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Mar 1, 2020 · 16m · top-founders

1681 Why This $5m Legal Compliance Software is Looking for a $5m Bridge Round

Jaideep Kewalramani · 8m 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

Legasys CEO Jaideep Kewalramani breaks down how his legal compliance software company scaled to over $5 million in recurring revenue with healthy double-digit EBITDA margins while preparing for an upcoming $5 million bridge round to accelerate global growth.

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 36.3% of the talking time here. How this is scored →

Nathan as informed peer 5.5 Guest teaching 2.8 Guest disagreement 1.5 Nathan pushing back 3.5
05100:0010:000:53–4:27 · Nathan as informed peer 6/10 Legasys Product Overview and Compliance Mapping Solutions Nathan quickly breaks down the SaaS unit economics by calculating the monthly revenue from 12 clients with 20 seats at $9 per seat. Jaideep answers cooperatively and confirms the calculations.4:27–8:12 · Nathan as informed peer 7/10 Annual Maintenance Contracts and Total Recurring Revenue Breakdown Jaideep corrects Nathan's initial revenue extrapolation by explaining that annual maintenance contracts on legacy deals generate significant recurring revenue beyond pure SaaS. Nathan pushes on the distinction between the 20 pure SaaS customers and the broader 500-client base to untangle the real ARR breakdown.8:13–10:26 · Nathan as informed peer 4/10 CEO Background, Strategic M&A, and Macroeconomic Headwinds Jaideep explains his background joining the company 100 days prior and educates Nathan on how massive Indian tax reforms caused flat YoY growth due to stalled corporate compliance budgets.10:26–13:00 · Nathan as informed peer 5/10 Historical Equity Funding and Upcoming $5M Bridge Round Nathan presses Jaideep to clarify whether the $5M bridge round is already secured in the bank or merely being sought for 2019, clearing up potential ambiguity.13:01–15:33 · Nathan as informed peer 5/10 Team Geography, Regional Expansion, and EBITDA Margins Jaideep declines to share exact profitability due to investor confidentiality, but Nathan presses to establish whether the company is breakeven or generating double-digit EBITDA margins.15:33–16:05 · Nathan as informed peer 6/10 Episode Conclusion and Performance Summary Nathan delivers a rapid-fire outro monologue summarizing Legasys's revenue, customer counts, headcount, margins, and upcoming capital raise.0:53–4:27 · Guest teaching 1/10 Legasys Product Overview and Compliance Mapping Solutions Nathan quickly breaks down the SaaS unit economics by calculating the monthly revenue from 12 clients with 20 seats at $9 per seat. Jaideep answers cooperatively and confirms the calculations.4:27–8:12 · Guest teaching 7/10 Annual Maintenance Contracts and Total Recurring Revenue Breakdown Jaideep corrects Nathan's initial revenue extrapolation by explaining that annual maintenance contracts on legacy deals generate significant recurring revenue beyond pure SaaS. Nathan pushes on the distinction between the 20 pure SaaS customers and the broader 500-client base to untangle the real ARR breakdown.8:13–10:26 · Guest teaching 5/10 CEO Background, Strategic M&A, and Macroeconomic Headwinds Jaideep explains his background joining the company 100 days prior and educates Nathan on how massive Indian tax reforms caused flat YoY growth due to stalled corporate compliance budgets.10:26–13:00 · Guest teaching 2/10 Historical Equity Funding and Upcoming $5M Bridge Round Nathan presses Jaideep to clarify whether the $5M bridge round is already secured in the bank or merely being sought for 2019, clearing up potential ambiguity.13:01–15:33 · Guest teaching 2/10 Team Geography, Regional Expansion, and EBITDA Margins Jaideep declines to share exact profitability due to investor confidentiality, but Nathan presses to establish whether the company is breakeven or generating double-digit EBITDA margins.15:33–16:05 · Guest teaching 0/10 Episode Conclusion and Performance Summary Nathan delivers a rapid-fire outro monologue summarizing Legasys's revenue, customer counts, headcount, margins, and upcoming capital raise.0:53–4:27 · Guest disagreement 1/10 Legasys Product Overview and Compliance Mapping Solutions Nathan quickly breaks down the SaaS unit economics by calculating the monthly revenue from 12 clients with 20 seats at $9 per seat. Jaideep answers cooperatively and confirms the calculations.4:27–8:12 · Guest disagreement 3/10 Annual Maintenance Contracts and Total Recurring Revenue Breakdown Jaideep corrects Nathan's initial revenue extrapolation by explaining that annual maintenance contracts on legacy deals generate significant recurring revenue beyond pure SaaS. Nathan pushes on the distinction between the 20 pure SaaS customers and the broader 500-client base to untangle the real ARR breakdown.8:13–10:26 · Guest disagreement 1/10 CEO Background, Strategic M&A, and Macroeconomic Headwinds Jaideep explains his background joining the company 100 days prior and educates Nathan on how massive Indian tax reforms caused flat YoY growth due to stalled corporate compliance budgets.10:26–13:00 · Guest disagreement 1/10 Historical Equity Funding and Upcoming $5M Bridge Round Nathan presses Jaideep to clarify whether the $5M bridge round is already secured in the bank or merely being sought for 2019, clearing up potential ambiguity.13:01–15:33 · Guest disagreement 3/10 Team Geography, Regional Expansion, and EBITDA Margins Jaideep declines to share exact profitability due to investor confidentiality, but Nathan presses to establish whether the company is breakeven or generating double-digit EBITDA margins.15:33–16:05 · Guest disagreement 0/10 Episode Conclusion and Performance Summary Nathan delivers a rapid-fire outro monologue summarizing Legasys's revenue, customer counts, headcount, margins, and upcoming capital raise.0:53–4:27 · Nathan pushing back 2/10 Legasys Product Overview and Compliance Mapping Solutions Nathan quickly breaks down the SaaS unit economics by calculating the monthly revenue from 12 clients with 20 seats at $9 per seat. Jaideep answers cooperatively and confirms the calculations.4:27–8:12 · Nathan pushing back 6/10 Annual Maintenance Contracts and Total Recurring Revenue Breakdown Jaideep corrects Nathan's initial revenue extrapolation by explaining that annual maintenance contracts on legacy deals generate significant recurring revenue beyond pure SaaS. Nathan pushes on the distinction between the 20 pure SaaS customers and the broader 500-client base to untangle the real ARR breakdown.8:13–10:26 · Nathan pushing back 2/10 CEO Background, Strategic M&A, and Macroeconomic Headwinds Jaideep explains his background joining the company 100 days prior and educates Nathan on how massive Indian tax reforms caused flat YoY growth due to stalled corporate compliance budgets.10:26–13:00 · Nathan pushing back 5/10 Historical Equity Funding and Upcoming $5M Bridge Round Nathan presses Jaideep to clarify whether the $5M bridge round is already secured in the bank or merely being sought for 2019, clearing up potential ambiguity.13:01–15:33 · Nathan pushing back 6/10 Team Geography, Regional Expansion, and EBITDA Margins Jaideep declines to share exact profitability due to investor confidentiality, but Nathan presses to establish whether the company is breakeven or generating double-digit EBITDA margins.15:33–16:05 · Nathan pushing back 0/10 Episode Conclusion and Performance Summary Nathan delivers a rapid-fire outro monologue summarizing Legasys's revenue, customer counts, headcount, margins, and upcoming capital raise.

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

0:00 · Nathan 42.3% · guest 57.7%0:00 · Nathan 42.3% · guest 57.7%3:00 · Nathan 33.9% · guest 66.1%3:00 · Nathan 33.9% · guest 66.1%6:00 · Nathan 50.4% · guest 49.6%6:00 · Nathan 50.4% · guest 49.6%9:00 · Nathan 20.3% · guest 79.7%9:00 · Nathan 20.3% · guest 79.7%12:00 · Nathan 21.7% · guest 78.3%12:00 · Nathan 21.7% · guest 78.3%15:00 · Nathan 71.1% · guest 28.9%15:00 · Nathan 71.1% · guest 28.9%
Sharpest disagreement ▶ 13:49 Jaideep resists disclosing profitability numbers

Jaideep establishes a clear boundary against disclosing private financials, citing investor confidentiality constraints.

 Hardest push from Nathan ▶ 11:34 Nathan demands clarity on funding status

Nathan repeatedly clarifies whether the $5 million bridge round is committed cash in the bank or an aspirational fundraising target.

 Biggest teaching moment ▶ 4:41 Jaideep explains AMC revenue model

Jaideep corrects Nathan's math showing why pure SaaS percentages miss the massive multi-million dollar annual maintenance contract recurring base.

 Nathan holds their own ▶ 7:47 Nathan synthesizes the full unit economics

Nathan recalibrates on the fly, correctly calculating average customer contract value across 500 customers at $800 to $900 per month.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Legasys Product Overview and Compliance Mapping Solutions 6112 Nathan quickly breaks down the SaaS unit economics by calculating the monthly revenue from 12 clients with 20 seats at $9 per seat. Jaideep answers cooperatively and confirms the calculations.
Annual Maintenance Contracts and Total Recurring Revenue Breakdown 7736 Jaideep corrects Nathan's initial revenue extrapolation by explaining that annual maintenance contracts on legacy deals generate significant recurring revenue beyond pure SaaS. Nathan pushes on the distinction between the 20 pure SaaS customers and the broader 500-client base to untangle the real ARR breakdown.
CEO Background, Strategic M&A, and Macroeconomic Headwinds 4512 Jaideep explains his background joining the company 100 days prior and educates Nathan on how massive Indian tax reforms caused flat YoY growth due to stalled corporate compliance budgets.
Historical Equity Funding and Upcoming $5M Bridge Round 5215 Nathan presses Jaideep to clarify whether the $5M bridge round is already secured in the bank or merely being sought for 2019, clearing up potential ambiguity.
Team Geography, Regional Expansion, and EBITDA Margins 5236 Jaideep declines to share exact profitability due to investor confidentiality, but Nathan presses to establish whether the company is breakeven or generating double-digit EBITDA margins.
Episode Conclusion and Performance Summary 6000 Nathan delivers a rapid-fire outro monologue summarizing Legasys's revenue, customer counts, headcount, margins, and upcoming capital raise.

Statements from this episode (11)

Prediction Not checkable as stated
Legasys revenue will shift from 85 percent one-time toward SaaS
“So in the last two months, I would say the breakup is roughly between 85% one time and 15% SaaS, but the number is going to shift towards the SaaS model in the coming years.”
Jaideep Kewalramani Mar 1, 2020 ▶ 2:33
Disclosure
Legasys charges a flat $9 per user monthly
“Roughly about, say, nine dollars per user per month. And we do not distinguish between the type of users. So whether you're a general counsel or a company secretary or a regular compliance user or someone who's just kind of reporting the compliance of the syst…”
Jaideep Kewalramani Mar 1, 2020 ▶ 3:01
Disclosure
Legasys SaaS business has 12 clients averaging 20 seats each
“We've got about a dozen clients, and on an average, each client would have a user base of say 20 users, depending on the Size and the nature of the business that they have.”
Jaideep Kewalramani Mar 1, 2020 ▶ 4:01
Assertion Not checkable as stated
Legasys generates $5M to $6M in total annual recurring revenue
“We are somewhere between five to six million dollars all put together each year.”
Jaideep Kewalramani Mar 1, 2020 ▶ 5:54
Assertion Not checkable as stated
Legasys serves about 500 customers in India and clients in 44 countries
“All put together. We have about 500 customers in in India, which is the primary market we serve today. And we are, we also serve customers in 44 other countries, but they have strong links back to India as their primary market.”
Jaideep Kewalramani Mar 1, 2020 ▶ 7:27
Assertion Not checkable as stated
Legasys revenue remained flat year-over-year due to Indian tax reforms
“We were more or less in the same zone a year ago because the Indian economy had some strong headwinds in terms of regulatory changes, especially on the taxation side.”
Jaideep Kewalramani Mar 1, 2020 ▶ 9:38
Assertion Not checkable as stated
Legasys historically raised around $2M in total equity funding
“I think all put together I mean, not be correct with my numbers because it was many, many years ago. I suspect in the range of say, two million dollars or so.”
Jaideep Kewalramani Mar 1, 2020 ▶ 10:54
Disclosure
Legasys plans to raise a $5M bridge round for product development
“So we've set aside some about five million as a bridge round before we go in for a bigger raise, and we would like to use that capital for funding some of the product development and sales expansion.”
Jaideep Kewalramani Mar 1, 2020 ▶ 11:18
Assertion Not checkable as stated
Legasys beats Big Four accounting firms in most head-to-head deals
“There are times when we win against the big fours as well. In fact not a few times, most of the times we win against the big four.”
Jaideep Kewalramani Mar 1, 2020 ▶ 12:40
Assertion Not checkable as stated
Legasys employs over 100 people, mostly with legal backgrounds
“So we're a little over a hundred mostly people who have a law background.”
Jaideep Kewalramani Mar 1, 2020 ▶ 13:06
Assertion Not checkable as stated
Legasys generates an EBITDA margin between 12 and 20 percent
“It could range anywhere from 12 to 20% EBITDA.”
Jaideep Kewalramani Mar 1, 2020 ▶ 14:34
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