May 31, 2020 · 20m · top-founders
LivingSecurity.com: Guess What Multiple They're Raising $5m Series A At
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this interview, Nathan Latka speaks with Ashley Rose, CEO and co-founder of Living Security, exploring how the company achieved 10x revenue growth to reach $115,000 in monthly recurring revenue through a hybrid model of immersive cybersecurity escape rooms and enterprise SaaS training software.
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 46.1% of the talking time here. How this is scored →
Nathan as informed peer 4.6 Guest teaching 2.0 Guest disagreement 1.1 Nathan pushing back 3.1
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 8:17 Ashley firmly defends physical escape rooms against VC pressure
Ashley refutes the common venture capital framing that physical escape rooms are a distracting low-margin service by arguing the market demands it and it drives high-margin recurring conversions.
Hardest push from Nathan ▶ 12:42 Nathan warns of down round ratchets from high multiplesNathan directly challenges Ashley's target of a north of 10x multiple, warning her about the severe downside risks of ratchets, liquidation preferences, and growth pressure.
Biggest teaching moment ▶ 7:19 Ashley explains the escape room software license revenue modelAshley corrects Nathan's assumption that the escape rooms are purely service revenue by explaining that clients pay recurring annual SaaS licenses to run the platform themselves.
Nathan holds their own ▶ 9:35 Nathan breaks down net retention math and expansion metricsNathan showcases strong financial fluency by immediately dissecting Ashley's reported numbers into gross churn versus historical account expansion components.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Executive Summary of Living Security's Rapid Growth | 4 | 2 | 1 | 3 | Nathan introduces the company's metrics before immediately probing the exact split between professional training services and recurring SaaS software revenue. Ashley clarifies that the business is three-quarters SaaS and one-quarter services. | |
| Enterprise Customer Delivery and Unexpected Guest Interruption | 4 | 2 | 1 | 2 | Ashley details how enterprise clients start with the physical escape room before cross-selling to the online platform, punctuated by a brief interruption from her puppy. Nathan explores pricing tiers and annual contract values. | |
| Founding Journey, Equity Distribution, and Customer Segmentation | 6 | 3 | 2 | 5 | Nathan digs into co-founder equity splits and questions the logic of keeping professional escape room services rather than going pure SaaS. Ashley defends the blended strategy by demonstrating how the escape room acts as an efficient high-margin funnel. | |
| Retention Metrics, Churn Rates, and Expansion Dynamics | 7 | 3 | 2 | 6 | Nathan deconstructs the mechanics behind Ashley's 300%+ net retention figures and asks about valuation expectations for their Series A. He pushes back on targeting multiples above 10x by warning of down-round ratchets and liquidation preference traps. | |
| Customer Acquisition Cost, Payback Periods, and Event Marketing | 6 | 2 | 1 | 4 | Nathan drills down into CAC payback metrics and sales team unit economics, pressing Ashley to define the exact ARR quota expectations for their direct sales rep and incoming VP of Sales. | |
| Displacing Incumbents and the Card Game Inbound Funnel | 5 | 2 | 1 | 2 | Ashley details their high-converting direct-mail physical card game lead generation funnel. Nathan closes with standard Famous Five rapid-fire background questions. | |
| Episode Recap and Final Financial Overview | 0 | 0 | 0 | 0 | Nathan delivers a solo closing recap summarizing Living Security's ARR trajectory, retention figures, and funding plans. |
Statements from this episode (21)
Three-quarters of Living Security's 2019 revenue came from SaaS
“In twenty-nineteen, we were three-quarters SaaS revenue, and then we had another portion of our revenue that was services-based.”
Living Security primarily targets Fortune 1000 enterprise customers
“We work mostly in the Fortune 1000 Enterprise and they are buying training from us that again, it's delivered through an experience. The experience can either be online or in person, but they're subscribing to a SaaS application to help them run and enable the…”
Living Security cross-sells enterprise SaaS via in-person cybersecurity escape rooms
“With our cybersecurity escape room essentially it's an in-person training experience that we actually enable our clients to run continuously throughout the year with a subscription to the platform that manages it. And then that client, they usually bring, you …”
Living Security reports a $24,000 average annual contract value
“So our average currently is 24,000 per year, and that's for a good person of their organization.”
Living Security charges $5 to $20 per user annually
“So we price per user is between five and 20 dollars per user per year. Most of our clients are training between a thousand to 3000 of their users.”
Living Security's co-founders maintain an even 50/50 equity split
“We're an even fifty-fifty split.”
Living Security has raised $1.75M in total equity funding
“To date, we're at around 1.75 raised total.”
Ashley Rose: Living Security has reached nearly 60 licensed customers
“We are at 58, so all 60 licensed customers.”
Living Security surpasses $115,000 in monthly recurring revenue
“We're over one 15 at this point total.”
Living Security boasts 1% gross churn and 312% net revenue expansion
“Right, so one percent revenue churn, gross revenue churn, and then over another, I think it was 312% in growth.”
Rose: Living Security's Expanded Online Accounts Exceed Six Figures
“The larger expanded accounts on our online platform are over six figures.”
Living Security grew monthly recurring revenue 10x over a single year
“A year ago we were just over a 10 K in MRR. So we've seen over a 10 X growth from January of 2019 to 20 20.”
Living Security expects a Series A to reach cash flow positive
“We think between five and eight million, we can take that in the door and we can actually get to cash flow positive.”
Living Security targets greater than a 10x revenue multiple for Series A
“We're looking at higher than a 10 X multiple.”
Living Security achieves a six-month CAC payback on a $24,000 ACV
“So we're at about a 50% year paybacks around a six month payback period. So just around that 10 ish thousand.”
Half of Living Security's new customers convert directly via the website
“But we're actually seeing about 50% of our new customers come through our website.”
Living Security's VP of Sales carries full team quota responsibility
“He's responsible for full team quota. So anything, any difference between the sales rep and then what we're looking to hit for the team, he would be responsible for making up and then he'll also be responsible for growing the team.”
A physical card game pop-up is Living Security's top lead generator
“That's actually our biggest form submission on our website.”