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Oct 27, 2020 · 19m · top-founders

ClearView Is HootSuite for Lawyers, Hits $2.3m Revenue, Would Look at Exiting for $6m

Adrian Dayton · 10m spoken Nathan Latka · 6m 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 SaaS founder interview, Nathan Latka speaks with Clearview Social founder Adrian Dayton about scaling an employee advocacy platform to $2.3 million in ARR, maintaining EBITDA profitability, dominating the legal sector, and evaluating strategic exit options.

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 38.6% of the talking time here. How this is scored →

Nathan as informed peer 4.8 Guest teaching 1.5 Guest disagreement 1.0 Nathan pushing back 2.2
05100:0010:000:18–3:22 · Nathan as informed peer 4/10 Subscribe to the Nathan Latka Podcast Feed Nathan introduces the interview and reviews historical benchmarks from Adrian's 2018 appearance, such as customer count and ACV.3:22–6:20 · Nathan as informed peer 5/10 ARR Performance and Navigating COVID-19 Nathan digs into annual recurring revenue, gross versus net churn, and Adrian's contractual built-in price escalators during COVID.6:20–8:45 · Nathan as informed peer 4/10 Capitalization, Government Loans, and Team Composition Nathan reviews capital structure, government assistance (PPP and loan), and verifies EBITDA profitability alongside headcount.8:47–12:56 · Nathan as informed peer 6/10 HostGator Website Hosting Mid-Roll Advertisement Following the mid-roll ad, Nathan challenges Adrian on his sales quotas, pointing out that a 2x quota-to-OTE ratio lags behind typical SaaS benchmarks.12:56–17:00 · Nathan as informed peer 6/10 Exit Valuation, Buyer Types, and Market Niches Nathan tests Adrian's openness to a $6 million acquisition and maps out potential strategic buyers, while Adrian highlights legal market stickiness.17:00–19:14 · Nathan as informed peer 4/10 The Famous Five Questions with Adrian Dayton Nathan conducts the standard Famous Five rapid-fire questions and provides a comprehensive recap of Clearview Social's core business metrics.0:18–3:22 · Guest teaching 1/10 Subscribe to the Nathan Latka Podcast Feed Nathan introduces the interview and reviews historical benchmarks from Adrian's 2018 appearance, such as customer count and ACV.3:22–6:20 · Guest teaching 2/10 ARR Performance and Navigating COVID-19 Nathan digs into annual recurring revenue, gross versus net churn, and Adrian's contractual built-in price escalators during COVID.6:20–8:45 · Guest teaching 1/10 Capitalization, Government Loans, and Team Composition Nathan reviews capital structure, government assistance (PPP and loan), and verifies EBITDA profitability alongside headcount.8:47–12:56 · Guest teaching 2/10 HostGator Website Hosting Mid-Roll Advertisement Following the mid-roll ad, Nathan challenges Adrian on his sales quotas, pointing out that a 2x quota-to-OTE ratio lags behind typical SaaS benchmarks.12:56–17:00 · Guest teaching 3/10 Exit Valuation, Buyer Types, and Market Niches Nathan tests Adrian's openness to a $6 million acquisition and maps out potential strategic buyers, while Adrian highlights legal market stickiness.17:00–19:14 · Guest teaching 0/10 The Famous Five Questions with Adrian Dayton Nathan conducts the standard Famous Five rapid-fire questions and provides a comprehensive recap of Clearview Social's core business metrics.0:18–3:22 · Guest disagreement 1/10 Subscribe to the Nathan Latka Podcast Feed Nathan introduces the interview and reviews historical benchmarks from Adrian's 2018 appearance, such as customer count and ACV.3:22–6:20 · Guest disagreement 1/10 ARR Performance and Navigating COVID-19 Nathan digs into annual recurring revenue, gross versus net churn, and Adrian's contractual built-in price escalators during COVID.6:20–8:45 · Guest disagreement 1/10 Capitalization, Government Loans, and Team Composition Nathan reviews capital structure, government assistance (PPP and loan), and verifies EBITDA profitability alongside headcount.8:47–12:56 · Guest disagreement 2/10 HostGator Website Hosting Mid-Roll Advertisement Following the mid-roll ad, Nathan challenges Adrian on his sales quotas, pointing out that a 2x quota-to-OTE ratio lags behind typical SaaS benchmarks.12:56–17:00 · Guest disagreement 1/10 Exit Valuation, Buyer Types, and Market Niches Nathan tests Adrian's openness to a $6 million acquisition and maps out potential strategic buyers, while Adrian highlights legal market stickiness.17:00–19:14 · Guest disagreement 0/10 The Famous Five Questions with Adrian Dayton Nathan conducts the standard Famous Five rapid-fire questions and provides a comprehensive recap of Clearview Social's core business metrics.0:18–3:22 · Nathan pushing back 1/10 Subscribe to the Nathan Latka Podcast Feed Nathan introduces the interview and reviews historical benchmarks from Adrian's 2018 appearance, such as customer count and ACV.3:22–6:20 · Nathan pushing back 3/10 ARR Performance and Navigating COVID-19 Nathan digs into annual recurring revenue, gross versus net churn, and Adrian's contractual built-in price escalators during COVID.6:20–8:45 · Nathan pushing back 2/10 Capitalization, Government Loans, and Team Composition Nathan reviews capital structure, government assistance (PPP and loan), and verifies EBITDA profitability alongside headcount.8:47–12:56 · Nathan pushing back 5/10 HostGator Website Hosting Mid-Roll Advertisement Following the mid-roll ad, Nathan challenges Adrian on his sales quotas, pointing out that a 2x quota-to-OTE ratio lags behind typical SaaS benchmarks.12:56–17:00 · Nathan pushing back 2/10 Exit Valuation, Buyer Types, and Market Niches Nathan tests Adrian's openness to a $6 million acquisition and maps out potential strategic buyers, while Adrian highlights legal market stickiness.17:00–19:14 · Nathan pushing back 0/10 The Famous Five Questions with Adrian Dayton Nathan conducts the standard Famous Five rapid-fire questions and provides a comprehensive recap of Clearview Social's core business metrics.

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

0:00 · Nathan 67.9% · guest 32.1%0:00 · Nathan 67.9% · guest 32.1%3:00 · Nathan 17.6% · guest 82.4%3:00 · Nathan 17.6% · guest 82.4%6:00 · Nathan 32.3% · guest 67.7%6:00 · Nathan 32.3% · guest 67.7%9:00 · Nathan 53.5% · guest 46.5%9:00 · Nathan 53.5% · guest 46.5%12:00 · Nathan 25.4% · guest 74.6%12:00 · Nathan 25.4% · guest 74.6%15:00 · Nathan 26.2% · guest 73.8%15:00 · Nathan 26.2% · guest 73.8%18:00 · Nathan 58.7% · guest 41.3%18:00 · Nathan 58.7% · guest 41.3%
Sharpest disagreement ▶ 11:01 Adrian pushes back on raising sales rep quotas

Adrian rejects the premise that quotas can simply be raised, citing lead generation limits and the constrained total addressable market in their niche.

 Hardest push from Nathan ▶ 10:45 Nathan challenges the 2x OTE-to-quota ratio

Nathan directly presses Adrian on why his sales reps are only tasked with 2x their OTE instead of the industry standard 4x to 5x multiple.

 Biggest teaching moment ▶ 5:50 Adrian explains legal niche contract norms

Adrian educates Nathan on how vertical SaaS in law and accounting routinely builds in automatic 7% annual price increases, unlike B2C software.

 Nathan holds their own ▶ 15:23 Nathan details strategic acquisition valuation dynamics

Nathan demonstrates deep M&A knowledge, explaining multiple arbitrage and why larger SaaS players would pay a premium to acquire $2.5M ARR.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Subscribe to the Nathan Latka Podcast Feed 4111 Nathan introduces the interview and reviews historical benchmarks from Adrian's 2018 appearance, such as customer count and ACV.
ARR Performance and Navigating COVID-19 5213 Nathan digs into annual recurring revenue, gross versus net churn, and Adrian's contractual built-in price escalators during COVID.
Capitalization, Government Loans, and Team Composition 4112 Nathan reviews capital structure, government assistance (PPP and loan), and verifies EBITDA profitability alongside headcount.
HostGator Website Hosting Mid-Roll Advertisement 6225 Following the mid-roll ad, Nathan challenges Adrian on his sales quotas, pointing out that a 2x quota-to-OTE ratio lags behind typical SaaS benchmarks.
Exit Valuation, Buyer Types, and Market Niches 6312 Nathan tests Adrian's openness to a $6 million acquisition and maps out potential strategic buyers, while Adrian highlights legal market stickiness.
The Famous Five Questions with Adrian Dayton 4000 Nathan conducts the standard Famous Five rapid-fire questions and provides a comprehensive recap of Clearview Social's core business metrics.

Statements from this episode (15)

Assertion Not checkable as stated
Dayton: Clearview Social has surpassed 180 customers
“We've now crossed 180 customers.”
Adrian Dayton Oct 27, 2020 ▶ 2:13
Assertion Not checkable as stated
Dayton: Clearview Social's ACV has risen above $13,000
“So our ACV is up over 13,000 now.”
Adrian Dayton Oct 27, 2020 ▶ 2:45
Assertion Not checkable as stated
Clearview Social finished 2019 at over $2.3M ARR
“So we finished 2019 just over 2.3 million in our run rate.”
Adrian Dayton Oct 27, 2020 ▶ 3:31
Assertion Not checkable as stated
Dayton: Clearview Social sees 10% logo churn and 14% revenue churn
“So our logo turns about 10%. Overall churn is about 14% on revenue in the year.”
Adrian Dayton Oct 27, 2020 ▶ 4:41
Assertion Not checkable as stated
Clearview's average customer expansion dropped from 10% to 5% in 2020
“In past years, average upgrades were about 10% of ARR each year from current customers. Now we're, we have in our contracts a seven percent annual upgrade, and we're just like, we're lucky to get that seven percent now. So the average is five percent.”
Adrian Dayton Oct 27, 2020 ▶ 5:36
Disclosure
Dayton: Clearview Social received $270k in PPP funds
“So we got 270,000 dollars.”
Adrian Dayton Oct 27, 2020 ▶ 6:40
Disclosure
Dayton: Clearview Social raised $1.2M from angels and $300k loan
“That's about 1.2 from angels and about 300,000 from a government loan.”
Adrian Dayton Oct 27, 2020 ▶ 7:16
Assertion Not checkable as stated
Dayton: Clearview Social is EBITDA positive and barely profitable
“Yeah. So we're profitable, but we're right on the line.”
Adrian Dayton Oct 27, 2020 ▶ 7:45
Disclosure
Clearview sets sales quota at $25k in new monthly ARR per rep
“So the quota per salesperson is About 25,000 dollars ARR per month in sales.”
Adrian Dayton Oct 27, 2020 ▶ 10:09
Disclosure
Clearview CAC doubled to $25k for a $13k ACV customer during COVID
“In the current market, we're currently paying 25,000 dollars to get a 13,000 dollar customer. And that's been through the pandemic. Pre-pandemic, we were closer to nine or 10,000 dollars as a CAC.”
Adrian Dayton Oct 27, 2020 ▶ 12:05
Disclosure
Dayton would consider a $6M all-cash buyout for Clearview Social
“That's probably in the ballpark of where I would be. I would listen to that.”
Adrian Dayton Oct 27, 2020 ▶ 13:03
Disclosure
Dayton: Owns more than half of Clearview Social
“Yes, I own more than half of the company.”
Adrian Dayton Oct 27, 2020 ▶ 14:16
Assertion Not checkable as stated
Dayton: Clearview Social retains customers for 90 months on average
“We're retaining our customers for 90 months on average, right?”
Adrian Dayton Oct 27, 2020 ▶ 15:50
Assertion Not checkable as stated
Law firms comprise 70% of Clearview Social's customer base
“So, so law firms are probably 70% of our customers. Including about 30 of the top 100 law firms in the country.”
Adrian Dayton Oct 27, 2020 ▶ 16:24
Assertion Supported
Latka: SalesLoft has surpassed $50M in ARR
“Kyle and the team down there building something special just past fifty million bucks in ARR.”
Nathan Latka Oct 27, 2020 ▶ 17:50
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