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Oct 3, 2021 · 16m · top-founders

Brazilian Cloud Security SaaS Hits $750k ARR With $350k Raised, Opening $5m Series A Soon

Enrique Vaz · 9m spoken Nathan Latka · 5m 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, CleanCloud co-founder and CEO Enrique Vaz details how his Brazilian cloud security startup scaled to over $650k in ARR on just $350k in funding. Vaz outlines CleanCloud's product suite, cap table restructuring, sales economics, and upcoming $5 million Series A fundraising 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 35.2% of the talking time here. How this is scored →

Nathan as informed peer 5.7 Guest teaching 2.3 Guest disagreement 1.2 Nathan pushing back 3.2
05100:0010:000:47–3:03 · Nathan as informed peer 5/10 CleanCloud Overview, Target Market, and Pricing Architecture Latka explores CleanCloud's enterprise customer profile and pricing architecture. He drills down on pricing mechanics, specifically clarifying how cloud resources and compliance check frequency drive contract value.3:03–7:15 · Nathan as informed peer 6/10 CleanCloud Founding Story, Product Pivot, and Seed Capital Latka dives into the company's early pivot and the buyout of an early co-founder. Latka articulates standard startup buyout dynamics and computes the implied valuation discount while Vaz clarifies currency conversion nuances.7:15–9:34 · Nathan as informed peer 6/10 Capital Efficiency, MRR Growth, and Dual Product Offerings Latka tracks CleanCloud's capital efficiency and quickly converts reported ARR numbers into monthly run rate and year-over-year expansion. Vaz explains the revenue split between their core security posture product and legacy FinOps tool.9:35–12:46 · Nathan as informed peer 7/10 Series A Fundraising Strategy and Cap Table Distribution Latka questions Vaz on upcoming Series A targets and computes the implied pre-money valuation and revenue multiples. He also audits the cap table arithmetic across founders, ESOP pool, and early investors.12:48–15:21 · Nathan as informed peer 7/10 Investor Profiles, Team Composition, and Sales Quota Economics Latka challenges Vaz's sales quota figures as uneconomic under standard US benchmarks. Vaz educates Latka on local Brazilian compensation structures, prompting Latka to model the full on-target earnings.15:23–16:14 · Nathan as informed peer 3/10 The Famous Five Rapid-Fire Questions with Enrique Vaz Latka conducts the standard rapid-fire Famous Five round. Vaz provides concise, direct responses before Latka closes out the episode with a summary.0:47–3:03 · Guest teaching 2/10 CleanCloud Overview, Target Market, and Pricing Architecture Latka explores CleanCloud's enterprise customer profile and pricing architecture. He drills down on pricing mechanics, specifically clarifying how cloud resources and compliance check frequency drive contract value.3:03–7:15 · Guest teaching 3/10 CleanCloud Founding Story, Product Pivot, and Seed Capital Latka dives into the company's early pivot and the buyout of an early co-founder. Latka articulates standard startup buyout dynamics and computes the implied valuation discount while Vaz clarifies currency conversion nuances.7:15–9:34 · Guest teaching 2/10 Capital Efficiency, MRR Growth, and Dual Product Offerings Latka tracks CleanCloud's capital efficiency and quickly converts reported ARR numbers into monthly run rate and year-over-year expansion. Vaz explains the revenue split between their core security posture product and legacy FinOps tool.9:35–12:46 · Guest teaching 2/10 Series A Fundraising Strategy and Cap Table Distribution Latka questions Vaz on upcoming Series A targets and computes the implied pre-money valuation and revenue multiples. He also audits the cap table arithmetic across founders, ESOP pool, and early investors.12:48–15:21 · Guest teaching 5/10 Investor Profiles, Team Composition, and Sales Quota Economics Latka challenges Vaz's sales quota figures as uneconomic under standard US benchmarks. Vaz educates Latka on local Brazilian compensation structures, prompting Latka to model the full on-target earnings.15:23–16:14 · Guest teaching 0/10 The Famous Five Rapid-Fire Questions with Enrique Vaz Latka conducts the standard rapid-fire Famous Five round. Vaz provides concise, direct responses before Latka closes out the episode with a summary.0:47–3:03 · Guest disagreement 1/10 CleanCloud Overview, Target Market, and Pricing Architecture Latka explores CleanCloud's enterprise customer profile and pricing architecture. He drills down on pricing mechanics, specifically clarifying how cloud resources and compliance check frequency drive contract value.3:03–7:15 · Guest disagreement 1/10 CleanCloud Founding Story, Product Pivot, and Seed Capital Latka dives into the company's early pivot and the buyout of an early co-founder. Latka articulates standard startup buyout dynamics and computes the implied valuation discount while Vaz clarifies currency conversion nuances.7:15–9:34 · Guest disagreement 1/10 Capital Efficiency, MRR Growth, and Dual Product Offerings Latka tracks CleanCloud's capital efficiency and quickly converts reported ARR numbers into monthly run rate and year-over-year expansion. Vaz explains the revenue split between their core security posture product and legacy FinOps tool.9:35–12:46 · Guest disagreement 1/10 Series A Fundraising Strategy and Cap Table Distribution Latka questions Vaz on upcoming Series A targets and computes the implied pre-money valuation and revenue multiples. He also audits the cap table arithmetic across founders, ESOP pool, and early investors.12:48–15:21 · Guest disagreement 3/10 Investor Profiles, Team Composition, and Sales Quota Economics Latka challenges Vaz's sales quota figures as uneconomic under standard US benchmarks. Vaz educates Latka on local Brazilian compensation structures, prompting Latka to model the full on-target earnings.15:23–16:14 · Guest disagreement 0/10 The Famous Five Rapid-Fire Questions with Enrique Vaz Latka conducts the standard rapid-fire Famous Five round. Vaz provides concise, direct responses before Latka closes out the episode with a summary.0:47–3:03 · Nathan pushing back 2/10 CleanCloud Overview, Target Market, and Pricing Architecture Latka explores CleanCloud's enterprise customer profile and pricing architecture. He drills down on pricing mechanics, specifically clarifying how cloud resources and compliance check frequency drive contract value.3:03–7:15 · Nathan pushing back 4/10 CleanCloud Founding Story, Product Pivot, and Seed Capital Latka dives into the company's early pivot and the buyout of an early co-founder. Latka articulates standard startup buyout dynamics and computes the implied valuation discount while Vaz clarifies currency conversion nuances.7:15–9:34 · Nathan pushing back 3/10 Capital Efficiency, MRR Growth, and Dual Product Offerings Latka tracks CleanCloud's capital efficiency and quickly converts reported ARR numbers into monthly run rate and year-over-year expansion. Vaz explains the revenue split between their core security posture product and legacy FinOps tool.9:35–12:46 · Nathan pushing back 4/10 Series A Fundraising Strategy and Cap Table Distribution Latka questions Vaz on upcoming Series A targets and computes the implied pre-money valuation and revenue multiples. He also audits the cap table arithmetic across founders, ESOP pool, and early investors.12:48–15:21 · Nathan pushing back 6/10 Investor Profiles, Team Composition, and Sales Quota Economics Latka challenges Vaz's sales quota figures as uneconomic under standard US benchmarks. Vaz educates Latka on local Brazilian compensation structures, prompting Latka to model the full on-target earnings.15:23–16:14 · Nathan pushing back 0/10 The Famous Five Rapid-Fire Questions with Enrique Vaz Latka conducts the standard rapid-fire Famous Five round. Vaz provides concise, direct responses before Latka closes out the episode with a summary.

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

0:00 · Nathan 45.7% · guest 54.3%0:00 · Nathan 45.7% · guest 54.3%3:00 · Nathan 18.1% · guest 81.9%3:00 · Nathan 18.1% · guest 81.9%6:00 · Nathan 36% · guest 64%6:00 · Nathan 36% · guest 64%9:00 · Nathan 25.8% · guest 74.2%9:00 · Nathan 25.8% · guest 74.2%12:00 · Nathan 33.1% · guest 66.9%12:00 · Nathan 33.1% · guest 66.9%15:00 · Nathan 67.6% · guest 32.4%15:00 · Nathan 67.6% · guest 32.4%
Sharpest disagreement ▶ 14:17 Vaz rejects quota economics critique

Vaz directly counters Latka's assertion that a $60k quota fails to cover base salary by pointing out local base salaries in Brazil are only $1,000 per month.

 Hardest push from Nathan ▶ 14:09 Latka challenges low sales quota

Latka openly challenges Vaz's numbers, arguing that closing only $60k in ARR per year would barely cover a sales rep's base compensation.

 Biggest teaching moment ▶ 14:17 Vaz educates host on Brazilian sales comp

Vaz explains the Brazilian SaaS labor market dynamics and low baseline costs, showing how a $60k ARR quota yields healthy unit economics.

 Nathan holds their own ▶ 11:25 Latka models Series A valuation multiples

Latka instantly translates a $5M raise at 25% dilution into a $15M pre-money valuation and a 15-25x ARR multiple.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
CleanCloud Overview, Target Market, and Pricing Architecture 5212 Latka explores CleanCloud's enterprise customer profile and pricing architecture. He drills down on pricing mechanics, specifically clarifying how cloud resources and compliance check frequency drive contract value.
CleanCloud Founding Story, Product Pivot, and Seed Capital 6314 Latka dives into the company's early pivot and the buyout of an early co-founder. Latka articulates standard startup buyout dynamics and computes the implied valuation discount while Vaz clarifies currency conversion nuances.
Capital Efficiency, MRR Growth, and Dual Product Offerings 6213 Latka tracks CleanCloud's capital efficiency and quickly converts reported ARR numbers into monthly run rate and year-over-year expansion. Vaz explains the revenue split between their core security posture product and legacy FinOps tool.
Series A Fundraising Strategy and Cap Table Distribution 7214 Latka questions Vaz on upcoming Series A targets and computes the implied pre-money valuation and revenue multiples. He also audits the cap table arithmetic across founders, ESOP pool, and early investors.
Investor Profiles, Team Composition, and Sales Quota Economics 7536 Latka challenges Vaz's sales quota figures as uneconomic under standard US benchmarks. Vaz educates Latka on local Brazilian compensation structures, prompting Latka to model the full on-target earnings.
The Famous Five Rapid-Fire Questions with Enrique Vaz 3000 Latka conducts the standard rapid-fire Famous Five round. Vaz provides concise, direct responses before Latka closes out the episode with a summary.

Statements from this episode (15)

Assertion Not checkable as stated
Vaz: CleanCloud customers pay an average of $2,000 per month
“On average, they pay around 2000 dollars a month. We usually sell on annual contracts.”
Enrique Vaz Oct 3, 2021 ▶ 1:59
Disclosure
Vaz: CleanCloud raised a $250k seed round in 2019
“You lost a small seed, like 250 K US dollars.”
Enrique Vaz Oct 3, 2021 ▶ 4:13
Disclosure
Vaz: CleanCloud's 2019 seed valuation cap was around $2 million
“On that round we did there was like two valuations because at that time we had one co-founder that left the company. So we had this primary and secondary valuation and the average, we don't disclose this number but it was around two million dollars.”
Enrique Vaz Oct 3, 2021 ▶ 4:26
Disclosure
CleanCloud bought out 75% of departing co-founder's equity
“What we did is that we buy out 75% of his equity. So he kept a little bit because he was in the early years of the company and we found this was fair.”
Enrique Vaz Oct 3, 2021 ▶ 5:42
Disclosure
CleanCloud bought co-founder's stake at a 5x to 10x discount
“Something between five and 10 X discount.”
Enrique Vaz Oct 3, 2021 ▶ 6:30
Disclosure
CleanCloud has raised approximately $350,000 in total funding
“So, so in total, CleanCloud raised like 350,000 dollars, something like that.”
Enrique Vaz Oct 3, 2021 ▶ 7:33
Assertion Not checkable as stated
CleanCloud reaches $650,000 in annual recurring revenue
“606 150,000 dollars.”
Enrique Vaz Oct 3, 2021 ▶ 8:11
Assertion Not checkable as stated
CleanCloud serves approximately 40 customers across its two products
“For both products, we have like 40, 40 customers.”
Enrique Vaz Oct 3, 2021 ▶ 8:29
Assertion Not checkable as stated
CleanCloud generates 65% of revenue from CSPM and 35% from FinOps
“And we have like, 40%, 35% of our revenue is coming from this product, and the other two-thirds, 65% is coming from Team Cloud Score.”
Enrique Vaz Oct 3, 2021 ▶ 9:05
Disclosure
Vaz: CleanCloud aims to raise $4M to $5M for Series A
“We're looking to raise around four to five million dollars.”
Enrique Vaz Oct 3, 2021 ▶ 10:18
Disclosure
Vaz: CleanCloud targets 20% to 25% dilution in Series A
“Usually we look for, usually a series A round is around 25% equity, right? 20 to 25%. So let's look to be on that percentage.”
Enrique Vaz Oct 3, 2021 ▶ 10:53
Assertion Not checkable as stated
Vaz: CleanCloud cap table is 70% insiders and 30% investors
“So on our seed round, we created an SOP stock option tool. So we have 70% on, let's call it insiders, me, my co-founders, and some employees, and 30% on investors.”
Enrique Vaz Oct 3, 2021 ▶ 11:56
Disclosure
CleanCloud sets sales reps' annual ARR quota at $60,000
“Their quota is a hundred 30, 60,000 a year USD. 60,000 dollars in ARR is their quota.”
Enrique Vaz Oct 3, 2021 ▶ 13:54
Disclosure
CleanCloud pays Brazilian sales reps a $1,000 monthly base salary
“Their fixed compensation, like is like a thousand dollars a month.”
Enrique Vaz Oct 3, 2021 ▶ 14:18
Disclosure
CleanCloud pays sales commissions up to 5% based on seniority
“We pay up to five percent depending on the seniority of the sales rep.”
Enrique Vaz Oct 3, 2021 ▶ 15:01
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