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Jul 23, 2018 · 19m · top-founders

1094 How he bought 15 people off cap table, hit $9m in ARR in workflow space

Brian Reale · 11m spoken Nathan Latka · 6m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs Podcast, host Nathan Latka interviews ProcessMaker founder and CEO Brian Reale to uncover how the bootstrapped workflow automation company scaled to nearly $10 million in ARR while buying out 15 early angel investors. Reale details the operational milestones, enterprise monetization models, and disciplined unit economics that enabled sustainable growth without institutional venture capital.

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 34.3% of the talking time here. How this is scored →

Nathan as informed peer 6.2 Guest teaching 2.7 Guest disagreement 1.8 Nathan pushing back 3.2
05100:0010:001:11–3:44 · Nathan as informed peer 6/10 ProcessMaker Overview and Core Workflow Functionality Nathan categorizes the company alongside iPaaS tools like Zapier and Segment. Brian clarifies the technical nuance, explaining that ProcessMaker focuses on human approval workflows rather than simple API plumbing.3:45–7:46 · Nathan as informed peer 5/10 Hybrid Delivery Model and Contract Values Nathan probes how on-premise deployments affect the balance sheet and revenue predictability, asking Brian to clarify contract sizes and the timeline of their pivot.7:50–11:00 · Nathan as informed peer 6/10 Buying Out Early Investors and Cap Table Cleanup Nathan presses into why the cap table was cluttered and how Brian managed to buy out early friends and family investors without giving away exact confidential M&A transaction terms.11:01–13:30 · Nathan as informed peer 8/10 Revenue Scale, Churn Rates, and Expansion Strategy Nathan demonstrates high domain knowledge by quickly cross-referencing Inc 5000 historical revenue data and calculating net churn and expansion revenue rates on the fly.13:30–15:55 · Nathan as informed peer 7/10 Customer Acquisition Cost and Capital Efficiency Nathan synthesizes Brian's CAC and payback period metrics, noting that aggressive venture-backed investors would likely push him to spend more to accelerate growth.15:55–18:52 · Nathan as informed peer 5/10 Future Exit Horizon and Venture Debt Perspective Nathan explores hypothetical acquisition valuations and venture debt financing, while Brian articulates his rationale for remaining debt-free and patient.1:11–3:44 · Guest teaching 5/10 ProcessMaker Overview and Core Workflow Functionality Nathan categorizes the company alongside iPaaS tools like Zapier and Segment. Brian clarifies the technical nuance, explaining that ProcessMaker focuses on human approval workflows rather than simple API plumbing.3:45–7:46 · Guest teaching 2/10 Hybrid Delivery Model and Contract Values Nathan probes how on-premise deployments affect the balance sheet and revenue predictability, asking Brian to clarify contract sizes and the timeline of their pivot.7:50–11:00 · Guest teaching 3/10 Buying Out Early Investors and Cap Table Cleanup Nathan presses into why the cap table was cluttered and how Brian managed to buy out early friends and family investors without giving away exact confidential M&A transaction terms.11:01–13:30 · Guest teaching 2/10 Revenue Scale, Churn Rates, and Expansion Strategy Nathan demonstrates high domain knowledge by quickly cross-referencing Inc 5000 historical revenue data and calculating net churn and expansion revenue rates on the fly.13:30–15:55 · Guest teaching 2/10 Customer Acquisition Cost and Capital Efficiency Nathan synthesizes Brian's CAC and payback period metrics, noting that aggressive venture-backed investors would likely push him to spend more to accelerate growth.15:55–18:52 · Guest teaching 2/10 Future Exit Horizon and Venture Debt Perspective Nathan explores hypothetical acquisition valuations and venture debt financing, while Brian articulates his rationale for remaining debt-free and patient.1:11–3:44 · Guest disagreement 3/10 ProcessMaker Overview and Core Workflow Functionality Nathan categorizes the company alongside iPaaS tools like Zapier and Segment. Brian clarifies the technical nuance, explaining that ProcessMaker focuses on human approval workflows rather than simple API plumbing.3:45–7:46 · Guest disagreement 1/10 Hybrid Delivery Model and Contract Values Nathan probes how on-premise deployments affect the balance sheet and revenue predictability, asking Brian to clarify contract sizes and the timeline of their pivot.7:50–11:00 · Guest disagreement 1/10 Buying Out Early Investors and Cap Table Cleanup Nathan presses into why the cap table was cluttered and how Brian managed to buy out early friends and family investors without giving away exact confidential M&A transaction terms.11:01–13:30 · Guest disagreement 2/10 Revenue Scale, Churn Rates, and Expansion Strategy Nathan demonstrates high domain knowledge by quickly cross-referencing Inc 5000 historical revenue data and calculating net churn and expansion revenue rates on the fly.13:30–15:55 · Guest disagreement 2/10 Customer Acquisition Cost and Capital Efficiency Nathan synthesizes Brian's CAC and payback period metrics, noting that aggressive venture-backed investors would likely push him to spend more to accelerate growth.15:55–18:52 · Guest disagreement 2/10 Future Exit Horizon and Venture Debt Perspective Nathan explores hypothetical acquisition valuations and venture debt financing, while Brian articulates his rationale for remaining debt-free and patient.1:11–3:44 · Nathan pushing back 2/10 ProcessMaker Overview and Core Workflow Functionality Nathan categorizes the company alongside iPaaS tools like Zapier and Segment. Brian clarifies the technical nuance, explaining that ProcessMaker focuses on human approval workflows rather than simple API plumbing.3:45–7:46 · Nathan pushing back 3/10 Hybrid Delivery Model and Contract Values Nathan probes how on-premise deployments affect the balance sheet and revenue predictability, asking Brian to clarify contract sizes and the timeline of their pivot.7:50–11:00 · Nathan pushing back 4/10 Buying Out Early Investors and Cap Table Cleanup Nathan presses into why the cap table was cluttered and how Brian managed to buy out early friends and family investors without giving away exact confidential M&A transaction terms.11:01–13:30 · Nathan pushing back 3/10 Revenue Scale, Churn Rates, and Expansion Strategy Nathan demonstrates high domain knowledge by quickly cross-referencing Inc 5000 historical revenue data and calculating net churn and expansion revenue rates on the fly.13:30–15:55 · Nathan pushing back 4/10 Customer Acquisition Cost and Capital Efficiency Nathan synthesizes Brian's CAC and payback period metrics, noting that aggressive venture-backed investors would likely push him to spend more to accelerate growth.15:55–18:52 · Nathan pushing back 3/10 Future Exit Horizon and Venture Debt Perspective Nathan explores hypothetical acquisition valuations and venture debt financing, while Brian articulates his rationale for remaining debt-free and patient.

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

0:00 · Nathan 49% · guest 51%0:00 · Nathan 49% · guest 51%3:00 · Nathan 20.5% · guest 79.5%3:00 · Nathan 20.5% · guest 79.5%6:00 · Nathan 35% · guest 65%6:00 · Nathan 35% · guest 65%9:00 · Nathan 33.4% · guest 66.6%9:00 · Nathan 33.4% · guest 66.6%12:00 · Nathan 26.6% · guest 73.4%12:00 · Nathan 26.6% · guest 73.4%15:00 · Nathan 20.5% · guest 79.5%15:00 · Nathan 20.5% · guest 79.5%18:00 · Nathan 76.4% · guest 23.6%18:00 · Nathan 76.4% · guest 23.6%
Sharpest disagreement ▶ 2:44 Brian rejects Nathan's iPaaS comparison

Brian directly reframes Nathan's suggestion that ProcessMaker is like Zapier or SnapLogic, explaining the distinct nature of BPM approval workflows.

 Hardest push from Nathan ▶ 15:29 Nathan challenges conservative growth critique

Nathan pushes back on the claim that Brian is leaving money on the table, arguing that only aggressive VC investors push that narrative.

 Biggest teaching moment ▶ 2:44 Clarifying integration platforms vs workflow approval

Brian educates Nathan on why pure data integration tools fail at human approval steps and validations in enterprise workflows.

 Nathan holds their own ▶ 11:11 Nathan estimates revenue from public benchmarks

Nathan displays deep expertise by citing historical Inc. 5000 revenue numbers and growth rates to estimate ProcessMaker's current ARR near $10M.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
ProcessMaker Overview and Core Workflow Functionality 6532 Nathan categorizes the company alongside iPaaS tools like Zapier and Segment. Brian clarifies the technical nuance, explaining that ProcessMaker focuses on human approval workflows rather than simple API plumbing.
Hybrid Delivery Model and Contract Values 5213 Nathan probes how on-premise deployments affect the balance sheet and revenue predictability, asking Brian to clarify contract sizes and the timeline of their pivot.
Buying Out Early Investors and Cap Table Cleanup 6314 Nathan presses into why the cap table was cluttered and how Brian managed to buy out early friends and family investors without giving away exact confidential M&A transaction terms.
Revenue Scale, Churn Rates, and Expansion Strategy 8223 Nathan demonstrates high domain knowledge by quickly cross-referencing Inc 5000 historical revenue data and calculating net churn and expansion revenue rates on the fly.
Customer Acquisition Cost and Capital Efficiency 7224 Nathan synthesizes Brian's CAC and payback period metrics, noting that aggressive venture-backed investors would likely push him to spend more to accelerate growth.
Future Exit Horizon and Venture Debt Perspective 5223 Nathan explores hypothetical acquisition valuations and venture debt financing, while Brian articulates his rationale for remaining debt-free and patient.

Statements from this episode (12)

Opinion
Reale: iPaaS tools like Zapier struggle with human approval workflows
“Those kinds of companies won't do very well with the approval and rejection part of a workflow.”
Brian Reale Jul 23, 2018 ▶ 3:18
Disclosure
ProcessMaker ACV is roughly $25,000 to $30,000 excluding professional services
“25, 30 grand would be kind of average contract value for us. And that doesn't include potentially professional services, which might be done by us or by partners around the world.”
Brian Reale Jul 23, 2018 ▶ 4:50
Assertion Supported
Bootstrapped ProcessMaker employs approximately 140 people worldwide as of 2018
“We're bootstrapped. Yeah. So today we're about a hundred and three, a 140 employees worldwide.”
Brian Reale Jul 23, 2018 ▶ 6:09
Disclosure
ProcessMaker serves around 350 global enterprise and mid-market customers
“So today around 350 customers really around the world enterprise mid-market customers.”
Brian Reale Jul 23, 2018 ▶ 7:54
Disclosure
ProcessMaker grows its subscription business 30% to 35% annually
“So we grow our subscription business around 30, 35% a year.”
Brian Reale Jul 23, 2018 ▶ 8:07
Disclosure
Reale: ProcessMaker bought around 15 entities off its cap table
“Yeah, like 15.”
Brian Reale Jul 23, 2018 ▶ 10:29
Disclosure
ProcessMaker operates with five total entities on its cap table
“Really three and yeah, well, three and then a few, five in total.”
Brian Reale Jul 23, 2018 ▶ 10:51
Insight
Reale: Workflow automation software does not work well for SMBs
“Looking at the kind of SMB or even smaller businesses realize that doesn't really work for this genre of product.”
Brian Reale Jul 23, 2018 ▶ 12:13
Assertion Not checkable as stated
Reale: ProcessMaker's annual gross churn without upsells is about 12%
“So churn, I think for us, sort of that top level churn without the upsells it's about 12% annually.”
Brian Reale Jul 23, 2018 ▶ 12:32
Assertion Not checkable as stated
Reale: ProcessMaker is approaching zero to negative net churn with upsells
“And then we're, you know, approaching that sort of kind of zero to negative percent churn with the upsells, but we think we can drive a lot more there.”
Brian Reale Jul 23, 2018 ▶ 12:58
Disclosure
ProcessMaker targets under 12-month CAC payback period
“We actually optimize it for that, that first year. And meaning, you know, when we sell the when we sell it, we'd like to see payback pretty immediately. So I would say even, even less than that.”
Brian Reale Jul 23, 2018 ▶ 13:40
Insight
Reale: Bootstrapped founders must prioritize risk mitigation over maximizing growth
“And when it's when you're bootstrapping, I think you tend to kind of lean towards mitigating risk because that could quickly throw your formula out of whack.”
Brian Reale Jul 23, 2018 ▶ 15:22
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