programs, check out LaunchAcademy CA. Special thanks to our Podcast partner Content Allies From Podcast Production and Promotion content allies helps B2B companies build revenue generating podcast. We recommend them to any B2B company that's looking to launch or streamline their podcast production.

Learn more@contentallies.com link squares has grown 1000% in two years. 500 plus brands including fitbit and Twilio as customers, has raised more than 160 million in funding and the company was recently placed number 253 on the annual Inc. 5000 list of fastest growing private companies in North America. And excited here to have Vishal because they're coming off a Series C announcement just two days ago. $100 million Series C and what a rush. All of this in two years. 0 to 10 million ARR, 160 plus million in funding all in two years. What a rush. And Vishal is going to share all about their challenges, lessons, triumphs, failures along the way. Welcome to traction Vishal. You've had a great career right? Before Link Squares you ran operations and product management on high growth tax companies like backupify which was acquired by Datto Insight Square. What made you decide to start Link Squares? What else did you consider?

My dad is an entrepreneur. When I was growing up and I grew up watching him grow a company like from literally the basement of our house to a couple hundred employees. And so as I academically studied engineering like my dad and fell in love with the problem solving, I just said to myself let me keep my mind open on interesting ideas. And I actually job changed into SAS. Right. I wasn't like a SaaS person and an operator my entire life. I was actually building hardware for the military right out of undergrad as an engineer and then from there taking the ride at backupify and seeing what the problems were specifically around the contracts we were being asked to review during the acquisition. That was like a moment where I could have not done it, but I thought it was interesting enough. And I paired up with this really great co founder, Chris Combs and he had that entrepreneurial itch and he had started a couple companies too. And so it felt like something worth pursuing. It felt like a big business problem and something worth pursuing. And we actually started really humbly in the back of a coffee shop Wednesday nights and Sundays when the Patriots New England Patriots are not stop playing and we start. We started from there just exploring things. Fantastic.

What a story. And, and how did you meet your co founder? What is the story that you guys worked together in the past?

Yeah. At backup of 5, Chris had joined the company. We had the desks near each other in kind of the layout of the office. And he was like a huge sports fan. Same with me. And one day I was like, hey man, you want to go to this Patriots game? I got like extra ticket. We become more friendly over the time. We had worked next to each other and it just went from there and then I learned a lot more about Chris and how he had this great entrepreneurial spirit and background and had some of that playbook that I didn't really have on. How do you get something off the ground from literally nothing? And Chris is such a master expert at that. So it's just two guys just thinking through a problem space, meeting up and going from there.

Building a company with a co founder is one of the most satisfying things to do, but it's hard to find co founders. What are your top two or three things you look for in that sort of founder fit, let's call it right? One is what I sensed was you guys fill each other's gaps, but what are some other things that you guys came to align on? To start this company?

When we actually went full time, and that was full time, that was like January 2016. It's just like a clear separation of who's doing what. I had the engineering background, obviously, I took the build of our kind of initial prototypes and software and. And kind of the management of that. Chris had more like a sales account management background. So you're not wrong. We did join together really easily, and the puzzle pieces fit. I think the other thing is we were in the same kind of spot in our lives, like, personally. And so much of the journey comes from, like, personal. The personal interactions that you have. Right. Like, we both were unmarried, we didn't have kids. We had the time to devote to it, and there wasn't anyone who was more busy than someone else out of the two of us. We made that commitment together, and we ended up marrying both of. We married our girlfriends that have been with us for forever. Christina and my wife Shalini. And then we had kids at the same time. We both had little girls. And it's been wild to see us do the journey together. And some of that's so important because there's the personal burn rate at home. Are you in a place, you know, financially to maybe not get paid for a couple years and really devote all your time and effort to this and stay alive? So those are, like, really important things and really great and important things that it just came together naturally.

Both the emotional, personal side of it, aligning values, and then also business side of it, filling each other's gaps.

I love it.

Describe to us what Link Squares does in one sentence.

Yeah, it's legal technology. It's contract management, and we're a category leader now in contract management. So legal teams are our buyers. They use us both to assemble contracts to be signed and Then store their contracts in our post signature like purpose built repository. And we read these contracts with artificial intelligence and tell people what's inside it because that's a really time consuming, cumbersome, difficult thing to get access to that data. Essentially we're a data creation company.

As you were thinking through ideas, how did you know this was it? Did you think through other ideas with your co founder?

We had a kind of initial hypothesis with the backupify acquisition that why did we not know what was in the contracts when we were asked by data who's buying the company? Right. And then that's not enough to like quit your job and uproot your whole lifestyle and start going down the path of being a founder. But we started talking to a lot of just teams and people. Boston is such a vibrant and rich ecosystem for amazing companies. And so as we worked our way through meeting more people, learning more things, there were some really interesting insights about contract management. Like it's a 20 year old industry and a lot of the vendors in the space had focused on what we call like pre signature workflows, like the process to get a contract from first draft, negotiated and signed. But our problem space started way differently, which is we were focused on contracts that were already executed. Like we needed answers to contracts that had already been executed. And so we started on a different side of it. And when we looked at the basic building blocks of a business, are we going to be able to find customers? Yeah. Every single business in the entire planet has contracts. I don't care what your business model is, you have it and that's good. So that means there's a large market. There was obviously challenges with the perception of it being very crowded and then how do we differentiate ourselves and go from there? But we honed in on it, you know, really quickly and stayed true to like our North Star there even from the most early days.

And how did you go about early customer development? How did you find people to validate you? And this could be a thing. How did you get your first customers?

Enough of our kind of mentors nudged us towards like the general counsel as a role inside of a company. And Chris and I knew exactly zero general counsels. The startup that I worked at didn't have one. We were not at that scale. We didn't have a general counsel. We went and we bought 25,000 emails from a really great company who mined them off LinkedIn for us. We paid, I don't know, 25 cents a record and I bought one license to ToutApp shout out TK wrote some cold emails and just started dripping general counsels and just, hey, I'm Vishal. You don't know me. I worked at a tech company that looks just like yours. I think you have this problem around contracts and do you want to chat? Like, you got 20 minutes? You want to just chat? I'd just love to learn about how you all work and what your challenges are. That's how we got started. And we didn't build a massive web application and dump hundreds of thousands of dollars into it. We actually built a clickable prototype, like, on the cheap. It was a Rails app. It didn't have any interactivity. Limited amount of buttons actually worked. And that kind of clickable prototype enabled us to get into a demonstration and ask a bunch of questions and let people interact with us about it. And we made a rule that we were not going to go full blown product development. Even though I'm such a builder and like a very impatient person anyways, like, by my personality, that we weren't going to build anything until we talked to 100 general counsels. And we knew them inside and out. We know what they do every day. We know what their problems are. And that took a long time. That took a year. And eventually it started changing from like, discovery into, like, sales. And they're like, can I try it? And I'm like, no, dude, this is a prototype like this. I don't have anything for you to try. But it gave us enough confidence to be like, okay, maybe we can put a little dough into the actual development process and then keep building from there, but going much more like, there's a problem and I'm going to talk to a customer before we get to a solution. And that was really some of the magic sauce that Chris had as a founder. A very special talent that he has to just stay the course. It was a long year, many days of being like, what are we doing, man? What are we doing right now? But, yeah, I look back now, I laugh. And those are the formative years for sure.

I love it. Not many people talk about this. You got 25,000 emails of GCS general counsels, your ideal customer profile loaded up in ToutApp, started emailing them and saying, I'm an entrepreneur trying to solve this problem. Not looking to sell you anything. Could we hop on a call for some advice, feedback? And they hopped on the call with you. And then eventually it turned into sort of sales, the classic sell shit. And then build it.

I love it, Lloyd. I tell you, one of the first weeks we Ran the drips like we had like unicorn tech company general counsels replying back to us. And it was so funny. We were like we made it. Like we made it, bro. This is taking off and how far away we were from getting them to sign order forms. But it created that momentum and then just every week just keep on getting a little better, learn a little bit more, track it all meticulous tracking.

How did you figure out what's the minimum viable product to build? What's that one feature set that's going to be the aha moment or the deliverer of wow.

It's understanding the pain point before you build the software, right? You got to understand the why. You got to understand why people are suffering. In our case, people were suffering that like we've got all these contracts, some of them are on our paper, some of them are negotiated on our paper, they're like redlined and changed third party paper, which it's not your contract template. You're a lot less familiar with it. It can range in kind of any flavor and size. It could be three pages, it could be 75 pages. And so we started with okay, we know we have to be a repository, so cloud based repository you can upload the files to. And then the big problem we ran into is the digitization of scanned PDFs. You'd be shocked at the sophisticated public tech companies that we work with today, even where like 80, 90% of their historical files are all scanned PDFs. So we had to overcome that challenge. If we could get the text of the scanned PDF. The first thing we built was a little search engine. You can just type in a word and a phrase and mine. Like you're looking for a termination for convenience, which is like a really terrible thing that if SaaS companies do, it impacts your like revenue recognition. A lot of people don't like doing it and they shouldn't. So you could just put in like termination for convenience and hit enter and see all the results of that phrase and where it exists. We got started with a little search tool. Then eventually people were like, I like the search, don't get me wrong. But couldn't you just tell me what is inside the contract with me not having to type it in like Google and I'm like, yeah, cool, that's machine learning, that's nlp, Natural language processing and putting on. Then I put on my engineer hat and I just started reading about NLP theory, how it works and how do you build these systems. And one of my early employees, one of his Best friends was an associate professor at MIT's NLP laboratory. Like, you can't even make this up. Like the most ideal person to ask questions to. So we invited him over for pizza and beers to the office, little office we had. And he gave us the early playbook on you need data and then you need a labeling system, you need a way to annotate it to train the algorithm. And then here's some theory on how to build the algorithm. And we just, you know, kept going. And the AI journey is itself an incredible topic, but it's just not giving up. Trying to just comb your network. Like, who I will call, literally, Lloyd, still to this day, I will cold email the President of the United States. Like, I have no filter on. I will cold email anyone. Like, that's it. We just cold emailed a bunch of people constantly. I still do.

So it just tells me that the company is built on customer first foundation. And if you build a product that customers love and want to pay for, the money will follow. At what point did you raise your first external capital?

So we did a little accelerator program in Atlanta run by a really great founder. His name was Chris Claus. And so he gave us $100,000. We put it on a safe. That was the first money we ever took, like high net worth individual kind of accelerator. So we did that for a summer, for a couple weeks. And then I came back and I said, let's build on that. And we had a couple customers paying us and I did a 500k angel round. And that was all. In Boston, founders combed my network. I worked at one company and backupify. And I obviously went to the founder of backupify. I was like, yo, man, you got to give me something. Just put the stamp on it that you got my back on that, you got me and Chris back on this. And he was like, yeah, no problem. And then went from there. And I said, rob. This is named Rob May. I said, who do you know? And he's, man, I know everyone. And I was like, could you like, give me some more intros? And just kept going, just kept on asking, like, found another angel investor. Who else do you know? And then we hit a vein of five kind of buddies at a public tech company in the local Boston area. And they all threw in and that kind of built momentum on the round. Got some of my family, my friends and family in, you know, I was like, hey, listen, this might be terrible. It would be a really awkward Thanksgiving if I lose all this, but I think we're onto something. And just.

They've all made money. They've all made.

And now they have. Oh, for sure. Yeah. Love it, love it. 500k. That was 2017. And then the next year we did our real first institutional seed round and 2018. Hyperplane gave us the term sheet. Local AI fund in Boston, who had been tracking us for years and had the relationship and basically told him I was going to get to a million at ARR and I was going to raise his capital. A million at ARR. And he was like, okay, yeah, well, we'll see you when you're ready. And you're a little too early for us and the years before. But then I showed up and I was like, hey, John Murphy, I'm at like 750k. ARR, everything I told you. And then we were so thankful to have Hyperplane give us a term sheet. Actually, the day my daughter was born, my first daughter, Alicia, the day she was born, John emailed me the term sheet and it was like a crazy day. That was an awesome day. I'll never forget that.

That's amazing. So you got the product market fit on 5,600k.

Yeah, it's super lean, probably too lean in engineering. We just didn't have the money. We had some hypothesis about the AI, but we were nowhere near the level of sophistication that we have now. We didn't have a lot of cash. The AI journey for us means you need PhDs, NLP scientists, machine learning engineers, AWS infrastructure experts to build all this stuff scalably. But then after we got that seed cache, like we really had enough. We raised 4.8 million bucks and we hired an amazing first Ph.D. gav and our first machine learning engineer, Kiran. And then under the guidance of then my cto, Eric, who's still here kicking around and doing great, we pieced together the strategy, how we were going to build this thing. For real? Yeah, totally. Sell it before it's real, kind of keep learning on it. Wow.

At what point you knew that you have found product market fit? What were the signals?

Yeah, it's a term a lot of people use, right? What does it mean? What does product market fit mean? I think about it a lot. Like under the tutelage of Jason Lemkin's famous blog post on initial traction is 10 people who didn't do you a favor. You don't know them. You couldn't pick them out of a group of strangers. We got 10 customers and then we got 25 kind of the next year and we started to see kind of Conversion rates just slightly start to get better. Like it's getting just a little bit easier the next time and a little bit easier the next time, right? And then as we cruise towards a million ARR, my CRO, Steve, you know, had joined at about, you know, I'd say 600k, 650k. And that's when I convinced him, I think we have something. We have 50 customers and seven people who work in the company, man, like, and it's absurd. It was just like absurd. It was like insanity. Like we were working a million hours every day just trying to keep everything afloat. It was then when I realized that Steve could hire some new reps in addition to like our first employee who had, who has been, had been doing really well at selling it. And then to scale it, repeat it, take Lyle, my first employee, and copy and paste them four or five times and train them up to sell the way that Lyle did. And once that happened and, you know, then we did a 1 to 4 million ride. And that year in 2019, it was wild. We did a 1 to 4 million ARR run. And that's when I knew for sure. And the thing was working. It was definitely working. We had fit. We had a buyer that understood what we were selling and was ready to buy it. And that's when the flywheel really started kicking up.

As you were trying to get validation and customer feedback and build that first minimum viable product. People are asking you, can I pay for this?

Give it to me.

That's a great sign of validation. Now you have paying customers and they're renewing and they're staying and they're engaging in your product. And that's a great sign of product market fit. But in those early days, did you have a no go or go time frame to drop this idea and work on something else?

No. We burned the ships we sailed across to a distant land we burned the ships and I really never looked back. Now in my heart it was like, if this thing fails, I live in a great technology ecosystem. I'm sure I can get another job if absolutely needed, but let's just keep going at it. The hardest year was the development year. When we started selling it. Things got really exciting. Like, I learned how to become like a sales engineer. And I had never been like a sales engineer. I learned how to do a great demo and answer questions on the fly and then build all the security stuff that we needed and know the security piece cold because it would become a system of record of sensitive data. And I never thought it wouldn't make it. Once we made it to a million ARR, I was like so focused on getting to 10 million. And if we can get to 10 million in a quick pace with some more cash and keep scaling this thing, we can keep doing this forever. $12,000, that was our first deal ever. And then you cross a million and it's, oh, my God, this is insane. It's just incredible. And then from there it's, if you want to be the best, it's 10 million in two years. So what do we need to do? How many more people do we need to hire? How many more reps do we need? What do we need to do on the product that's holding us back? Integrations, whatever, just go from there. I never thought it would fail. My wife reminds me that I had moments of doubt, but I never really wanted to eject. I thought this was gonna take off and it did.

Now in the early days, you're cold emailing people, 25,000 email lists, you got some great conversions. How did that evolve past 1 million? Because you probably needed like 50, 60 customers to get to 1 million AR. Is that about right or.

Yep, that's right. Yep.

Yeah. And so then to get from 1 million to 10 million, what were some key things you did to make that journey?

Yeah, so I had a lot of knowledge of B2B SaaS marketing, because my run at Backupify did a lot of operations work inside the marketing team. And I knew that they were just channels that were just not going to be efficient for us. Pay per click advertising, like maybe less than 1% kind of conversion rate there. If we don't have a lot of money, it's probably not spending $25,000 a month on pay per click advertising or content syndication. Like cost per lead programs probably weren't the right fit for us because it's just too expensive and we're not going to get the return as fast as we want. So we kept cold emailing and then we started researching who and where our buyers hang out. What is the equivalent of Dreamforce for the General Council? And there were two events that go on annually. We still sponsor them every year when we attend. And we're a big part of it. There's a corporate legal operations show and then there's the association of Corporate Counsel. And so it was pretty clear that those two events had the best kind of turnout and the best pull and the best draw. And we sponsored it. We had a really small booth at Corporate Legal Ops Conference clock show in Vegas. We flew out there just the three of us manning the booth for 12 hours. We began to realize that like trade shows are actually a phenomenal channel for us. Like we spend a dollar. I think the first time we ever did it, we brought $6 home at ARR on a dollar of spend. That was like the ratio. It was like off the charts. I was like, this is awesome. And so then we did another event and so we started mixing like cold email and then in person events. And then there was another great community tech general counsel, Tech GC Run out of New York and San Fran. They were excited about us kind of being the new kids on the block. Five, six people in the company. And so they get it got us to a bunch of events for free. We're really thankful for them in the early days, but it was about where are our buyers hanging out? Where can we get access to these general counsels? General counsels, they're not like blog post readers, they're not like marketing tech nerds where they're always, you know, looking for that trick that can get you 2% more click through rate on an email or something. Like they're advanced degrees, they're usually older in age. They don't hunt ebooks and blog posts exclusively. So we had to work the strategy to them. If I could get in a room full of 10, 15 general counsels, I was all for it. We would do anything to do that. And I know I just had to bring one deal home. $20,000 deal, $25,000. Commit to one person to buy, pay for the whole thing. We still run that hustle, like we still run that kind of hustle mentality. Bring home the deals that are going to pay for this event. Make it a positive ROI experience.

So there's a key framework here. You start with the ideal customer profile.

Who is that?

Where do they eat, breathe, drink and sleep? Right? And, and so who do they fund, what tools do they buy? Who do they follow? Who are the influencers in the space, what events do they frequent? And you try to dominate that sphere and usually it's one or two things that work and you keep doubling down. Where it fails is where a lot of founders try to try all kinds of different things. Flavor of the month, let's go on TikTok, let's run ads on Instagram, let's do something on LinkedIn. But there's something to be said about in person events. And that's what a lot of what we did at Boast is. We started hosting our own events, going to events and meeting people Anytime you incorporate more than two senses, like right now, we're sight and sound. But imagine we were in person sitting at a bar, doing this. This taste, touch, smell, and building stronger relationships. And you said it right. One deal. You got to figure the roi. How many people am I going to meet there? And what is the roi? Can I walk away with one solid relationship? So that is brilliant. I want to switch gears here. Everyone on the planet has raised tens of millions, if not hundreds of millions of dollars. How did you navigate this hiring and recruiting in 2022? How did you build your team and in what order?

Yeah, Chris and I operated on a really simple philosophy that we were always going to fill up our executive table with people who were like experts and way smarter than us. Him and I could run sales and success and I could run engineering to a point, but eventually to go and recruit great people, the philosophy I always use is like, my cto, Eric, is what every engineer on our team would love to become. My CRO, Steve, is what everyone on our new business sales team would like to become in their career. So if I did a great job hiring a great expert, they would hypothetically have a pretty easy time convincing someone they're going to get exposed to this great expert. I had this kind of expert apprentice type of relationship when I got into sas, where I just was learning at such an exponential rate from all these experts who are just teaching me everything. So I was like, how do we bring this and scale this kind of expert apprentice type of thinking in the company? And so I started with Eric Alexander, my cto. I worked with him at backupify. He was the best engineer I've ever worked with in my entire life, twice. Infrastructure expert, react expert, Rails expert. I was like, if I could land Eric, at least the product side, we would have half a chance. We're going to build a super complicated product. I'd have half a chance of surviving. Andrew Leveroni, now my SVP of product and engineering. Like, he had just been a former founder and he had that kind of hustle and intellectual curiosity. And so Andrew took a different path. Eric showed up as cto. Andrew showed up as like a product manager. He climbed the ranks into being director of product, being VP of Product, and then ultimately with Eric saying, I want to take more focus on technology, like just running the whole, you know, people side of the engineering function. For five years, we've been working together like this. And so the three of us, me, Eric and Andrew, have been working together for five years now. That triad of the three of Us is like really powerful because we have all the context and domain knowledge of all the decisions we made, things we didn't work out. I've been really blessed there. The next executive we hired was my CRO. Steve and I had worked at backupify together and he was like an up and coming up and comer at backupify. We lost touch for a little while. He went out to a bunch of other companies. He grew really quick in the leadership. He was learning from a lot of masters too. And so then we met, he was ready for his next gig and we met and I convinced him that this go to market thing is we're not even good at doing sales and we got 50 customers, man. Imagine if you come in here, you're an expert at this mid market sale, what you can do. And he was like, all right, I'm in. And then so that was like, okay, we got the engineering leadership, we got the go to market leadership right in place. Chris and I sweeping up all the other pieces. The kind of next executives happened. A great cmo, someone that Juliet, someone that I worked with at backupify also, she was original HubSpot mafia and product marketing expert. And Juliet took a little bit longer for me to get and. But eventually I always had someone in mind for the role in my network. That was a real key, Lloyd. Like I knew someone in every one of these roles and I'd rather hire someone I knew than someone that was brand new that I don't know. Like I've seen people's careers over a long arc. And Juliet also was in the right part of her career. She had done a VP of marketing gig for three years. And I made the ask, hey, you want to come join? Steve and I and Eric and Chris were getting the backup of my band back together and she's absolutely, this sounds amazing. And we had a lot of traction and a lot of space for her to operate with and then to follow. It was cfo and you know cfo, when you start raising big money and you need that kind of financial controls and the modeling gets a lot more complicated. The gap revenue reporting and all that stuff. And then my most recent kind of hire was chief Legal Officer Tim. He was my customer. He was the general counsel at DraftKings. He was like, hey, my run at DraftKings is over now and I got a good body of work here. I want to do the DraftKings run again, build a big company. And I said, Tim, you are the. You are will be the rock star of Linksquare as you buyer you are the user buyer. And he said, this sounds great. That was a pretty incredible run that we went on together, just assembling the team. All people I know, basically, there's a key lesson here.

A lot of founders, they try to look and write job descriptions and post it on websites and. But one of the most important things is doing this mapping exercise of what are the gaps I'm trying to fill and who are people I know and love and respect that I can go and evangelize to take a bet on me. And not enough people do that. Life and business is a marathon, and it's neither the destination nor the journey, but the companions that matter the most. And if you know somebody and you can find them and evangelize them to join you, they're bringing their passion and their friendship and they're giving it all.

And there.

And that is crucial. You seem like from our conversation thus far, a phenomenal evangelist. What are some tips, tricks you can recommend to people to evangelize people to join their companies, their missions, to recruit better?

Someone in Boston that I really respect, he talks about building your brand and he talks about in this kind of workshop that I went to when we were much younger in the journey, it's. If you want, convince a bunch of people to sail on a ship with you and the work that's going to require to go and do it. Don't talk to them about hammers and nails and wood, right? Tell them to yearn for the open sea. Give them a mission to where we're going to head to together. I've always thought about that, is people are going to make a decision to come spend a year, two years, five years, 10 years. That little spot on their resume is going to say link squares, and what are they going to get out of it? I'm going to give you more responsibility and more exposure and the ability to build and creatively operate. And that's appealing to some people. It's also appealing not appealing to other people. So for the right people, that is the first thing I've always talked about. You're going to have so much responsibility and control, you're going to be able to operate in your own little swim lane. And that's like not every place you have that opportunity. We're definitely onto something. The evidence is clear. We're definitely onto something. We will eventually take over contract Lifecycle Management as the number one provider. That dream came true in 2021, and we're going to do it together. We're going to have a ton of Fun. And you're going to get exposure to your kind of senior team because we're going to be there working right alongside with you and you're going to learn so much. It's really been about the learning. What can I do for you, Lloyd? Forget about what you'll do for me. You'll do that for me anyways. But it's what I'm going to do for you. We're going to have a ton of fun, a lot of laughs. It's going to be hard, but if we can keep doing what we're doing, we're going to get there. We're going to get there faster than you think. But we're going to have to sell and code and ship and market our way out of whatever. You want a bigger office, we got to show it in the results. Let's do that. One of the things that I did also was just evangelized the entire company around what I needed to succeed as CEO. I'm a first timer. I'm a no name. I didn't go to Harvard, I didn't go to Stanford. I'm a nobody. I'm just a guy. I'm just vishal. Like I'm just this guy. I just exist in the planet. No one knows me from a hole in the wall back in the day. And so I said to myself, I said, how are people going to get take us seriously? I'm going to show up with a ARR chart that you can't deny. You might hate your business and our buyer and who we're going and the competition, but if you look at this graph, you're going to be. It's undeniable that this is not a great company. It may not be your cup of tea to write a check for me or a term sheet, but it's going to be undeniable. And that's how we eventually said, hey, if the chart looks up into the right with a lot of pace, the good things will happen. And the good thing is that can fill up the bank account. We can keep going. This journey can continue. But if the chart doesn't look like this, we're not going to make it because I don't have anything else to give anyone. I don't have anything else. I'm not a 17 time founder. I didn't work at Google. Like I didn't go to Stanford. I got nothing else to give you all. But if you can help me get this, I think I can do enough to make it keep going year after year and just Evangelize everyone around the chart. And I say it every day. I train new hires, I do some training, some onboarding training. Everyone gets time with me, which is so critical, important to me. Like we are all responsible for this chart. If you think you're not, you're completely wrong. Every single person in this company is working on this chart. We all contribute. It's not just the sales team. Engineering is so much connected to this chart. If you don't see it, you're in the wrong spot. But that's how we got everyone, like rowing as fast and hard as we can, just rowing in the same direction every day.

One of the key things you said there is not what you can do for me, but what I can do for you. That is so important. I truly believe that if you treat your people with love and help them grow, they'll treat your business with love and your business will grow. We're in 2022. The great resignation. People care about purpose and experiences more than just collecting a paycheck. And it's the job of a leader to evangelize that. Evangelize people on the mission, the vision, the value, the purpose of the company. And it's not a one and done activity, right? It's like you said, you're doing it day in, day out. There's people who are inspired, motivated, evangelized, excited. They can move mountains. And you've showed it with your up and to the right. 1 to 10 million in two years and 160 million in funding.

Kudos.

Man, that is fantastic. So let's get into scaling here. What are some key things people need to do to ensure that they get from 1 to 10 million and beyond? What are gaps or pitfalls to look out for?

You can't iterate and strategize what you don't measure and track. So first get a culture of data tracking, especially on opportunities, right? Generated opportunities. Like how did you get the opportunity? Was it a cold call? Was it an email? Did it come through a trade show? Know where your deals are coming from, understand data is going to be your friend because it's going to tell you what you have done. It's not going to tell you what you should do, but data is going to help you tell you what you have. Then you apply your mind and then figure out the next course corrections. Course correct often, but course correct it like 1 or 2 degrees, right? If cold email is working and trade shows are working well, do more cold email and go to more trade shows. It's not a time to experiment you can experiment up to 1 million ARR. When you get to 1 million in ARR, you just keep doing what you're doing. You can mix in some more channels like acquisition channels and different things you want to prove. But don't bet the farm on it. Bet the farm on the winners. Like the strategy that you've been doing to get to a million ARR. It's the same strategy. You're going to keep doing it till 10. Customer success and implementation is really important. Obviously varies from we have a PLG free trial product with a Lightbox tour and no human ever talks to anyone. All the way up to we're selling $250,000 very expensive software and it's all human guided, right? Whatever it is, you need to invest in people that have the eyeballs and the time to look at what is going on with the customers. VCs if you desire VC money are going to ask you all this question. Where did you find all these customers from? They're actually asking you for a group of grouping your ARR by lead source. So you need that answer, right? Oh, how did you get all these like how repeatable is that one channel? Oh, it's super repeatable. We're just sending emails out, man. Like constantly sending emails out. Like it's working. And then from there it's why do your customers, why do they buy? What are they trying to solve? How do they use it? How often do they use it? The thing is that as CEO, let's say you're like my kind of sales process, right? It's, it's a 30k sale. The reps we know take five months to ramp. So the worst time to start on a, if you're running on a calendar year, January to December, the worst time to start hiring reps is January for the year that you're in that you need to keep growing. The best time to hire it is five months before that. So every July we knew this was the case. Every July we would think about, okay, if we end the year at 4 million of ARR, then we want to go to 8 million of ARR by the next year. So trying to do 100% year over year, which is how you go 1 to 10 pretty quick, how many reps do we need? How many deals are they going to close? Like again, you're using data and we start hiring those new hiring classes in July and August. We don't start hiring them in January, we start hiring them in July and August so that on January 1st they're ramped or they've ejected. And then we backfilled people quickly and we overhired on AE class too. Right? Get more hires than you think you need because you'll start being able to model attrition by their choice or yours, which is a big part of getting your forecast and how many reps you need. And then if you've done it and you've got, you'll get some kind of back end of the year productivity in that kind of Q4 timeframe. Then in January, your new squad is going to be fully ramped with the ability to take you whatever you need. $3 million new business ARR. And then that's how we did it. We did it in 18. We had a great 19, right? We did it in 19. We loaded up on reps over the summ. We had a great 2020. And most people didn't have a great 2020, but we just, we had the bench strength, we had the ability to power through the uncertainty of COVID and obviously 2021 was off the charts. We went 7 to 17 million in 2021. Like we did 135% year over year. Like with the kind of push of the COVID tailwinds and all that stuff. It's been wild. It's been wild to just see this really basic thing. Hire the account executives minus however many months it takes them to ramp. And then if you do it, they're ready to roll and just start the next year climb. I always say we get one day off a year, that's January 1st. Then on January 2nd, we start the climb again. It's a little depressing, but it's life. I chose this life, right? Lloyd? We beat our quarter plan. This is our 13th quarter in a row. Last quarter we beat our plan. That's how you do it.

With a great culture, a great purpose and great leadership. Everything is possible, right? People build companies, not the other way around. And culture is a huge leading indicator of growth. In addition to having a great product.

And product market fit, I want to.

Circle back to your first 10 paying clients. What level of product readiness did they experience? How did you handle missing functionality, etc. In those days?

Yeah, it was a repository. We would digitize, scan PDFs and we would give you that kind of search engine type of reporting, searching and then being able to drop the output of the report into Excel spreadsheet. So I would say 10% of the product that we have now, you know, like 10, 10% maybe of the product experience that people buy today current.

But that One thing was a must have. And then you created this repository or backlog of features and prioritized it and shipped it over time.

Yeah, we would always say the same thing. Hey, I really need this feature. Like this. That. Yeah, it's on the roadmap. Let me see what I can do to move it up. We're expecting it that it'll be done in the next quarter. And we would call that Just In Time Engineering. I'd be like, I go to Andrew and Eric, my generals of the building of the product, be like, hey, what are we building right now? And they're like, I don't know. We got these kind of things we're building right now. I was like, do you think you could push this one off? Because this customer said they'll buy, but we need this feature. And Eric's man, I don't know. I could just work. I could just work late tonight. I may be able to put something together in a couple of days. Eric, that'd be great. And we just did this just In Time Engineering. It's terrible. I wouldn't recommend it. You have to have the right personalities and the right skillset. But yeah, just in Time Engineering. And then I'd show back up on a sales call, be like, hey, great news. You know, talk to our cto. And this was actually, like I told you in beta, like alpha release, I'm able to show you a free preview. We would say that stuff. Even though it's 100% not true. Eric just built it like two nights nonstop till 2 in the morning. And I'm like, here, it works the way you thought it would. And they're like, oh, yeah, that's great. Okay, cool. You know, I'll let to move forward. And you know, those are the great kind of banging. Two sticks together to make fire as hard as we possibly could every single day.

Just In Time Engineering. How do you prioritize what you release today?

Oh, I don't do that anymore. No more. Just in Time Engineering. We have a mix of strategic priorities. Right? We are launching our own signature E Signature products. So that's like a strategic priority that needs resources. And then we use customer feedback primarily. We have a great feedback loop between our customer success and implementation team and our product team. They meet every week. They comb through the backlog. We also get the new business sales team in there. Hey, I was selling to this vertical or this industry and they needed this integration that we don't have and it blocked this deal. And then we have dedicated product teams like, we have two products and we'll have three products in market next week. But our finalized product, our pre signature product, our analyzed product with our data science team sharing, supporting both, we have our signature team, then we have our integrations team. And then Lloyd, we have this team that just does quick reaction stuff. We call it customer happiness stuff. Like little features that don't need two weeks that you can spend six, seven hours. This button is just not working the way that I needed to. Or like I'm using Microsoft Edge and this, the app kind of doesn't display right in this table. Like and it makes it hard to use. Just like features that just make our NPS score go higher and our customers happy. And they're always so impressed when this quick reaction team jumps on a support ticket or a feedback and they can ship it in a couple of days. And it's a balance between we can't do that all the time. We have a small dedicated team that does that. It's also a great training center for us. Like new hires go and rotate on the quick stuff, the quick reaction stuff. They learn the technology, they learn the, the tech stack, they learn how we code and how we ship through our development process. And then they can go and they can join and rotate on another, they can rotate it on a product team. But it's been a, it's been a great strategy, right? It's been my, my engineering leadership is second to none now. It's quite incredible.

Love it. Now you said something important. We're adding a second product. And if you look at it, most companies that are 100 million in revenue or multibillion dollar companies, they eventually have to add a second and third and fourth and fifth product. Most companies end up becoming multi product companies, becoming platform companies. North of 10 million and maybe much before 50 million. How should founders think about when to add a second product? And how are you making that journey? How did you make that journey?

You may need it, you may not need it. You probably don't need it before a millionaire ARR. You may need it to 10 million ARR to get there. But I'll tell you that it becomes increasingly hard. There's so many factors to consider. Are you building a product that needs to compete with salesforce.com? are you building another CRM where the feature list of a super mature industry is like 1700 features for people expect to be inside this thing or are you more like in a category creator where like when you invent a new product, it is the world's first product of this Kind and the bar, the minimum kind of sellable feature set is much lower. I would say that you need to have two teams. So when you can hire enough people that you can have two teams or use some sort of outsourced team, that kind of splits the priority. Because it's like having two kids, right? You're a dad, Lloyd, like me. It's like having two kids that have different priorities, right? My three year old and my newborn have different priorities and that's going to be like your product development. My three year old was my analyzed product and my newborn was like my finalized product. They need different care and feeding at different times, which actually splits you apart and spreads you two things. What you don't want to do is the thing that is selling, that's driving your ARR. That always has to be the first priority. That's how you make money. That's how you stay alive. You want to add in some other stuff, you got to probably know that it's going to go slower on the development side because you have something you need to keep going, right? You have something you need to keep going. But then eventually our finalized product is super mature enough. How good product development from scratch takes a year. It takes a year and a half. And I'd say release it early, give it away for free, let people use it. That's a lot more valuable than trying to make ARR out of it. And if you just hang in there for a year, 18 months, like two years, it'll. You'll eventually build everything it needs. But you'll let your customers tell you what were things that are missing. That if you're replacing rip and replacing another tool, what are things that are missing? And have patience. Right? Second products. You'll always be frustrated. You'll always be frustrated that you lost this deal because your second product didn't have three things. God, I wish I had these three things. And that's life. That's the founder's journey. That's life. You always got to be a little impatient, but you got to understand it too.

What I'm hearing here is again stemming from the customer's problems. What else can you add to extend that and expand your tam? But also going through that same journey of validation, getting the product market fit and that in scale versus throwing it out there and expecting immediate ARR from it. I like it. Now let's get into fundraising. The market seems to be cooling off in a big way. But you just closed $100 million Series C at an 800 million valuation. How should Founders think about fundraising and valuations in this environment.

If you're like a pre IPO company, which is what we get labeled as pass the B round, price expectations are probably coming way down from 2011. In 2021 the price expectation was really ballooned and this is the correction, right? The valuations aren't as high. Companies have to show up with a more, much more real business. Now if you're doing like pre seed and seed, well, it's probably still pretty frothy, right? You may not be getting 75x ARR or 90x ARR as a valuation multiple for the pre money, but there's definitely so much capital out there, so much that needs to be deployed. Try to show up with more traction, right? Try to show up with more traction. If you thought, hey, I'm going to do a round at 250k ARR, can I do that round at 500k? If I was going to do that round at 500k ARR, can I show up with a million ARR? Sometimes you need to raise because you need to raise, but there's so much capital that's waiting to be deployed that know your business cold, know your metrics cold, know it cold, know what's working. The bar to, you know, raise it is probably getting higher too. And it continues to get higher every year.

A lot of funds raised, a lot of money they have to deploy it and probably the market cooling off from a public market perspective is giving investors a way to negotiate. But still companies lagging, like the private.

VC markets are going to lag like a fund cycle, right? Like people went and reloaded in 2021. Raise a billion dollars, 400 million bucks raised, $50 million, whatever that's like. Got a 10 year fund to commit and they have to deploy it out in the first couple of years and wait for the returns in the back half. 10 years. I would say like the public markets don't impact seed stage investors that much because the liquidity horizon is much longer. They have 10 years to make those returns back to the people they borrowed money from. And yeah, the pre IPO companies, B rounds and C rounds and D rounds. The public market is like the next closest step for you. You're right there where if we want to be a public company, we're probably two years away, three years into whatever it is. It's a lot more scrutiny on me. If you're way like earlier in the journey you're going to, it should be great. Focus on the business. Know your business inside and out, know why? It's working but it's going to lag in a big way. It's going to lag it in the private markets.

But still the top of the market metrics command top of market valuations. If you're doubling your ARR, if you have high net revenue retention, which is your revenue min + upsell cross sell and you have high gross margins, what do you think are the key metrics? Founders, you watch like a hawk going through A, B, C all around. What are the top metrics for you?

Yeah. ARR growth year over year, percentage. And it's infinite. If you can do a hundred percent, great. If you can do 200% it's even better. You can do 300% in one year. That's amazing. Drive that top line. That's what gets you in the door. The chart that looks like this gets you in the door. Right?

Yeah.

Net revenue retention. Net retention is super important. Right. If you have a leaky bottom, no matter how much new business you fill in, you can't hold the water in the tank. Figuratively, it's got a hole in the bottom. You got a high churn problem. High churn scares people away. Yeah. Gross margin, depending on how complicated your implementation is, you got to watch your cost of goods sold. Right. Cogs is actually a really tricky part of link squares that took many years to understand and control and but if you don't have a cogs problem and you're operating in 90 plus 90% gross margin, that's great. VCs want to invest in software companies, not technology enabled service companies where like humans are doing the work that technology is supposed to be doing. If your gross margins like in the 50s, 60s, 70s, it's going to be pretty hard. Right. So focus on technology there also just nps. Is your customer, Are your customers happy? Are your customers happy? Do you have the data that you measure their happiness? I think the average is 27 or 30 is an NPS score. How do you make it 50? What's stopping you to make it 50 or 60? Right. And then burn rate. If you've been fortunate to raise around a capital a couple million bucks or whatever, like how long is that cash going to last for? Everyone's thinking 18 to 24 months. Right. If you burn through $100 million of cash in six months and you got nothing to show for it, most likely the journey is going to come to an end. The journey is going to come to an end. You haven't grown into your valuation. The other thing is don't chase Pre money chase better people. If you had to trade, and I've done this before, trade 5, $10 million on the pre money valuation to work with a better human that understands you and you vibe and you jive. This is a relationship you can't unfurl. It's like a marriage that you can't get out of your board directors, your investors. These are people that are going to be paramount to your future and what goes on. Always trade better people for lower pre money if you have to. And that's like a big thing I've learned, right? I work with so many great people by my own choosing because I said so. I'm not forced into taking money from people I don't want to. You know, I couldn't get a beer with, I wouldn't go to a Red Sox game or Patriots game with, or get stuck at an airport for four hours. These are all the things that are on tangible. Like always choose.

I agree 100%.

Choose better people.

You'll go further if you optimize for the nth degree on the valuation. The first time a major roadblock hits, either they're out of there or you're out of there. If you optimize, always optimize for the relationship. Relationships transcend companies. Tell me a little bit more about your fundraise process. What did that look like? Was that a six month process? How did you build the list? How did you. Which journey? This may be your B round, maybe your B round. Because you see, probably you had all the buzz. What was the hardest institutional round?

Series A, I think. I went 2 for 71. I got two term sheets, 71 pitches, four trips to San Francisco, all nose demoralizing like so hard. Really long 120 days, running out of money. I had a newborn at home, really tough. I didn't know whether we would make it in 2019. If you're a CEO, your job is to meet as many investors who could possibly do a deal on all the time. When it's off cycle, when you're not raising, that's the time for you to go make a spreadsheet, find people, go to your local networks, meet venture capitalists. There's so many outlets, there's all these great events all over the country. Just like you found where the customers are, find where the VCs are. The pandemic's obviously been harder. If you got a little buzz going, people are going to email you, reach out, reach out and say, yes, I would love to tell you about the company. I'll spend 20, 30 minutes with you. I'm not fundraising. There's no deck. It's informal. But they're going to ask you questions. How's it going? What's your story? Who are you? And then you get on their radar. And then if you want to reconnect with them in six months. Hey, Lloyd. I know we met in January. I'm sure you remember it's July now, and I want to give you a little update about the business. You think they're not going to take that call? Of course they are. VCs are in the business of knowing what's going on behind the scenes. And believe it or not, in this financing, Lloyd, I raised 60 million out of the 100 million. Two cold emails. G squared and G2. G squared, they're different funds. Names are crazy, but G Squared cold emailed me. And G2 Venture Partners cold emailed me. And then I ended up being like, hey, cool, let's have a call. We did an intro call. And then I, a month later, I was like, I'm actually gonna do this capital raise. And then took it into the process. Like, the cold email thing is crazy. And take it, make the time, but don't waste time on private equity. Once you raise your seed round, they'll be all. They'll be so interested to waste all your time. Like, you just gotta do two minutes of research. Is this a VC fund or is this a private equity group or growth equity? Like, you're way too early for that. That's not the right fit. How you want to spend your time. But sift through it, take it, need it, it's your job. Try to get 30, 40, 50 funds in your Rolodex that. Then you email them all when you're like, I'm going to go fundraise. I'm ready to raise our next round. You want to chat, I'm starting the process. And then people get in and then good things happen. It's sales and it's pipeline.

I love it. You're running everything like a sales process. And this is great. You fill this pipeline. You build relationships with them. You're telling them about the company when you're ready to raise your signal to them, and then you're sending follow ups, like a sales call, like you would do after a sales call with a prospect. You'd summarize the call and ask them what you'd like to see and keep the process going. How do you drive FOMO and a term sheet. Any tactics you've learned from A to.

C. I Don't do that.

I'm not that guy.

I'm like, I don't know. I'm not good enough at it. I follow this really easy philosophy. Okay, I'm gonna fundraise. I've got the first call set. Let's run the deck. You know, decks are small. Mine's 12 charts, 13 charts, 14 charts. It's not big epics. I don't use fancy deck making. I do it all myself in Google Slides after the first call. 30 minutes. We don't need an hour. I ask one question, which is this interesting enough for you? Do you want to turn the next card on? And I just wait. And some of them are like, yeah, do you have a data room? We've got historical financials in there. Yeah, I have a data. Okay, send a data room. Oh, you want the data room. Okay, cool. Is that. Is that you saying to me you want to turn the next card over? Yeah, I want to turn the next card over. This is, like, pretty cool stuff, what you're up to. Cool. Okay. Yeah, cool. And then it's, what's your partner meeting? What's your process? Then I'd start learning about you. What's your process? And they say, yeah, we meet as a partnership on Mondays. And I'm going to go through the data room. Let's say I'm talking to them on Tuesday. I'm going to go through the data room. Tuesday, Wednesday, Thursday, Friday, Saturday, Sunday. I may follow up if I have a couple questions, but I'll present this to the team on Monday, and let's see what they say. And it's interesting. When you pitch on the Monday or you can't pitch on Mondays. That's it. Like, you have to. You can only pitch on Tuesdays because they're in their partnership meeting all day looking at deals. Typically, if you pitch on a Tuesday, it feels like forever for Monday. But when you pitch on a Thursday, you go like, oh, they already got back to me. Oh, they must be interested. And then, yeah, they come back. And then if they start asking questions and it's like, they're just learning more, and questions are good. It's on you to turn them around really quick. We're done with diligence. There's the initial call. There's. We're in initial diligence. I've sent the data room. They're asking questions. I'm bringing in my executives, like my CRO, my, you know, cmo, whatever. And then we're done with that. We've answered all the questions. Then we're just waiting. So then I email them again and say, hey, I'd like, just let's sync up, let's sync up. Or I'm on the back of a two hour diligence call. I kick everyone off and I'm like, hey, where are you? In the process, just like learning, where are you? What are you doing? And then if they ghost you, I always send the same email. It's like, subject line, what's next? Question mark. Hey, Lloyd, I thought we had some good chats. We got a bunch of other conversations going. And do we have a next step or is it, are we done? Like, do we have a next step or not? Just let me know either way, give them a chance to break up with you. It's just sales. Like a long, drawn out no that started from a maybe is a complete waste of time. Someone who just says no on the first call. I'm very appreciative of that. I have a very limited amount of time. It sucks when you're like, really? You don't know a lot about capital raising, but they're actually doing a huge favor. The long maybe no just drains your soul. And then, yeah, you need the first person to give you a term sheet. So you're just waiting for the lead. You're trying to work them all in parallel as hard as you can. Then one person. We're really excited, Lloyd. Here's a term sheet, man, we're so excited about. Boast what you're up to and what the future looks like. Here it is. Then you email everyone that's, I have a term sheet in hand. And if you want to talk about doing something, we need to talk today. And then they're going to say the same thing. You know what we discussed, we rounded up. Congratulations. We rounded up. It's not the right fit for us. I'm out of here. Okay, great. Sounds good. Perfect. I'm so happy that you said that. I don't have to waste another minute on you. And then other people will be like, okay, yeah, so, like, how's the term sheet? You never say who it's from. You never say who it's from. That's for me to know and for you to find out in the press release. If you don't do this deal, I'm like, yeah, it's at the price that we wanted and it's raising the amount of money. I told you. And I was like, so what about you? What are you going to do? And they're like, yeah, cool, we're going to put a term sheet together. Okay, man, TikTok don't have an infinite amount of time. These term sheets don't last forever. I gotta do what I always say the same line, you got a job to do, I got a job to do. I gotta do what's best for the company. I can't wait around 17 weeks for you to write me a term sheet. When are you gonna give it to me? Okay, I'm gonna give it to you tomorrow. Okay? If tomorrow comes and goes. You told me everything I need to know. It's like I don't, you know, I was just pretty straight up, no games.

There's a couple things here. Controlling the pace, bringing people along in parallel at the same time. So you're not getting term sheets or you're not bringing people along at different times. So you said, that is a great one. And then giving people the opportunity or the reason to say no. It's so many people just hang on for dear life thinking hope is not a sales strategy. Right?

It's not a fundraising strategy either.

Say no.

One of my mentors, one of my mentors said to me, you want to learn about fundraising? Let me teach you. Let me teach you it. Okay? If you looked at the most beautiful woman crossing the street and if I said to you, vishal, describe her to me. But you can't use anything about her physical personality, physical traits, and you can't talk to her, how do you know that she's beautiful? He's, dude, it's happening up here. It's happening deep inside your brain, like at a level you can't synthesize. If I don't give you words, and that's like fundraising. If you walk into a VC's office, it's visceral, it's chemical. The day they meet you. And if it's not chemical, it's never going to be chemical. It's just never going to be chemical. They're never going to get there. But I've had these chemical moments happen five times now where it's just, oh, yeah, there's a little rough edges in the company, like every company. But they see it, they're excited, you can hear it in their tone, their demeanor, their body language. They're all over it. It's firing so deep inside your brain, it's like firing so deep inside their brains that they're just telling you everything they need to tell you without even talking to you. And the way they're talking to you is they're following up, they're on time they say they're going to do something tomorrow, they do it. And the thing that drags people down in fundraising is you think it's chemical and they don't want anything to do with you. You think it's really chemical, but you're not being honest to yourself. And now it's funny, my whole exec team knows the chemical thing. And then we get off like a call and they're like, it's chemical. I'm like, I know it's chemical. It's gonna happen. Just keep going, everyone.

Keep going.

It's chemical.

100% deep inside. And when something's gonna happen, conversations, like the messages and the flow of messages and the communication intensifies and intensifies. And if there's like, long gaps, like, unfortunately, ghosting and time kills all deals. As you look back, what was the toughest or lowest point of your journey and how did you navigate it?

As I was in diligence from the Series A, there was a mistake on our income statement, and it was a mistake with a vendor invoice that was being binned as R and D when it needed to be binned as gauze. And it was something that I missed. And it's not the person who was running finance for us at the time. She's the absolute best human being on the planet, like, the nicest person you ever meet, and made a mistake on an income statement, an honest mistake, not like Theranos wire fraud. It was an honest to God mistake. We used one vendor for multiple things, R and D and cogs activities, and we all mistakenly got binned as R and D. And then our gross margin was actually way worse than I thought it was. And that was the lowest point of the journey. When we had a term sheet in hand and I didn't know whether we would keep it because the financial kind of underpinning was wrong. And I didn't sleep for three or four days waiting to hear back. And finally we heard it was all clear and the impact was minimal. But I didn't sleep, I didn't eat, I couldn't think. I had insomnia. I was pacing around my house and I was so upset at myself. Like, I was so upset at myself that I let this thing happen. And it's all on me. I would never, ever point the finger at anyone else. That's being the leader. You never point the finger at someone else. When it's like a mistake like that. I would just.

It's me.

I made a mistake. I'm so sorry. Here's the real data. I worked all weekend like figuring it all out, how it happened. It's a honest to God mistake in Bill.com, like the way we use Bill.com or whatever back then. And I learned a really valuable lesson. You are what the spreadsheets say you are and the spreadsheets better be 100.0% accurate at all times. Then I hired a great CFO. He's built an amazing financing. That person still works for me and she's the absolute best. We love her to death. And it was like a story. I don't even know if I told her. It's like one of those moments where you got to own it and that was a real low point. But we got through it and I never want that to ever happen again. We never want that to ever happen. That was a real hard moment.

Buck stops with the CEO man. And you know what? That's the way to do it. It's always the fault of the CEO and you got to own it. And you can only control what you can. But I can't recommend this enough. I had a lot of of moments during our Series A as well. A lot to do with financials because you are running a scrappy startup and I can't say strong enough. Find a CFO that's going to make.

Fractional, fractional part time. You don't need to make 400k on your payroll fractional. 3 hours, 10 hours. But get your models, get your income statement right. Do your gap, bring them on the fundraise. If you're not an accounting expert, don't answer a bunch of accounting questions on the fundraise like you're not an expert. You'll look like a complete idiot. Like and never ever do your financials incorrectly. Make sure you do them at 100% precision.

Your, your whole fundraise is based on that decision. And these little mistakes there. There's a fine line between looking like a mistake and a fraud eventually. And so you gotta, you got these things kill your credit credibility. And I can't say this enough. Hire that fractional cfo. Don't be pennywise and pound foolish.

And double check. And also say Lloyd, double check. The way you calculate the core SaaS metrics. Did you do your net retention correctly? Did you include are you over inflating your net retention with customers that are in multi year agreements? Like you're going to get caught on all this stuff. But make sure you do the metrics correctly. Be honest about them. Honesty is the only way to do it. We got into a scenario where we just, we close 124 logos in one year. And we closed like 60 and 30 days. And that put this kind of cogs load. That the way that we were doing implementation couldn't scale. Like it wasn't ready to scale. It actually did the opposite of scaling. It took off from the launch pad and turned back down to earth and blew up. It was like that moment where this part of the business is broken that needs more optimization. No, we had been like operating low 90% business and then took a big dip. It's just you're the product of your own success. You go 1 to 4 million in one year. You know, 124 logos. There's 12 people in the company. It's like on fire everywhere, constantly. You're just trying to hang on. Like you said, you're just trying to hang on for dear life. And that's when I knew this thing was going to go hot and heavy. But we needed to start thinking ahead now, six months ahead, hey, if we do 250 logos one year, what's going to happen? Okay, we got fix all this, get out ahead of it. It's your job as CEO, right? I live just in the future now because on this quarter, someone already figured it out. They're running this plan we thought of a year ago. I think of what's going on next year, in the years after that, and that's my job now.

Are customers happy? Are employees happy? Is there cash in the bank?

Those are key things. And get out of the way. Hire a bunch of experts and get out of the way.

What's the one piece of unconventional advice founders you talk to typically ignore but shouldn't?

Not giving up goes a lot further than you think. If you don't give up, you're more likely to succeed. But most people are like, this is too hard and I'm going to give up. And this thing failed. But not giving up is worth a lot more than you think.

Anything good takes a long time to build. Jason Lemkin's been a mentor of mine. He gave us a free booth for Boast at saster in 2017. I just had him on the show a few weeks ago and he said it takes a lot of effort to get to 10 million. But once you get to 10 million, and unless you have some massive founder issues, why sell? Because he sold early. And today Adobe esign is doing billions in revenue. And when he sold Echo Sign, he sold early and he says as a founder, to build another company and take it to 10 million is hard. What better thing you have to do for another 5, 10 years than to take this thing from a 10 million to 100 million in revenue? Why not persevere? Even if you're growing at 50% year over year, it may take you 10 years to get to 100 million. And so that is, I think the key learning here as well is anything good takes a long time. Not giving up is worth a lot. Such a pleasure, man. Thanks for joining us.