We might not raise vc anymore... | Vlog #72

We get so many people that like live chat in, like, I'm trying— because it's like call tracking, you know, so they're like, oh, we're trying to like track, like, I think my husband's cheating, or I think my boyfriend's cheating. Guys, a lot going on. I want to give everyone an update on where we are with everything. Techstars is over. It was actually an amazing experience. I've been using these spreadsheets really effectively. Now it is back to the grind, and we have to get the business growing really, really fast again. We're getting new customers, like one of our biggest weeks that we've had in a while. We're getting customers porting their numbers from existing platforms, so we're having to like really like manage that. We're getting live chats, so those are like kind of time sucks. And we're trying to hire as well. I'm trying to hire sales reps because like I figured out that like our outbound sales reps are cash flow positive and like ROI positive for the company. So we need to just scale that and hire, you know, like 5 sales reps immediately because they are able to bring in more money than they cost, right? And we'll do that all day. In addition, we're trying to get a customer success manager to help with like onboarding and implementation and setup and things like that. So it's like, we're doing all this stuff while managing the fundraising process and it's fun. Like it's definitely like super fun, but just wanted to update you guys on kind of like where we're at with everything. Like ask us any questions too. If you have any like questions around it, I'm like super transparent as you know, and happy to like answer anything or help you out or give you intros or whatever it is. But like definitely like let me know if you have any questions. So I'm gonna get back because I actually have someone else coming into the office in like 20 minutes. I gotta finish something else up right now. You guys will follow along. So see you guys. LTV is actually like going up and CAC is going down. This is, this is the last 3, like each of these columns is the last 3. So these are L3. So like, look, like the calculation, this is like 3 months. Holla, how's it going, Mike? Getting a math lesson right now. 3 months. So this is a 3-month average. So that's a 3-month average in September versus the 3 months. Hey, uh, quick question. If I'm gonna just show like a CAC and LTV ratio, do you think I should show over an hour For super details, it's either we're gonna do 3 months or just 1 data point, but either way we use some type of chart. We show like CAC and LTV and how it's pulled away and we just show the 5.37. Hold up, hold up, let me actually go back to the start. Eric, it's Jim, Gandalf of Home with PhoneWagon. Not sure if that rings a bell or not. Uh, I said 175. Yeah, 175. Yeah, I just wanted to jump on, just introduce myself. You know, obviously we also offer a 30-day money-back guarantee. So it's like we always tell everyone, it's like there's literally no risk to come on board. Cool. So stay high level, man. This is cool, man. Thank you so much for jumping on it too. This is going to be good. Nick, it's Jim. Yeah, yeah, that's great. Yeah, dude. I don't have a phone here. I thought you had something. Oh, didn't that little camera shoot wrong? Sorry to interrupt your camera lens talk. So, like, whenever he gets the numbers, like, how does he actually add them into the account? Hey Adrian, this is Ryan Shank from PhoneWagon. She's just looking to track his phone. Okay, well, good luck with it, I guess. You think she's crazy? I don't know why she— I don't know why you would think that. It's not a good use case. We get so many people that like live chat in, like I'm trying— because it's like call tracking, you know, so they're like, oh, we're trying to like track, like, I think my husband's cheating, or like, I think my boyfriend's cheating. It's always the middle of the night. It's always late night, late night live chat. And they never spell everything right either. Are all Mexican numbers $5? They are, right? Right, you can actually— so you can use our number, the one that I was about to get for you, and you can forward it to the regular number. Thanks, I need it now. So basically what we're doing right now is we're finishing up our pitch deck deck because we're talking to a lot of investors. So we're gonna raise a round of funding. Everyone wants like a completed, you know, slide deck. And so we have to finish up that. And we're actually— the thing is like where we have a version, it's just, you know, we're trying to fix it so that it tells the story really well. I think right now like the flow of it is a bit off, like it doesn't flow right. So we're trying to get like the right slides that have like, you know, a mix of, you know, storytelling but not too much text but not too little text because it's going to get distributed them and I'm not gonna be able to walk them through it all the time and it's gonna get forwarded around and things like that. So, all right. The hardest thing left to build is the mark. No, that's easy. Honestly, it's that and then it's just text. It's like problem. I don't know, but what is the text? What is the text? The text is the things that we have on the other side. So advertisers are gonna put identified over $50,000 in ads that were underperforming. He was gonna reallocate that. He'll generate, yeah, boom. Alex, I don't feel like finishing this deck. Over and out. Can't they just trust us that like we got it? Over and out. I want to put this on there though. What? This sweet graphic. Yeah, that is a good graphic. And like this too. What is it like? I'm sorry, Mike is like so attached to these like graphics that it's like that's why it's so many slides because like he couldn't part ways with them. I need them all. Some kid who watches the vlog just emailed me. He wants a job. He's like, I've been following your process and I wanted to put myself on the map if you need any help. I saw one of your last videos that you finally were able to create a scalable way to set up demos, and I'd love to be a part of that. I have previous startup experience as a sales developer and have used Close.io before. I'd love to chat one of these days, see if you'd be interested in expanding your team. I'm currently on the West Coast in Canada. So I think that could help you expand to Canada or the rest of the West Coast. I also speak Spanish, so that is a huge asset we could both take advantage of if you were interested in targeting Hispanic agencies. I'd love— See, but you— I feel like we need to call out like he doesn't know what's working and what's not working, or it could be like, facts. You were like making fun of me when I put that earlier. You put facts earlier? Yeah, in the last deck you were like, facts. That's kind of what we're going going through. I just had a call today with, uh, with a VC. Got another one coming in today. I got another call later. Like, we're talking to a ton of people right now. Everyone's like pretty interested. Everyone wants to see the final deck, I guess, before they like hard commit. We don't have the deck, so no one's committing and all this stuff. So it's kind of this little dance, but I am getting people engaged and I'm getting their feedback and stuff like that. Look, do we raise as little as possible right now? Because the thing is, it's like if we raise— whatever we raise now, we're basically selling equity at the cheapest that it's going to be in theory. In theory, the business grows, and the valuation goes up and it's worth more over time, right? But if we sell, you know, say if we raise, you know, $1.5 million, which we're probably gonna do, uh, at, you know, the valuation that it is today, we're going to be selling off a good chunk of equity. However, if we only raise like $500,000 and that's able to then get us to, you know, like a million, million and a half in revenue, we can raise it probably double the valuation that we are today. So that's kind of the exercise that I'm thinking is like, I would rather like raise as little as possible, have to operate really efficiently, roll the dice even more, control my own destiny. We're gonna retain a lot more equity if we execute, right? And it's like almost everyone's interests align because it's like then we're not taking as much money. The opposite side of it is you want to be able to raise what you can while you're hot on the streets. If you're uptown, if you're downtown, if you're Midtown, if you're SoHo, you're NoHo, you're a Boho, you gotta get Goldwagon. You want to have cushion in case like things go wrong. And then the other thing is like investors want to invest more now because it is the cheapest that it's going to be. So there's kind of like that balance right there, like playing out different scenarios. I'm looking at, you know, different like pro forma cash cap tables, which is basically, you know, looking at, you know, before the transaction what the cap table is, the transaction, and post, post-transaction, and then how much equity we would like retain, uh, in each of those different scenarios. So that's what we're sort of like figuring out right now is like how much do we actually raise. Realistically, we'll probably end up raising like $1.5 million just because, you know, it's going to get us to like 2 years, 2 years of runway. It's going to take us to like $200K in MRR, which in theory should take us to around like a $20 million valuation. And it'll have us coming out cash flow positive. So like all of those things are good, good outcomes. Like even right now, it's like having to create this deck, like it's taking Michael's time. Like he needs to be working on, you know, the product and managing the engineering team and doing like design stuff there versus like creating this like pitch deck and crafting slides and stuff. I mean, he's doing like such an amazing job. Like he's absolutely knocking it out of the park, which is like a huge, like I'm super, super grateful. It's just like, sucks having to go through this exercise because, you know, we could be spending that time and energy and resources towards the actual product and serving our existing customers. But in theory, you know, it's actually helping us serve our customers later because we're getting funding, which will allow us to have more resources and more, more headcount, which will then make a better product for the customers in the future. So I've just been doing like a bunch of calls with like investors. I have a doc of like how much people are going to invest, who's like fully committed, hard committed, who's kind of pending. I think probably most of them will like hard commit and will be fully committed, will probably be oversubscribed. Um, but you know, it's still a process of like having to walk them through like draft of the deck, the actual deck, the, the financial model and things like that. So don't tell me we don't have dynamic numbers.