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Jan 30, 2020 · 19m · top-founders

1650 How He Kept Leverage in $15m Raise Despite ARR Being Less Than $25m Raised To Date

Heath Wells · 10m spoken Nathan Latka · 6m spoken
0:00 / 0:00

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Host Nathan Latka interviews Heath Wells, CEO of NuORDER, exploring how the B2B wholesale e-commerce platform scaled to nearly $18 million in ARR, raised $40 million in venture capital, and established strong unit economics across 1,000 paying brands and 400,000 retail buyers.

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 38.2% of the talking time here. How this is scored →

Nathan as informed peer 6.0 Guest teaching 3.0 Guest disagreement 2.7 Nathan pushing back 4.3
05100:0010:000:00–2:30 · Nathan as informed peer 5/10 Executive Overview and Key Financial Metrics Nathan introduces the company's metrics and quickly pushes Heath to compress his varied customer pricing tiers into a single average contract value for the show's format.2:30–6:14 · Nathan as informed peer 6/10 Growth Journey and Recent $15 Million Funding Round Nathan presses on runway and burn rate after Heath claims they can turn cash flow positive at any time, forcing Heath to acknowledge their actual burn trajectory and timeline.6:14–9:42 · Nathan as informed peer 7/10 ARR Progression, Enterprise Strategy, and Expansion Revenue Nathan interrogates the revenue and growth math, attempting to pin down exact ARR numbers while Heath actively plays defense as a savvy listener of the podcast who refuses to make it easy.9:45–12:02 · Nathan as informed peer 6/10 HostGator Promotional Announcement After an ad break, Nathan calculates implied churn from expansion figures, prompting Heath to correct the math and specify single-digit gross revenue churn.12:02–15:20 · Nathan as informed peer 8/10 Payback Economics and Maintaining Founder Leverage Nathan breaks down gross margin payback realities and challenges Heath on how he maintained fundraising leverage when total raised exceeded ARR, leading to an insightful breakdown of market timing and capital efficiency.15:20–18:12 · Nathan as informed peer 4/10 The Famous Five and Leadership Reflections The interview wraps up with the Famous Five questions and a meta-discussion on why founders choose to come on Nathan's show.0:00–2:30 · Guest teaching 3/10 Executive Overview and Key Financial Metrics Nathan introduces the company's metrics and quickly pushes Heath to compress his varied customer pricing tiers into a single average contract value for the show's format.2:30–6:14 · Guest teaching 3/10 Growth Journey and Recent $15 Million Funding Round Nathan presses on runway and burn rate after Heath claims they can turn cash flow positive at any time, forcing Heath to acknowledge their actual burn trajectory and timeline.6:14–9:42 · Guest teaching 4/10 ARR Progression, Enterprise Strategy, and Expansion Revenue Nathan interrogates the revenue and growth math, attempting to pin down exact ARR numbers while Heath actively plays defense as a savvy listener of the podcast who refuses to make it easy.9:45–12:02 · Guest teaching 4/10 HostGator Promotional Announcement After an ad break, Nathan calculates implied churn from expansion figures, prompting Heath to correct the math and specify single-digit gross revenue churn.12:02–15:20 · Guest teaching 3/10 Payback Economics and Maintaining Founder Leverage Nathan breaks down gross margin payback realities and challenges Heath on how he maintained fundraising leverage when total raised exceeded ARR, leading to an insightful breakdown of market timing and capital efficiency.15:20–18:12 · Guest teaching 1/10 The Famous Five and Leadership Reflections The interview wraps up with the Famous Five questions and a meta-discussion on why founders choose to come on Nathan's show.0:00–2:30 · Guest disagreement 2/10 Executive Overview and Key Financial Metrics Nathan introduces the company's metrics and quickly pushes Heath to compress his varied customer pricing tiers into a single average contract value for the show's format.2:30–6:14 · Guest disagreement 3/10 Growth Journey and Recent $15 Million Funding Round Nathan presses on runway and burn rate after Heath claims they can turn cash flow positive at any time, forcing Heath to acknowledge their actual burn trajectory and timeline.6:14–9:42 · Guest disagreement 5/10 ARR Progression, Enterprise Strategy, and Expansion Revenue Nathan interrogates the revenue and growth math, attempting to pin down exact ARR numbers while Heath actively plays defense as a savvy listener of the podcast who refuses to make it easy.9:45–12:02 · Guest disagreement 3/10 HostGator Promotional Announcement After an ad break, Nathan calculates implied churn from expansion figures, prompting Heath to correct the math and specify single-digit gross revenue churn.12:02–15:20 · Guest disagreement 2/10 Payback Economics and Maintaining Founder Leverage Nathan breaks down gross margin payback realities and challenges Heath on how he maintained fundraising leverage when total raised exceeded ARR, leading to an insightful breakdown of market timing and capital efficiency.15:20–18:12 · Guest disagreement 1/10 The Famous Five and Leadership Reflections The interview wraps up with the Famous Five questions and a meta-discussion on why founders choose to come on Nathan's show.0:00–2:30 · Nathan pushing back 4/10 Executive Overview and Key Financial Metrics Nathan introduces the company's metrics and quickly pushes Heath to compress his varied customer pricing tiers into a single average contract value for the show's format.2:30–6:14 · Nathan pushing back 5/10 Growth Journey and Recent $15 Million Funding Round Nathan presses on runway and burn rate after Heath claims they can turn cash flow positive at any time, forcing Heath to acknowledge their actual burn trajectory and timeline.6:14–9:42 · Nathan pushing back 6/10 ARR Progression, Enterprise Strategy, and Expansion Revenue Nathan interrogates the revenue and growth math, attempting to pin down exact ARR numbers while Heath actively plays defense as a savvy listener of the podcast who refuses to make it easy.9:45–12:02 · Nathan pushing back 5/10 HostGator Promotional Announcement After an ad break, Nathan calculates implied churn from expansion figures, prompting Heath to correct the math and specify single-digit gross revenue churn.12:02–15:20 · Nathan pushing back 5/10 Payback Economics and Maintaining Founder Leverage Nathan breaks down gross margin payback realities and challenges Heath on how he maintained fundraising leverage when total raised exceeded ARR, leading to an insightful breakdown of market timing and capital efficiency.15:20–18:12 · Nathan pushing back 1/10 The Famous Five and Leadership Reflections The interview wraps up with the Famous Five questions and a meta-discussion on why founders choose to come on Nathan's show.

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

0:00 · Nathan 53.3% · guest 46.7%0:00 · Nathan 53.3% · guest 46.7%3:00 · Nathan 23.4% · guest 76.6%3:00 · Nathan 23.4% · guest 76.6%6:00 · Nathan 33.2% · guest 66.8%6:00 · Nathan 33.2% · guest 66.8%9:00 · Nathan 45.5% · guest 54.5%9:00 · Nathan 45.5% · guest 54.5%12:00 · Nathan 38% · guest 62%12:00 · Nathan 38% · guest 62%15:00 · Nathan 21.8% · guest 78.2%15:00 · Nathan 21.8% · guest 78.2%18:00 · Nathan 78.3% · guest 21.7%18:00 · Nathan 78.3% · guest 21.7%
Sharpest disagreement ▶ 8:51 Refusing to give easy revenue numbers

Heath explicitly acknowledges Nathan's interview playbook and resists giving exact ARR figures, remarking that making it easy would mean losing the game.

 Hardest push from Nathan ▶ 5:00 Calling out the cash-flow positive spin

Nathan rejects Heath's theoretical claim of being able to become cash flow positive at will, pressing him to admit his actual burn rate and investment plans.

 Biggest teaching moment ▶ 10:44 Clarifying gross vs net churn metrics

Heath corrects Nathan's assumption of a 20% annual churn rate by clarifying his expansion percentage and pointing out that gross churn is actually in the single digits.

 Nathan holds their own ▶ 13:30 Framework for founder leverage in VC rounds

Nathan demonstrates financial mastery by citing his ARR-to-funding ratio framework to question Heath's valuation leverage in his $15M raise.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Executive Overview and Key Financial Metrics 5324 Nathan introduces the company's metrics and quickly pushes Heath to compress his varied customer pricing tiers into a single average contract value for the show's format.
Growth Journey and Recent $15 Million Funding Round 6335 Nathan presses on runway and burn rate after Heath claims they can turn cash flow positive at any time, forcing Heath to acknowledge their actual burn trajectory and timeline.
ARR Progression, Enterprise Strategy, and Expansion Revenue 7456 Nathan interrogates the revenue and growth math, attempting to pin down exact ARR numbers while Heath actively plays defense as a savvy listener of the podcast who refuses to make it easy.
HostGator Promotional Announcement 6435 After an ad break, Nathan calculates implied churn from expansion figures, prompting Heath to correct the math and specify single-digit gross revenue churn.
Payback Economics and Maintaining Founder Leverage 8325 Nathan breaks down gross margin payback realities and challenges Heath on how he maintained fundraising leverage when total raised exceeded ARR, leading to an insightful breakdown of market timing and capital efficiency.
The Famous Five and Leadership Reflections 4111 The interview wraps up with the Famous Five questions and a meta-discussion on why founders choose to come on Nathan's show.

Statements from this episode (13)

Disclosure
NuORDER charges brands between $12,500 and $1 million annually
“Brands pay us a subscription fee ranging from around about 12 and a half thousand up to a million. Per month or year? Yeah, that's per year.”
Heath Wells Jan 30, 2020 ▶ 1:41
Disclosure
NuORDER's average customer pays between $30,000 and $50,000 annually
“It's between the 30 and 50,000 dollars.”
Heath Wells Jan 30, 2020 ▶ 2:08
Assertion Not checkable as stated
NuORDER serves 1,000 brand customers on its platform
“Total customers today is a thousand on the brand side.”
Heath Wells Jan 30, 2020 ▶ 3:12
Assertion Not checkable as stated
NuORDER reaches 400,000 retailers on its marketplace platform
“And on the retailer side, it's 400,000.”
Heath Wells Jan 30, 2020 ▶ 3:18
Disclosure
NuORDER announces $15 million raise, bringing total funding near $40 million
“Yeah, so we just announced a new raise of fifteen million dollars in growth capital. So it takes our total raise to close to forty million.”
Heath Wells Jan 30, 2020 ▶ 3:30
Assertion Not checkable as stated
NuORDER closed its $15 million funding round in 90 days
“What's exciting about this most recent raise, although it's our largest raise, it was actually our quickest. It took, you know, 90 days from actually first meeting to close.”
Heath Wells Jan 30, 2020 ▶ 3:40
Assertion Not checkable as stated
NuORDER reached cash-flow positive in 2016 before intentionally resuming burn
“We're one of these interesting SaaS companies, which in 2016, we actually turned cash positive and decided to strategically, you know, dip the other way, given the market changes and the growth.”
Heath Wells Jan 30, 2020 ▶ 4:26
Assertion Not checkable as stated
NuORDER had an ARR run rate under $10 million last year
“Yeah, less than, we were the less than ten million last year.”
Heath Wells Jan 30, 2020 ▶ 7:52
Assertion Not checkable as stated
Expansion accounts for 20% to 30% of NuORDER's total revenue
“You know, you could call, you know, 20, 30 something percent of our revenues is coming from there. And then the rest is from new business.”
Heath Wells Jan 30, 2020 ▶ 9:22
Disclosure
NuORDER maintains a net revenue retention rate above 110%
“Greater than a 110% on a net revenue basis.”
Heath Wells Jan 30, 2020 ▶ 10:54
Disclosure
NuORDER maintained perfect logo retention for enterprise customers this year
“In the enterprise cohort, We haven't lost a customer this year.”
Heath Wells Jan 30, 2020 ▶ 11:39
Assertion Not checkable as stated
NuORDER maintains a customer acquisition cost payback period under 12 months
“And so you know, where, where we are is sub-twelve months on a payback period.”
Heath Wells Jan 30, 2020 ▶ 12:38
Insight
Latka: Founders keep leverage when ARR exceeds total capital raised
“And usually the founder has the leverage. If one of two things are true, the company's cashflow positive, Or the ARR to funding ratio is above one, meaning ARR is more than what they raised.”
Nathan Latka Jan 30, 2020 ▶ 13:37
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