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Oct 11, 2020 · 18m · top-founders

NthRound Hits $300k ARR Creating Liquidity for Employee Option Grants

Graham McConnell · 9m spoken Nathan Latka · 7m spoken
0:00 / 0:00

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Nathan Latka interviews Graham McConnell, co-founder and CEO of NthRound, detailing how the equity management platform grew to $300k ARR by shifting focus from secondary trading to enterprise shareholder engagement and compliant liquidity.

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 42.8% of the talking time here. How this is scored →

Nathan as informed peer 5.2 Guest teaching 1.0 Guest disagreement 0.8 Nathan pushing back 2.8
05100:0010:001:34–5:50 · Nathan as informed peer 5/10 Introducing Graham McConnell and NthRound's Equity Management Vision Nathan quickly categorizes NthRound by framing it between Carta and Visible VC, which Graham affirms. The tone is collaborative as Graham details raising $4.3M from NEA and allocating family equity.5:52–8:42 · Nathan as informed peer 5/10 Enterprise Customer Growth and Shifting Away from Trading Nathan unpacks the pricing model to calculate $25k monthly revenue and clarifies the mechanics of stock options when Graham mentions his past options felt worthless. Graham details why they shifted away from a pure trading platform due to regulatory burdens.8:42–11:31 · Nathan as informed peer 6/10 Mechanics of Private Stock Listing and Employee Option Liquidity Graham clarifies that NthRound is technically a private listing service rather than an SEC-regulated exchange. Nathan probes user workflow friction around CFO approval for secondary transactions.11:32–16:38 · Nathan as informed peer 7/10 Engagement Metrics and Managing High-Volume Cap Tables Nathan presses on the growth trajectory, noting $300k ARR two years after a $4.3M raise creates tough board dynamics, and suggests a Sahil Lavingia/Gumroad style write-down recapitalization while citing Clate Mask at Infusionsoft.16:40–18:29 · Nathan as informed peer 3/10 Famous Five Rapid-Fire Questions and Episode Summary Nathan runs through the standard Famous Five questions and gives an executive recap of the company's metrics and trajectory.1:34–5:50 · Guest teaching 1/10 Introducing Graham McConnell and NthRound's Equity Management Vision Nathan quickly categorizes NthRound by framing it between Carta and Visible VC, which Graham affirms. The tone is collaborative as Graham details raising $4.3M from NEA and allocating family equity.5:52–8:42 · Guest teaching 1/10 Enterprise Customer Growth and Shifting Away from Trading Nathan unpacks the pricing model to calculate $25k monthly revenue and clarifies the mechanics of stock options when Graham mentions his past options felt worthless. Graham details why they shifted away from a pure trading platform due to regulatory burdens.8:42–11:31 · Guest teaching 2/10 Mechanics of Private Stock Listing and Employee Option Liquidity Graham clarifies that NthRound is technically a private listing service rather than an SEC-regulated exchange. Nathan probes user workflow friction around CFO approval for secondary transactions.11:32–16:38 · Guest teaching 1/10 Engagement Metrics and Managing High-Volume Cap Tables Nathan presses on the growth trajectory, noting $300k ARR two years after a $4.3M raise creates tough board dynamics, and suggests a Sahil Lavingia/Gumroad style write-down recapitalization while citing Clate Mask at Infusionsoft.16:40–18:29 · Guest teaching 0/10 Famous Five Rapid-Fire Questions and Episode Summary Nathan runs through the standard Famous Five questions and gives an executive recap of the company's metrics and trajectory.1:34–5:50 · Guest disagreement 1/10 Introducing Graham McConnell and NthRound's Equity Management Vision Nathan quickly categorizes NthRound by framing it between Carta and Visible VC, which Graham affirms. The tone is collaborative as Graham details raising $4.3M from NEA and allocating family equity.5:52–8:42 · Guest disagreement 1/10 Enterprise Customer Growth and Shifting Away from Trading Nathan unpacks the pricing model to calculate $25k monthly revenue and clarifies the mechanics of stock options when Graham mentions his past options felt worthless. Graham details why they shifted away from a pure trading platform due to regulatory burdens.8:42–11:31 · Guest disagreement 1/10 Mechanics of Private Stock Listing and Employee Option Liquidity Graham clarifies that NthRound is technically a private listing service rather than an SEC-regulated exchange. Nathan probes user workflow friction around CFO approval for secondary transactions.11:32–16:38 · Guest disagreement 1/10 Engagement Metrics and Managing High-Volume Cap Tables Nathan presses on the growth trajectory, noting $300k ARR two years after a $4.3M raise creates tough board dynamics, and suggests a Sahil Lavingia/Gumroad style write-down recapitalization while citing Clate Mask at Infusionsoft.16:40–18:29 · Guest disagreement 0/10 Famous Five Rapid-Fire Questions and Episode Summary Nathan runs through the standard Famous Five questions and gives an executive recap of the company's metrics and trajectory.1:34–5:50 · Nathan pushing back 2/10 Introducing Graham McConnell and NthRound's Equity Management Vision Nathan quickly categorizes NthRound by framing it between Carta and Visible VC, which Graham affirms. The tone is collaborative as Graham details raising $4.3M from NEA and allocating family equity.5:52–8:42 · Nathan pushing back 3/10 Enterprise Customer Growth and Shifting Away from Trading Nathan unpacks the pricing model to calculate $25k monthly revenue and clarifies the mechanics of stock options when Graham mentions his past options felt worthless. Graham details why they shifted away from a pure trading platform due to regulatory burdens.8:42–11:31 · Nathan pushing back 3/10 Mechanics of Private Stock Listing and Employee Option Liquidity Graham clarifies that NthRound is technically a private listing service rather than an SEC-regulated exchange. Nathan probes user workflow friction around CFO approval for secondary transactions.11:32–16:38 · Nathan pushing back 5/10 Engagement Metrics and Managing High-Volume Cap Tables Nathan presses on the growth trajectory, noting $300k ARR two years after a $4.3M raise creates tough board dynamics, and suggests a Sahil Lavingia/Gumroad style write-down recapitalization while citing Clate Mask at Infusionsoft.16:40–18:29 · Nathan pushing back 1/10 Famous Five Rapid-Fire Questions and Episode Summary Nathan runs through the standard Famous Five questions and gives an executive recap of the company's metrics and trajectory.

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

0:00 · Nathan 66.7% · guest 33.3%0:00 · Nathan 66.7% · guest 33.3%3:00 · Nathan 19% · guest 81%3:00 · Nathan 19% · guest 81%6:00 · Nathan 25.1% · guest 74.9%6:00 · Nathan 25.1% · guest 74.9%9:00 · Nathan 40.5% · guest 59.5%9:00 · Nathan 40.5% · guest 59.5%12:00 · Nathan 42.4% · guest 57.6%12:00 · Nathan 42.4% · guest 57.6%15:00 · Nathan 54.6% · guest 45.4%15:00 · Nathan 54.6% · guest 45.4%18:00 · Nathan 98.3% · guest 1.7%18:00 · Nathan 98.3% · guest 1.7%
Sharpest disagreement ▶ 9:04 Clarifying exchange regulatory status

Graham corrects the host's framing of a trading platform by pointing out that 'exchange' is a specific SEC-defined legal term and clarifying they operate strictly as a private listing service.

 Hardest push from Nathan ▶ 13:26 Challenging growth versus capital raised

Nathan directly challenges Graham on having only $300k ARR two years after raising $4.3M, pressing him on board pressure and the difficulty of raising an up-round.

 Biggest teaching moment ▶ 10:25 Explaining transfer restrictions on private stock

Graham walks through the legal barriers of private option liquidity, explaining how non-transferability restrictions on stock certificates require explicit CFO sign-off.

 Nathan holds their own ▶ 13:29 Citing Gumroad write-down playbook

Nathan demonstrates advanced venture knowledge by citing Sahil Lavingia's Gumroad structure as a viable strategy to buy out venture investors via a portfolio write-down.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Graham McConnell and NthRound's Equity Management Vision 5112 Nathan quickly categorizes NthRound by framing it between Carta and Visible VC, which Graham affirms. The tone is collaborative as Graham details raising $4.3M from NEA and allocating family equity.
Enterprise Customer Growth and Shifting Away from Trading 5113 Nathan unpacks the pricing model to calculate $25k monthly revenue and clarifies the mechanics of stock options when Graham mentions his past options felt worthless. Graham details why they shifted away from a pure trading platform due to regulatory burdens.
Mechanics of Private Stock Listing and Employee Option Liquidity 6213 Graham clarifies that NthRound is technically a private listing service rather than an SEC-regulated exchange. Nathan probes user workflow friction around CFO approval for secondary transactions.
Engagement Metrics and Managing High-Volume Cap Tables 7115 Nathan presses on the growth trajectory, noting $300k ARR two years after a $4.3M raise creates tough board dynamics, and suggests a Sahil Lavingia/Gumroad style write-down recapitalization while citing Clate Mask at Infusionsoft.
Famous Five Rapid-Fire Questions and Episode Summary 3001 Nathan runs through the standard Famous Five questions and gives an executive recap of the company's metrics and trajectory.

Statements from this episode (8)

Opinion
McConnell: Carta is weak on founder-shareholder communication
“Well Carta, I think really is centered on foreign evaluations and capital management, and we try to take that to the next level really creating a more engaging experience and, Facilitating communication between founders and their shareholders, which I think in…”
Graham McConnell Oct 11, 2020 ▶ 2:20
Disclosure
McConnell: NthRound backed by NEA and about a dozen Philly angels
“So our VC is NEA, New Enterprise Associates. And then we also brought in about a dozen individual investors from the Philly area.”
Graham McConnell Oct 11, 2020 ▶ 4:07
Disclosure
McConnell: NthRound raised $4.3M in seed round
“We raised 4.3 million for our seed round.”
Graham McConnell Oct 11, 2020 ▶ 4:18
Assertion Not checkable as stated
McConnell: NthRound has 25 customers
“We have 25 now.”
Graham McConnell Oct 11, 2020 ▶ 5:55
Assertion Not checkable as stated
McConnell: NthRound charges an average of $1,000 per month
“So on average, I'd say 12,000. We do have a sorry per month a thousand. We do have a lower tier now that's 8000 dollars a year.”
Graham McConnell Oct 11, 2020 ▶ 7:43
Assertion Supported
McConnell: Competing Secondary Platforms Charge 5% to 10% Equity Fee
“And those other platforms, not ours, but those other ones will typically charge between five and 10% of the value of that equity.”
Graham McConnell Oct 11, 2020 ▶ 10:15
Disclosure
McConnell strongly considered buying out NEA's shares at a discount
“I've definitely strongly considered it. And you know, I'm sure if any, it was listening today, they wouldn't be Wouldn't be thrilled, but it's, that's definitely an option.”
Graham McConnell Oct 11, 2020 ▶ 14:34
Insight
McConnell: Repeat founders understand employee equity liquidity needs better than first-timers
“Actually, it's funny you say that a lot of our early clients have been non first time founders because They felt it before and now they know the need. Whereas first time founder, you know, it's just not something that you think about very much.”
Graham McConnell Oct 11, 2020 ▶ 15:35
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