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Nov 25, 2022 · 19m · top-founders

Bootstrapper hits $5m ARR using $2m in debt, keeps all his equity

Steve Benson · 13m spoken Nathan Latka · 4m 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 episode of Conversations with Nathan Latka, Badger Mapping founder Steve Benson explains how he bootstrapped his field sales routing platform to $5 million ARR, overcame pandemic disruptions, and used non-dilutive debt financing to maintain majority equity ownership.

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 26% of the talking time here. How this is scored →

Nathan as informed peer 4.2 Guest teaching 2.7 Guest disagreement 1.2 Nathan pushing back 1.8
05100:0010:000:38–2:53 · Nathan as informed peer 5/10 Episode Preview: Badger Mapping's $5M ARR Growth Story Nathan challenges Steve on how Badger Mapping survived COVID when door-to-door sales halted. Steve explains that certain states stayed open and essential verticals like medical devices never closed.2:53–7:23 · Nathan as informed peer 6/10 Analyzing Target Verticals and Main Street End Nodes Nathan quickly runs the revenue math on seat volume and pricing while drilling down into customer logo concentrations. Steve elaborates on the Main Street vertical strategy and enterprise expansion.7:23–10:40 · Nathan as informed peer 5/10 Bootstrapping Growth Trajectory and the Limitations of Venture Capital Nathan presses on equity numbers and VC vs. bootstrap trade-offs. Steve corrects Nathan's assumptions regarding the employee option pool and co-founder equity splits.10:41–15:30 · Nathan as informed peer 7/10 Team Structure and Leveraging Global Contractor Talent Nathan and Steve discuss contractor utilization and non-dilutive debt financing. Steve breaks down why short-term one-year debt facilities are dangerous for SaaS founders heading into a recession.15:31–19:28 · Nathan as informed peer 2/10 The Famous Five: Leadership, Personal Life, and Early Career Advice Nathan leads Steve through the Famous Five questions, including a lighthearted discussion of their shared quarantine house experience and career advice.19:29–19:56 · Nathan as informed peer 0/10 Episode Conclusion and Badger Mapping Summary Nathan concludes the episode with a summary of Badger Mapping's revenue growth, metrics, and debt-fueled bootstrap trajectory.0:38–2:53 · Guest teaching 4/10 Episode Preview: Badger Mapping's $5M ARR Growth Story Nathan challenges Steve on how Badger Mapping survived COVID when door-to-door sales halted. Steve explains that certain states stayed open and essential verticals like medical devices never closed.2:53–7:23 · Guest teaching 3/10 Analyzing Target Verticals and Main Street End Nodes Nathan quickly runs the revenue math on seat volume and pricing while drilling down into customer logo concentrations. Steve elaborates on the Main Street vertical strategy and enterprise expansion.7:23–10:40 · Guest teaching 4/10 Bootstrapping Growth Trajectory and the Limitations of Venture Capital Nathan presses on equity numbers and VC vs. bootstrap trade-offs. Steve corrects Nathan's assumptions regarding the employee option pool and co-founder equity splits.10:41–15:30 · Guest teaching 4/10 Team Structure and Leveraging Global Contractor Talent Nathan and Steve discuss contractor utilization and non-dilutive debt financing. Steve breaks down why short-term one-year debt facilities are dangerous for SaaS founders heading into a recession.15:31–19:28 · Guest teaching 1/10 The Famous Five: Leadership, Personal Life, and Early Career Advice Nathan leads Steve through the Famous Five questions, including a lighthearted discussion of their shared quarantine house experience and career advice.19:29–19:56 · Guest teaching 0/10 Episode Conclusion and Badger Mapping Summary Nathan concludes the episode with a summary of Badger Mapping's revenue growth, metrics, and debt-fueled bootstrap trajectory.0:38–2:53 · Guest disagreement 2/10 Episode Preview: Badger Mapping's $5M ARR Growth Story Nathan challenges Steve on how Badger Mapping survived COVID when door-to-door sales halted. Steve explains that certain states stayed open and essential verticals like medical devices never closed.2:53–7:23 · Guest disagreement 1/10 Analyzing Target Verticals and Main Street End Nodes Nathan quickly runs the revenue math on seat volume and pricing while drilling down into customer logo concentrations. Steve elaborates on the Main Street vertical strategy and enterprise expansion.7:23–10:40 · Guest disagreement 2/10 Bootstrapping Growth Trajectory and the Limitations of Venture Capital Nathan presses on equity numbers and VC vs. bootstrap trade-offs. Steve corrects Nathan's assumptions regarding the employee option pool and co-founder equity splits.10:41–15:30 · Guest disagreement 1/10 Team Structure and Leveraging Global Contractor Talent Nathan and Steve discuss contractor utilization and non-dilutive debt financing. Steve breaks down why short-term one-year debt facilities are dangerous for SaaS founders heading into a recession.15:31–19:28 · Guest disagreement 1/10 The Famous Five: Leadership, Personal Life, and Early Career Advice Nathan leads Steve through the Famous Five questions, including a lighthearted discussion of their shared quarantine house experience and career advice.19:29–19:56 · Guest disagreement 0/10 Episode Conclusion and Badger Mapping Summary Nathan concludes the episode with a summary of Badger Mapping's revenue growth, metrics, and debt-fueled bootstrap trajectory.0:38–2:53 · Nathan pushing back 3/10 Episode Preview: Badger Mapping's $5M ARR Growth Story Nathan challenges Steve on how Badger Mapping survived COVID when door-to-door sales halted. Steve explains that certain states stayed open and essential verticals like medical devices never closed.2:53–7:23 · Nathan pushing back 2/10 Analyzing Target Verticals and Main Street End Nodes Nathan quickly runs the revenue math on seat volume and pricing while drilling down into customer logo concentrations. Steve elaborates on the Main Street vertical strategy and enterprise expansion.7:23–10:40 · Nathan pushing back 3/10 Bootstrapping Growth Trajectory and the Limitations of Venture Capital Nathan presses on equity numbers and VC vs. bootstrap trade-offs. Steve corrects Nathan's assumptions regarding the employee option pool and co-founder equity splits.10:41–15:30 · Nathan pushing back 2/10 Team Structure and Leveraging Global Contractor Talent Nathan and Steve discuss contractor utilization and non-dilutive debt financing. Steve breaks down why short-term one-year debt facilities are dangerous for SaaS founders heading into a recession.15:31–19:28 · Nathan pushing back 1/10 The Famous Five: Leadership, Personal Life, and Early Career Advice Nathan leads Steve through the Famous Five questions, including a lighthearted discussion of their shared quarantine house experience and career advice.19:29–19:56 · Nathan pushing back 0/10 Episode Conclusion and Badger Mapping Summary Nathan concludes the episode with a summary of Badger Mapping's revenue growth, metrics, and debt-fueled bootstrap trajectory.

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

0:00 · Nathan 54.2% · guest 45.8%0:00 · Nathan 54.2% · guest 45.8%3:00 · Nathan 14.8% · guest 85.2%3:00 · Nathan 14.8% · guest 85.2%6:00 · Nathan 16.1% · guest 83.9%6:00 · Nathan 16.1% · guest 83.9%9:00 · Nathan 17.8% · guest 82.2%9:00 · Nathan 17.8% · guest 82.2%12:00 · Nathan 20.3% · guest 79.7%12:00 · Nathan 20.3% · guest 79.7%15:00 · Nathan 31.1% · guest 68.9%15:00 · Nathan 31.1% · guest 68.9%18:00 · Nathan 30% · guest 70%18:00 · Nathan 30% · guest 70%
Sharpest disagreement ▶ 1:58 Refuting the premise that field sales halted during COVID

Steve firmly refutes Nathan's assumption that nobody was driving door-to-door, highlighting open state markets and hospitals that stayed accessible.

 Hardest push from Nathan ▶ 9:48 Pressing on founder ownership percentages

Nathan directly challenges Steve on whether he still holds over 75-80% equity, requiring Steve to clarify his true cap table distribution.

 Biggest teaching moment ▶ 13:36 Educating on the refinancing trap of 1-year debt

Steve explains the hidden risk in short-term SaaS venture debt, cautioning that relying on paying back debt with new debt collapses during market downturns.

 Nathan holds their own ▶ 5:23 Instant mental math on ARPU, seats, and run rate

Nathan instantly converts blended pricing and total revenue figures into exact seat counts and average logo sizes before Steve computes it.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Episode Preview: Badger Mapping's $5M ARR Growth Story 5423 Nathan challenges Steve on how Badger Mapping survived COVID when door-to-door sales halted. Steve explains that certain states stayed open and essential verticals like medical devices never closed.
Analyzing Target Verticals and Main Street End Nodes 6312 Nathan quickly runs the revenue math on seat volume and pricing while drilling down into customer logo concentrations. Steve elaborates on the Main Street vertical strategy and enterprise expansion.
Bootstrapping Growth Trajectory and the Limitations of Venture Capital 5423 Nathan presses on equity numbers and VC vs. bootstrap trade-offs. Steve corrects Nathan's assumptions regarding the employee option pool and co-founder equity splits.
Team Structure and Leveraging Global Contractor Talent 7412 Nathan and Steve discuss contractor utilization and non-dilutive debt financing. Steve breaks down why short-term one-year debt facilities are dangerous for SaaS founders heading into a recession.
The Famous Five: Leadership, Personal Life, and Early Career Advice 2111 Nathan leads Steve through the Famous Five questions, including a lighthearted discussion of their shared quarantine house experience and career advice.
Episode Conclusion and Badger Mapping Summary 0000 Nathan concludes the episode with a summary of Badger Mapping's revenue growth, metrics, and debt-fueled bootstrap trajectory.

Statements from this episode (10)

Assertion Not checkable as stated
Badger Mapping lost 40% of revenue in 2020 but finished down 10%
“We probably lost 40% of our customers during like revenue wise during during 2020. That being said, we were able to sell to a bunch of new customers during that period. So we only ended up about down about 10%.”
Steve Benson Nov 25, 2022 ▶ 1:40
Assertion Not checkable as stated
Steve Benson says Badger Mapping is approaching $5 million in ARR
“You could divide our total revenue, which is right around five million. We're about to cross five either this month or next month, I think.”
Steve Benson Nov 25, 2022 ▶ 5:03
Disclosure
Badger Mapping is preparing to close its first 1,000-seat enterprise deal
“As of right now, but a little bird on the sales team tells me that we're about to do a thousand seat one, so for the first time.”
Steve Benson Nov 25, 2022 ▶ 6:05
Disclosure
Badger Mapping grew from $4.2M to nearly $5M ARR in 2022
“A year ago, I, we started this year at three 50 in MRR. So I'd have to run that math, but what is that? 4.2 ish.”
Steve Benson Nov 25, 2022 ▶ 7:29
Opinion
Steve Benson argues venture capital is wrong for over 90% of startups
“For the vast majority of SaaS founders, they're not the right fit, right? They only want to invest in a very small slice of the world of SaaS, right? The super high growth, you know, huge companies you know, and there's the, that 90, I don't know, you might kn…”
Steve Benson Nov 25, 2022 ▶ 8:22
Disclosure
Badger Mapping sold only 10% to 12% to non-institutional angel investors
“We've only brought in from an investor perspective, we've, I get, we've sold about, I think, 12, 10, 12% of the company to investors. So, and no, there's no professional money in there.”
Steve Benson Nov 25, 2022 ▶ 9:26
Disclosure
Steve Benson retains over 50% ownership of Badger Mapping at $5M ARR
“So I own more than half of the business”
Steve Benson Nov 25, 2022 ▶ 10:11
Disclosure
Badger Mapping raised $6M in total debt to reach $5M ARR
“I think I've done, well, I think I've done about six million dollars in debt over the years on and off. You know, and moving it around right now. I have about 2.25 with you guys at founder path, as you know”
Steve Benson Nov 25, 2022 ▶ 12:56
Insight
Steve Benson warns founders that one-year SaaS debt deals are highly risky
“The reason they assume this is because a lot of the SAS debt providers are doing year long deals. That's really risky because you're basically You're saying you're going to pay their debt back with more debt, but you know, we're standing on the barrel of a rec…”
Steve Benson Nov 25, 2022 ▶ 13:38
Assertion Supported
Salesforce acquired Badger Mapping's primary competitor for roughly $250 million
“I've always got my eye on, on, on Mark Benioff. Cause he bought my biggest competitor for. Two hundred and fifty million bucks or so.”
Steve Benson Nov 25, 2022 ▶ 16:14
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