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Oct 7, 2023 · 15m · top-founders

Economics of a $37,500 Pre Seed Uncapped Convertible Note

Steve Petersheim · 9m spoken Nathan Latka · 3m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this founder interview, Steve Petersheim discusses bootstrapping his B2B SaaS platform Manageable to $1,700 MRR using a $37,500 uncapped convertible note and customer pre-payments. Petersheim outlines his platform's workplace communication framework and details his decision to step away from consulting to commit to the software business full-time.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 27.6% of the talking time here. How this is scored →

Nathan as informed peer 5.7 Guest teaching 2.0 Guest disagreement 1.3 Nathan pushing back 3.8
05100:0010:000:39–2:40 · Nathan as informed peer 5/10 Executive Summary of Manageable's Founding and Growth Nathan introduces the company with financial stats and makes an assumption about Steve coming from real estate. Steve gently corrects his background, explaining he came from newspaper distribution operations and HR.2:41–5:34 · Nathan as informed peer 6/10 Manageable's Core Value Proposition and Communication Model Nathan pushes past vague descriptions of culture to drill down directly into pricing mechanics and customer count. He computes the exact MRR from seat counts and per-employee pricing.5:34–7:59 · Nathan as informed peer 8/10 Pre-Seed Financing and Convertible Note Mechanics Nathan sharply scrutinizes Steve's uncapped convertible note terms, pressing on what happens if no conversion event occurs before the deadline. Steve admits there is no agreed valuation cap and that they would have to negotiate later.8:00–10:28 · Nathan as informed peer 5/10 Pioneer Pre-Payment Strategy and First Customer Acquisition Steve explains how COVID interrupted fundraising, leading to their pioneer pre-payment plan. Nathan keeps the conversation grounded by asking for exact contract figures.10:29–13:32 · Nathan as informed peer 6/10 Scaling Beyond Beta and Shifting into Active Sales Nathan challenges Steve on taking five years to build the MVP while consulting and asks how he balances personal financial obligations with going all-in. Steve openly explains his life stage, divorce, and treating Manageable as his retirement vehicle.13:33–14:39 · Nathan as informed peer 4/10 Famous Five Rapid-Fire Questions A standard, friendly Famous Five rapid-fire closing without confrontation or disagreement.0:39–2:40 · Guest teaching 4/10 Executive Summary of Manageable's Founding and Growth Nathan introduces the company with financial stats and makes an assumption about Steve coming from real estate. Steve gently corrects his background, explaining he came from newspaper distribution operations and HR.2:41–5:34 · Guest teaching 2/10 Manageable's Core Value Proposition and Communication Model Nathan pushes past vague descriptions of culture to drill down directly into pricing mechanics and customer count. He computes the exact MRR from seat counts and per-employee pricing.5:34–7:59 · Guest teaching 1/10 Pre-Seed Financing and Convertible Note Mechanics Nathan sharply scrutinizes Steve's uncapped convertible note terms, pressing on what happens if no conversion event occurs before the deadline. Steve admits there is no agreed valuation cap and that they would have to negotiate later.8:00–10:28 · Guest teaching 3/10 Pioneer Pre-Payment Strategy and First Customer Acquisition Steve explains how COVID interrupted fundraising, leading to their pioneer pre-payment plan. Nathan keeps the conversation grounded by asking for exact contract figures.10:29–13:32 · Guest teaching 2/10 Scaling Beyond Beta and Shifting into Active Sales Nathan challenges Steve on taking five years to build the MVP while consulting and asks how he balances personal financial obligations with going all-in. Steve openly explains his life stage, divorce, and treating Manageable as his retirement vehicle.13:33–14:39 · Guest teaching 0/10 Famous Five Rapid-Fire Questions A standard, friendly Famous Five rapid-fire closing without confrontation or disagreement.0:39–2:40 · Guest disagreement 2/10 Executive Summary of Manageable's Founding and Growth Nathan introduces the company with financial stats and makes an assumption about Steve coming from real estate. Steve gently corrects his background, explaining he came from newspaper distribution operations and HR.2:41–5:34 · Guest disagreement 1/10 Manageable's Core Value Proposition and Communication Model Nathan pushes past vague descriptions of culture to drill down directly into pricing mechanics and customer count. He computes the exact MRR from seat counts and per-employee pricing.5:34–7:59 · Guest disagreement 3/10 Pre-Seed Financing and Convertible Note Mechanics Nathan sharply scrutinizes Steve's uncapped convertible note terms, pressing on what happens if no conversion event occurs before the deadline. Steve admits there is no agreed valuation cap and that they would have to negotiate later.8:00–10:28 · Guest disagreement 1/10 Pioneer Pre-Payment Strategy and First Customer Acquisition Steve explains how COVID interrupted fundraising, leading to their pioneer pre-payment plan. Nathan keeps the conversation grounded by asking for exact contract figures.10:29–13:32 · Guest disagreement 1/10 Scaling Beyond Beta and Shifting into Active Sales Nathan challenges Steve on taking five years to build the MVP while consulting and asks how he balances personal financial obligations with going all-in. Steve openly explains his life stage, divorce, and treating Manageable as his retirement vehicle.13:33–14:39 · Guest disagreement 0/10 Famous Five Rapid-Fire Questions A standard, friendly Famous Five rapid-fire closing without confrontation or disagreement.0:39–2:40 · Nathan pushing back 2/10 Executive Summary of Manageable's Founding and Growth Nathan introduces the company with financial stats and makes an assumption about Steve coming from real estate. Steve gently corrects his background, explaining he came from newspaper distribution operations and HR.2:41–5:34 · Nathan pushing back 4/10 Manageable's Core Value Proposition and Communication Model Nathan pushes past vague descriptions of culture to drill down directly into pricing mechanics and customer count. He computes the exact MRR from seat counts and per-employee pricing.5:34–7:59 · Nathan pushing back 8/10 Pre-Seed Financing and Convertible Note Mechanics Nathan sharply scrutinizes Steve's uncapped convertible note terms, pressing on what happens if no conversion event occurs before the deadline. Steve admits there is no agreed valuation cap and that they would have to negotiate later.8:00–10:28 · Nathan pushing back 3/10 Pioneer Pre-Payment Strategy and First Customer Acquisition Steve explains how COVID interrupted fundraising, leading to their pioneer pre-payment plan. Nathan keeps the conversation grounded by asking for exact contract figures.10:29–13:32 · Nathan pushing back 5/10 Scaling Beyond Beta and Shifting into Active Sales Nathan challenges Steve on taking five years to build the MVP while consulting and asks how he balances personal financial obligations with going all-in. Steve openly explains his life stage, divorce, and treating Manageable as his retirement vehicle.13:33–14:39 · Nathan pushing back 1/10 Famous Five Rapid-Fire Questions A standard, friendly Famous Five rapid-fire closing without confrontation or disagreement.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 47.2% · guest 52.8%0:00 · Nathan 47.2% · guest 52.8%3:00 · Nathan 20.2% · guest 79.8%3:00 · Nathan 20.2% · guest 79.8%6:00 · Nathan 20.1% · guest 79.9%6:00 · Nathan 20.1% · guest 79.9%9:00 · Nathan 22.3% · guest 77.7%9:00 · Nathan 22.3% · guest 77.7%12:00 · Nathan 27.1% · guest 72.9%12:00 · Nathan 27.1% · guest 72.9%15:00 · Nathan 57.6% · guest 42.4%15:00 · Nathan 57.6% · guest 42.4%
Sharpest disagreement ▶ 7:14 Steve defends relying on good terms without a set cap

Steve pushes back against Nathan's skeptical framing about legal conflicts with investors by asserting a close personal relationship with his former employer.

 Hardest push from Nathan ▶ 7:10 Nathan warns of investor fallout on uncapped notes

Nathan refuses to accept Steve's relaxed assumption that investor terms can just be negotiated amicably later, citing personal experience with family and angel disputes.

 Biggest teaching moment ▶ 1:13 Steve corrects Nathan on career origins

Steve dispels Nathan's assumption about leaving real estate sales, clarifying his true origin in newspaper distribution operations and HR.

 Nathan holds their own ▶ 6:33 Nathan exposes structural flaws in convertible note

Nathan demonstrates venture finance mastery by immediately identifying the absence of a valuation cap on the convertible note and grilling Steve on the resulting risk.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Executive Summary of Manageable's Founding and Growth 5422 Nathan introduces the company with financial stats and makes an assumption about Steve coming from real estate. Steve gently corrects his background, explaining he came from newspaper distribution operations and HR.
Manageable's Core Value Proposition and Communication Model 6214 Nathan pushes past vague descriptions of culture to drill down directly into pricing mechanics and customer count. He computes the exact MRR from seat counts and per-employee pricing.
Pre-Seed Financing and Convertible Note Mechanics 8138 Nathan sharply scrutinizes Steve's uncapped convertible note terms, pressing on what happens if no conversion event occurs before the deadline. Steve admits there is no agreed valuation cap and that they would have to negotiate later.
Pioneer Pre-Payment Strategy and First Customer Acquisition 5313 Steve explains how COVID interrupted fundraising, leading to their pioneer pre-payment plan. Nathan keeps the conversation grounded by asking for exact contract figures.
Scaling Beyond Beta and Shifting into Active Sales 6215 Nathan challenges Steve on taking five years to build the MVP while consulting and asks how he balances personal financial obligations with going all-in. Steve openly explains his life stage, divorce, and treating Manageable as his retirement vehicle.
Famous Five Rapid-Fire Questions 4001 A standard, friendly Famous Five rapid-fire closing without confrontation or disagreement.

Statements from this episode (9)

Disclosure
Manageable currently has exactly three paying customers and one free account
“So we have three accounts now, one free and three paying accounts. So we have a little bit of revenue.”
Steve Petersheim Oct 7, 2023 ▶ 3:57
Disclosure
Petersheim: Manageable charges $8 per employee per month
“So we are, our rate right now is essentially eight dollars per employee per month. So a 50 person company, Is going to be paying, you know, about 400 a month.”
Steve Petersheim Oct 7, 2023 ▶ 4:10
Disclosure
Petersheim: Manageable's three paying customers have 50, 20, and 4 seats
“So the first company is 50, then we also have one that's 20, and then a very small one that's four, so.”
Steve Petersheim Oct 7, 2023 ▶ 4:28
Disclosure
Manageable's $37,500 initial seed money came from Petersheim's former employer
“37,037 1500 total... That was in 2019. So that was when I launched. Essentially, that was the initial seed money, which came from my former employer.”
Steve Petersheim Oct 7, 2023 ▶ 6:06
Disclosure
Manageable's uncapped note has mandatory conversion at $300k raised
“We don't have a cap. We just have mandatory conversion which is if we, when we get to 300,000, then we have a mandatory conversion. Either 300,000 or December 31st 25 is our minimum... If I, if we raise 300,000 dollars, then that man, then that creates a conve…”
Steve Petersheim Oct 7, 2023 ▶ 6:37
Disclosure
Petersheim: Manageable is run by non-technical founders contracting out all development
“Neither one of us is engineers. So we're non-tech founders, right? So we had to, we have to contract out all the development.”
Steve Petersheim Oct 7, 2023 ▶ 9:08
Disclosure
Manageable funded early development by selling annual subscriptions for unbuilt software
“We came up with an idea, we called it a pioneer plan. And so we hit our networks, our, you know, personal networks, and we offered everybody a deal. We said, look, if you are willing to pay for a year in advance, and we didn't even have the software built at t…”
Steve Petersheim Oct 7, 2023 ▶ 9:17
Assertion Not checkable as stated
Manageable's first customer paid around $5,000 upfront
“So it would have been I mean, I don't have the number right in front of me, but it was somewhere in the neighborhood of 5000 dollars.”
Steve Petersheim Oct 7, 2023 ▶ 10:20
Disclosure
Petersheim calls Manageable his final entrepreneurial venture and retirement plan
“This is my last go round. This one has to work, and this one is going to be my retirement plan so that I can help my kids.”
Steve Petersheim Oct 7, 2023 ▶ 12:25
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