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Feb 2, 2022 · 16m · top-founders

VR Builder SaaS Hits $5m Revenue, Targeting $10m Series A Now

Kevin Cornish · 9m 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 interview, Moth & Flame founder and CEO Kevin Cornish discusses how his company doubled revenue to $5 million, shifted from bespoke VR development to a high-margin enterprise SaaS model, and prepared for an upcoming $10M–$12M Series A round.

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 34% of the talking time here. How this is scored →

Nathan as informed peer 5.4 Guest teaching 4.0 Guest disagreement 2.0 Nathan pushing back 4.6
05100:0010:001:55–5:25 · Nathan as informed peer 5/10 Pricing Architecture and the Ineffectiveness of Legacy E-Learning Latka tests a hypothetical pricing scenario about paying full seat costs for a single holiday event. Cornish clarifies enterprise behavior change dynamics, pointing out traditional e-learning's 20% effectiveness rate and detailing a tangible Accenture child welfare case study.5:25–8:52 · Nathan as informed peer 6/10 Unit Economics, Team Structure, and SaaS Revenue Acceleration Latka cuts Cornish off to force a clear average contract value rather than multiple pricing tiers. Cornish complies with a concise $78k ACV and explains their shift from custom engineering to scalable off-the-shelf VR software.8:55–12:30 · Nathan as informed peer 6/10 Sponsor Feature: Optimizing Corporate Spend with Ramp After an ad read, Latka calculates the implied seed valuation from dilution parameters and probes the strategic timing of their bridge note. Cornish explains how timing the round around marketplace proof points will optimize Series A terms.12:30–15:45 · Nathan as informed peer 7/10 Venture Multiples on Services vs. High-Margin SaaS Subscriptions Latka challenges why Cornish accepted a discount from venture investors on services revenue instead of defending its role in driving retention. Cornish acknowledges VC skepticism toward services and presents gross margin splits of 80% on software versus 50% on services.15:45–16:36 · Nathan as informed peer 3/10 The Famous Five: Rapid-Fire Questions with Kevin Cornish Standard Famous Five lightning round with rapid-fire questions and direct, concise answers.1:55–5:25 · Guest teaching 6/10 Pricing Architecture and the Ineffectiveness of Legacy E-Learning Latka tests a hypothetical pricing scenario about paying full seat costs for a single holiday event. Cornish clarifies enterprise behavior change dynamics, pointing out traditional e-learning's 20% effectiveness rate and detailing a tangible Accenture child welfare case study.5:25–8:52 · Guest teaching 5/10 Unit Economics, Team Structure, and SaaS Revenue Acceleration Latka cuts Cornish off to force a clear average contract value rather than multiple pricing tiers. Cornish complies with a concise $78k ACV and explains their shift from custom engineering to scalable off-the-shelf VR software.8:55–12:30 · Guest teaching 4/10 Sponsor Feature: Optimizing Corporate Spend with Ramp After an ad read, Latka calculates the implied seed valuation from dilution parameters and probes the strategic timing of their bridge note. Cornish explains how timing the round around marketplace proof points will optimize Series A terms.12:30–15:45 · Guest teaching 4/10 Venture Multiples on Services vs. High-Margin SaaS Subscriptions Latka challenges why Cornish accepted a discount from venture investors on services revenue instead of defending its role in driving retention. Cornish acknowledges VC skepticism toward services and presents gross margin splits of 80% on software versus 50% on services.15:45–16:36 · Guest teaching 1/10 The Famous Five: Rapid-Fire Questions with Kevin Cornish Standard Famous Five lightning round with rapid-fire questions and direct, concise answers.1:55–5:25 · Guest disagreement 3/10 Pricing Architecture and the Ineffectiveness of Legacy E-Learning Latka tests a hypothetical pricing scenario about paying full seat costs for a single holiday event. Cornish clarifies enterprise behavior change dynamics, pointing out traditional e-learning's 20% effectiveness rate and detailing a tangible Accenture child welfare case study.5:25–8:52 · Guest disagreement 2/10 Unit Economics, Team Structure, and SaaS Revenue Acceleration Latka cuts Cornish off to force a clear average contract value rather than multiple pricing tiers. Cornish complies with a concise $78k ACV and explains their shift from custom engineering to scalable off-the-shelf VR software.8:55–12:30 · Guest disagreement 2/10 Sponsor Feature: Optimizing Corporate Spend with Ramp After an ad read, Latka calculates the implied seed valuation from dilution parameters and probes the strategic timing of their bridge note. Cornish explains how timing the round around marketplace proof points will optimize Series A terms.12:30–15:45 · Guest disagreement 3/10 Venture Multiples on Services vs. High-Margin SaaS Subscriptions Latka challenges why Cornish accepted a discount from venture investors on services revenue instead of defending its role in driving retention. Cornish acknowledges VC skepticism toward services and presents gross margin splits of 80% on software versus 50% on services.15:45–16:36 · Guest disagreement 0/10 The Famous Five: Rapid-Fire Questions with Kevin Cornish Standard Famous Five lightning round with rapid-fire questions and direct, concise answers.1:55–5:25 · Nathan pushing back 4/10 Pricing Architecture and the Ineffectiveness of Legacy E-Learning Latka tests a hypothetical pricing scenario about paying full seat costs for a single holiday event. Cornish clarifies enterprise behavior change dynamics, pointing out traditional e-learning's 20% effectiveness rate and detailing a tangible Accenture child welfare case study.5:25–8:52 · Nathan pushing back 6/10 Unit Economics, Team Structure, and SaaS Revenue Acceleration Latka cuts Cornish off to force a clear average contract value rather than multiple pricing tiers. Cornish complies with a concise $78k ACV and explains their shift from custom engineering to scalable off-the-shelf VR software.8:55–12:30 · Nathan pushing back 5/10 Sponsor Feature: Optimizing Corporate Spend with Ramp After an ad read, Latka calculates the implied seed valuation from dilution parameters and probes the strategic timing of their bridge note. Cornish explains how timing the round around marketplace proof points will optimize Series A terms.12:30–15:45 · Nathan pushing back 7/10 Venture Multiples on Services vs. High-Margin SaaS Subscriptions Latka challenges why Cornish accepted a discount from venture investors on services revenue instead of defending its role in driving retention. Cornish acknowledges VC skepticism toward services and presents gross margin splits of 80% on software versus 50% on services.15:45–16:36 · Nathan pushing back 1/10 The Famous Five: Rapid-Fire Questions with Kevin Cornish Standard Famous Five lightning round with rapid-fire questions and direct, concise answers.

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

0:00 · Nathan 44.8% · guest 55.2%0:00 · Nathan 44.8% · guest 55.2%3:00 · Nathan 24.4% · guest 75.6%3:00 · Nathan 24.4% · guest 75.6%6:00 · Nathan 18.6% · guest 81.4%6:00 · Nathan 18.6% · guest 81.4%9:00 · Nathan 62.9% · guest 37.1%9:00 · Nathan 62.9% · guest 37.1%12:00 · Nathan 21.1% · guest 78.9%12:00 · Nathan 21.1% · guest 78.9%15:00 · Nathan 29.6% · guest 70.4%15:00 · Nathan 29.6% · guest 70.4%
Sharpest disagreement ▶ 2:51 Cornish dismisses one-off event framing

Cornish counters Latka's hypothetical Christmas event premise, explaining that enterprise clients buy continuous behavioral transformation rather than one-time novelty experiences.

 Hardest push from Nathan ▶ 13:08 Latka confronts founder on accepting VC terms

Latka blunt asks Cornish whether he simply rolled over and conceded to VCs discounting services revenue instead of negotiating harder.

 Biggest teaching moment ▶ 2:51 Cornish on legacy LMS failure rates

Cornish educates Latka on enterprise learning dynamics, citing a 20% effectiveness rate for legacy LMS e-learning and showing how VR cut child welfare worker churn by 30%.

 Nathan holds their own ▶ 12:30 Latka dissects valuation multiples on mixed revenue

Latka demonstrates deep SaaS domain knowledge by analyzing Cornish's revenue composition and pointing out that a 5-6x revenue multiple fails to price in the strategic value of service-led retention.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Pricing Architecture and the Ineffectiveness of Legacy E-Learning 5634 Latka tests a hypothetical pricing scenario about paying full seat costs for a single holiday event. Cornish clarifies enterprise behavior change dynamics, pointing out traditional e-learning's 20% effectiveness rate and detailing a tangible Accenture child welfare case study.
Unit Economics, Team Structure, and SaaS Revenue Acceleration 6526 Latka cuts Cornish off to force a clear average contract value rather than multiple pricing tiers. Cornish complies with a concise $78k ACV and explains their shift from custom engineering to scalable off-the-shelf VR software.
Sponsor Feature: Optimizing Corporate Spend with Ramp 6425 After an ad read, Latka calculates the implied seed valuation from dilution parameters and probes the strategic timing of their bridge note. Cornish explains how timing the round around marketplace proof points will optimize Series A terms.
Venture Multiples on Services vs. High-Margin SaaS Subscriptions 7437 Latka challenges why Cornish accepted a discount from venture investors on services revenue instead of defending its role in driving retention. Cornish acknowledges VC skepticism toward services and presents gross margin splits of 80% on software versus 50% on services.
The Famous Five: Rapid-Fire Questions with Kevin Cornish 3101 Standard Famous Five lightning round with rapid-fire questions and direct, concise answers.

Statements from this episode (15)

Disclosure
Cornish: Moth & Flame Platform Combines Content, Authoring, and Analytics
“So our product, it's an immersive learning platform. So what that means is we got an off the shelf content library. We got authoring tools and then an analytics dashboard. So our customers are everyone from CHROs, chief compliance officers, chief diversity off…”
Kevin Cornish Feb 2, 2022 ▶ 1:31
Disclosure
Moth & Flame charges $4,500 to $8,500 monthly for enterprise VR
“Pricing is based on TAM. So we got kind of two categories. One is on a per experience base basis. So these are for things where the TAM is smaller, smaller user base. So that's at a 4565 hundred, or 8500 a month, depending on kind of the different, different f…”
Kevin Cornish Feb 2, 2022 ▶ 1:59
Assertion Not checkable as stated
Cornish: VR hiring simulations cut child welfare worker churn by 30%
“In the first year of doing that, they cut the churn by 30%.”
Kevin Cornish Feb 2, 2022 ▶ 5:20
Assertion Not checkable as stated
Moth & Flame's average annual customer contract value is $78,000
“The 78,000. That's 6500 a month times 12.”
Kevin Cornish Feb 2, 2022 ▶ 5:44
Assertion Not checkable as stated
Cornish: Moth & Flame did $2.5M revenue prior year, $200K recurring
“Last year, we did two and a half in revenue, and like, 200 of that was recurring.”
Kevin Cornish Feb 2, 2022 ▶ 6:48
Assertion Not checkable as stated
Cornish: Moth & Flame hit $5M revenue this year, $2M recurring
“This year, we did five in revenue, two million was recurring.”
Kevin Cornish Feb 2, 2022 ▶ 6:59
Prediction Not checkable as stated
Cornish: Moth & Flame recurring revenue will reach ~70% next year
“And next year we see that number getting up probably towards 70% of it being recurring.”
Kevin Cornish Feb 2, 2022 ▶ 7:04
Disclosure
Cornish: Moth & Flame has insider bridge rolling into spring Series A
“And then right now we are, we have a bridge that's open mostly for insiders that's going to roll into a series A that we'll do in the spring.”
Kevin Cornish Feb 2, 2022 ▶ 7:25
Assertion Not publicly verifiable
Moth & Flame expanded Air Force VR licenses from 10k to 25k
“So we had a program around suicide prevention in the air force. So this was one where We created the content and then sold user licenses. So basically like you're selling tickets to a movie sold 10,000 for the first year. And then they expanded that for the se…”
Kevin Cornish Feb 2, 2022 ▶ 7:55
Insight
Cornish: VR adoption is limited by content, solved by off-the-shelf pricing
“The challenge with virtual reality is there's not a lot of content out there. So off the shelf content means they only need to pay for their usage, which means they don't need to have huge upfront startup costs.”
Kevin Cornish Feb 2, 2022 ▶ 8:38
Disclosure
Cornish: Moth & Flame's seed valuation was $20M to $30M
“It's a, it's some, it's something in the range.”
Kevin Cornish Feb 2, 2022 ▶ 10:58
Assertion Not checkable as stated
Moth & Flame has five marketplace customers and 15 to 20 total
“So on that one, we're five and total customers today. We're in the 15 to 20 range.”
Kevin Cornish Feb 2, 2022 ▶ 11:38
Assertion Not checkable as stated
Cornish: Moth & Flame subscription gross margin reaches 75% to 80%
“The other thing is our gross margin on it on our subscription revenue we're up in the like, 75 towards 80%.”
Kevin Cornish Feb 2, 2022 ▶ 13:37
Disclosure
Moth & Flame is targeting a $10M–$12M Series A round
“We're talking about 10 to 12.”
Kevin Cornish Feb 2, 2022 ▶ 14:01
Assertion Not checkable as stated
Moth & Flame hit $280,000 in monthly SaaS revenue
“Yeah, we were at two 80 last month.”
Kevin Cornish Feb 2, 2022 ▶ 15:41
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