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Convert MRR to cash for equity-free growth

Turn MRR into upfront cash and grow without selling equity | Danielle Messler - Founderpath

How is Founderpath helping SaaS founders?

Danielle: Founderpath is non-dilutive capital for B2B SaaS founders. And our business is helping your business grow. We do that through three things. First, we have capital, community, and tools that we give away for free. We solve financing and capital for B2B SaaS founders. Let’s go back ten or so years. If you had a SaaS company and wanted to grow, you didn’t have many options.

You know, it was either raise a big round with VCs or give away 20, 30% in the first round. Maybe you were lucky enough to have a friends and family round that you could raise, but then, you’re kind of indebted to them for a bit, which some founders have found uncomfortable.

If you’re getting revenue as a B2B SaaS founder, you have subscriptions that can go out for a year or longer. We are giving you an advance on that revenue to invest in growth. If you know, you can turn $1 into $2 or $3. You have those channels ready. We think that you should be able to grow without giving up any equity in the company you’re building.

Founderpath best features

Danielle: Our capital is super fast. We can wire it to you within 48 hours. You get access to our team. We’re a very small and mighty team, and we’re only ten right now. We had a big month last month, and we added two people and planned on staying. And then also we’re flexible. We want it to work for your business.

It’s why we don’t have any penalties for repaying us early if things go well, or we also have flexible terms and discount rates. So depending on what’s important to you – maintaining cash flow and having a lower monthly payment over time- we work with you to get what’s best for your business.

What is the pricing for Founderpath?

Danielle: Most of our tools we give away for free. We do have some paid subscriptions there. It’s difficult to give an exact price because of how the deals work. You get a Founderpath credit score, and you can actually go in the app and play around with how much capital you want to take, what your ARR is, and the length of repayment terms because we could go out to 36 months, which impacts pricing.

Founderpath integrations

Danielle: We integrate with Stripe, QuickBooks, Paddle, Chargebee, and all major payment platforms. That’s how we get that data, your ARR, your churn, and all metrics we use that go into your Founderpath score. We also integrate with ProfitWell, and we have a lot of SaaS companies using ProfitWell.

Happy B2B SaaS founders using Founderpath

Danielle: We’ve got almost 200 founders now. We just had a big month. You were at our SaaStock booth when Janie from Cyber Smart came. He’s a customer, and they have taken some capital from Founderpath, and he was like – I don’t know what we would’ve done without you. And he was not entirely bootstrapped, and they had a small amount of VC. So many founders are leveraging both types of capital, venture capital and debt, in different ways to grow. He’s someone that has benefited from taking capital from Founderpath.

And the stories are kind of countless, right? Nathan calls them the silent majority of these businesses that, maybe, aren’t that appealing to VC, and they shouldn’t be because their goals are to be profitable, not to make investors millions of dollars. Bridget Harris from YouCanBook me as someone who talks about this.

Founder’s business model vs. the VC business model

The founder’s business model differs from the VC business model, and you think you’re making money the same way, but it’s not. A VC makes money on those big bets and that stock price growing, which founders make money from selling a product that people want to use and pay for and covering their expenses.

It sounds so simple, but I think it’s so important to acknowledge that difference. I’m so glad that she is someone who wouldn’t be that appealing to a VC company. Or, maybe she would be now because she’s profitable, but she might be pushed then to finance or grow into an evaluation that was never realistic, and it can kind of torpedo the company.

We’re seeing so many layoffs because last summer, you know, summer 2021 was like the Wild West. Everything was getting funded, hiring huge teams, and now there are all these layoffs because we’re swinging back to profitability. But when you grow a little slower and more sustainably, that doesn’t change in a recession.

Most SaaS businesses will not be like the hundred billion-dollar unicorns; I don’t even know if those ever existed now that we see all the valuations come down. But it is people like Bridget whose game is profitability, and they know they can scale and need a little capital there helping.

Nathan noticed this over his time interviewing SaaS founders and said these founders are profitable. They have great businesses, but they are not getting money to invest in the growth channels, but we can fundamentally change the business.

How competitive is your space?

Danielle: It’s a competitive space. It’s heating up. I think we differentiate in a couple of different ways. One is the longer terms and the flexibility, and it comes down to flexibility, how you run your business, and what’s important to you. We work with our founders to get to a place where it’s a good fit for them. And then I think the other thing that is a huge differentiator is the community around us and how much we care.

We like to say we’re a team of 10, but thousands of SaaS founders support us, and you’re one of them, Cristian. You come to our conferences and webinars. And it comes to life through different content, and the phrase that comes to mind, I think Nathan said this before, a rising tide raises all ships. So, if we can provide this information, this knowledge that other founders have learned, it benefits all of us.

We’re indexing on that community piece because I also think the founder journey can be very lonely, and you don’t always have a counterpart to talk to, even within your own company. And connecting founders has been a huge differentiator for us, and it’s just something Nathan naturally does and truly loves. So I think that those are the ways we differentiate.

I got a DM on LinkedIn yesterday from a founder I had known for a while who was like – wow, you’re at Founderpath now. I love Kevin, who’s your Head of Finance. People know us by name, and they know us very well. So I would say relationships, content, and then the flexibility for capital. Also, the other piece is that we’re all ex-founders in some ways, so we get it.

Being the biggest sponsor at SaaStock

Danielle: I think we and Paddle /ProfitWell were the biggest sponsors of SaaStock. It was amazing getting to meet so many founders in person and meet people I’ve talked to on LinkedIn or Twitter, that was amazing. That was the coolest part for me. I also think seeing everyone wearing the Founderpath t-shirts on day 2, even seeing pictures of people taking them home for their kids and stuff. I loved the conference.

We also had USB drives. We do a different one for each conference with a different mix of documents. The one from Founder 500 was different from this one, and we’ll have a different one coming up in March at our event in New York, SaaSOpen.

SaaSOpen & Founder500 – events by Founderpath

Danielle: Founder500 and SaaSOpen are our two owned conferences. So Founder500 is in Austin in September every year, and that’s more founder-heavy, and it is more of our user conference. And then SaaSOpen is all SAS leaders. Founders can bring their whole team, and you can bring your head of marketing, your head of sales, your CFO, and whoever’s on your team. And we’ll also have many stages to connect the broader SaaS community. And there’s not much in New York or the East Coast for B2B SaaS.

Any piece of advice for people attending SaaS events?

Danielle: It is about your conversations in meeting people face to face and maybe stepping out of your comfort zone a little bit. I’m very introverted, but at conferences, I wear a different hat where I’m like, all right, I’m here to talk to people. And that’s what it’s about, relationships.

Why should people join your webinars?

We started doing webinars back in June. The first one I helped Nathan out with was in July, but I know he did one before. We are a business, so lead generation is a huge push for us with the right kind of leads, of course, but also growing that founder community and the awareness. In everything we do, we strive to provide some value for free. So anyone can join those calls. I even had someone who said he was in e-commerce, but he learned a ton and will come to the next ones.

What is GetLatka?

Danielle: GetLatka is the largest database of private SaaS company information. We have a database of around 30,000 companies. Nathan keeps adding them, so I’m a little rusty on numbers. We provide information from his podcast, so we think of it like an audio database. Where all of the information is direct from the founder’s mouths, they give us their revenue numbers, churn numbers, and things like that in their interview. We put them into a database that you can go and browse.

We have a lot of investors that use it differently. SaaS founders browse to develop growth ideas for similar companies in their revenue range. And we also do have a blog there covering those lessons. And the quarterly magazine, which is usually a big list, and then articles kind of diving a little bit deeper into founder story stories and great growth-based bootstrapped founders.

What is the story of you joining Founderpath?

Danielle: I was a consultant for about a year and a half. I had my own consulting business doing content strategy and serving as a fractional head of marketing /CMO. Nathan reached out in March last year to start working with him on GetLaka because I worked directly at ProfitWell with Patrick.

He’s still a great friend, and Nathan loves the ProfitWell Marketing Engine, so he was looking for someone from there. And we just had a great conversation.

I helped him write some weekly newsletters and then take on the magazine. And then, slowly, he started giving me more stuff. Then slowly, more Founderpath things started creeping onto my plate, and it was after the conference in Austin that Nathan and I were like, all right, let’s do this.

What is your backstory, Danielle?

Danielle: I majored in political science at school in Boston when I went to university because I wanted to be a lawyer. I worked in a law firm and then decided that I did not want to do that. And then, after graduating, I worked in finance for about five years, but I was a little creatively bored on the side. I mean, I love a good Excel spreadsheet and model, but some of the more creative sides were something I was looking for.

I learned photography and different kind of social media strategies and grew a blog on Instagram about brunch and food blogging and travel here in Boston, and leveraged that to get to my first content marketing job, which was with a woman named Mel Robbins, who’s a motivational speaker and author.

When I started, she had an audience of about 20,000 on Instagram, and I helped grow that to 1 million by the time I left, so that was a huge learning opportunity. That’s when I joined the SaaS world and left for ProfitWell. I’ve always loved kind of SaaS, and I took a shot and ended up at ProfitWell, which was awesome.

Piece of advice for starting marketers

Danielle: I think the biggest advice I have is to build something on your own, grow, get into writing, and try to do something on your own first. Why? Because it’s fun and you learn the fastest that way. And I think it’s such a differentiator when you’re in kind of the job search also. You just meet great people along the way who will help open doors. And I also think being overly generous is a huge advantage, but not for ulterior motives.

I just love chatting with people about marketing. I met one of my good friends for the first time in person at SaaStock. We’ve been internet friends for about two years. He has a great B2B newsletter on podcasts on marketing, and I just replied to one of his emails. I love your newsletter. Would you ever be down to chat for 10 minutes?

And what’s the worst that’s going to happen? Someone says no. Or you make a new friend that you know ends up being someone you get Guinness with at a bar in Ireland two years later.

Top 3 favorite software

Danielle: Right now, my top three are Roam research. I use that for all my note-taking on articles I’m reading daily. I’ve also been using Todoist more as a project management tool, and I will also add Founderpath, just like an extra free one. And third, I’ve been using this new AI writing assistant called Lex, which has been great lately.

Connect with Danielle

Founderpath: founderpath.com

LinkedIn: linkedin.com/in/danielle-messler

Podcast Host & Guest(s)

Cristian Dina

Host

Cristian Dina

Managing Partner & SaaS Podcast Host @ Tekpon

Managing Partner & SaaS Podcast Host @ Tekpon

As one of the founding members of Tekpon, Cristian has worn many hats within the company, but perhaps none shines brighter than his role as the charismatic host of the Tekpon SaaS Podcast. With over 200 SaaS industry leaders gracing his episodes, Cristian's insatiable curiosity ensures he always has one more question. Cristian is a community builder at heart, being the Bucharest city leader for SaaStock Local and the author of the best-selling book King of Networking.

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