StarZero All shows Try the podcast clipper →

Apr 9, 2018 · 18m · top-founders

989 How This CEO Split His Company and Cleaned Cap Table At Same Time

John Younger · 9m spoken Nathan Latka · 6m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top Entrepreneurs Podcast, host Nathan Latka interviews serial entrepreneur John Younger, CEO of HireMojo, on how he split his recruitment company, cleanly restructured a complex cap table into common equity, and scaled a bootstrapped software business to $200,000 in monthly recurring revenue.

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 4.4 Guest teaching 2.6 Guest disagreement 1.4 Nathan pushing back 3.2
05100:0010:002:26–6:01 · Nathan as informed peer 4/10 The Founding, Growth, and Crises of Accolo Latka pushes the pacing along to focus on Younger's current venture, rapidly asking for specific metrics like capital raised and sale valuations. Younger cooperatively recounts the history and survival of Accolo through the 2008 downturn.6:01–8:38 · Nathan as informed peer 5/10 Splitting Accolo and Cleaning the Cap Table Younger details his unconventional cap table restructuring that replaced preferred shares and warrants with notes to flatten the cap table. Latka pushes back sceptically, questioning why any investor would agree to surrender preferred rights.8:41–13:56 · Nathan as informed peer 5/10 Sponsor Break: Nathan Latka on Hotjar After an ad break, Latka interrupts Younger's high-level social impact explanation to demand specific pricing metrics and subscription mechanics. Younger explains the mojo points model and corrects Latka's MRR arithmetic upwards to around $200k.13:57–16:03 · Nathan as informed peer 6/10 Unit Economics, Customer Acquisition, and Revenue Growth Latka demonstrates strong mastery of SaaS metrics, instantly calculating payback periods based on a $1,700 CAC against a $20,000 ACV. He questions why Younger isn't ramping up acquisition spend more aggressively given the near-instant payback.16:05–17:42 · Nathan as informed peer 2/10 The Famous Five Rapid-Fire Questions Latka runs through the standard Famous Five rapid-fire questions smoothly. He briefly pushes Younger to name an online tool other than his own product.2:26–6:01 · Guest teaching 2/10 The Founding, Growth, and Crises of Accolo Latka pushes the pacing along to focus on Younger's current venture, rapidly asking for specific metrics like capital raised and sale valuations. Younger cooperatively recounts the history and survival of Accolo through the 2008 downturn.6:01–8:38 · Guest teaching 5/10 Splitting Accolo and Cleaning the Cap Table Younger details his unconventional cap table restructuring that replaced preferred shares and warrants with notes to flatten the cap table. Latka pushes back sceptically, questioning why any investor would agree to surrender preferred rights.8:41–13:56 · Guest teaching 3/10 Sponsor Break: Nathan Latka on Hotjar After an ad break, Latka interrupts Younger's high-level social impact explanation to demand specific pricing metrics and subscription mechanics. Younger explains the mojo points model and corrects Latka's MRR arithmetic upwards to around $200k.13:57–16:03 · Guest teaching 2/10 Unit Economics, Customer Acquisition, and Revenue Growth Latka demonstrates strong mastery of SaaS metrics, instantly calculating payback periods based on a $1,700 CAC against a $20,000 ACV. He questions why Younger isn't ramping up acquisition spend more aggressively given the near-instant payback.16:05–17:42 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions Latka runs through the standard Famous Five rapid-fire questions smoothly. He briefly pushes Younger to name an online tool other than his own product.2:26–6:01 · Guest disagreement 1/10 The Founding, Growth, and Crises of Accolo Latka pushes the pacing along to focus on Younger's current venture, rapidly asking for specific metrics like capital raised and sale valuations. Younger cooperatively recounts the history and survival of Accolo through the 2008 downturn.6:01–8:38 · Guest disagreement 2/10 Splitting Accolo and Cleaning the Cap Table Younger details his unconventional cap table restructuring that replaced preferred shares and warrants with notes to flatten the cap table. Latka pushes back sceptically, questioning why any investor would agree to surrender preferred rights.8:41–13:56 · Guest disagreement 2/10 Sponsor Break: Nathan Latka on Hotjar After an ad break, Latka interrupts Younger's high-level social impact explanation to demand specific pricing metrics and subscription mechanics. Younger explains the mojo points model and corrects Latka's MRR arithmetic upwards to around $200k.13:57–16:03 · Guest disagreement 1/10 Unit Economics, Customer Acquisition, and Revenue Growth Latka demonstrates strong mastery of SaaS metrics, instantly calculating payback periods based on a $1,700 CAC against a $20,000 ACV. He questions why Younger isn't ramping up acquisition spend more aggressively given the near-instant payback.16:05–17:42 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions Latka runs through the standard Famous Five rapid-fire questions smoothly. He briefly pushes Younger to name an online tool other than his own product.2:26–6:01 · Nathan pushing back 3/10 The Founding, Growth, and Crises of Accolo Latka pushes the pacing along to focus on Younger's current venture, rapidly asking for specific metrics like capital raised and sale valuations. Younger cooperatively recounts the history and survival of Accolo through the 2008 downturn.6:01–8:38 · Nathan pushing back 4/10 Splitting Accolo and Cleaning the Cap Table Younger details his unconventional cap table restructuring that replaced preferred shares and warrants with notes to flatten the cap table. Latka pushes back sceptically, questioning why any investor would agree to surrender preferred rights.8:41–13:56 · Nathan pushing back 4/10 Sponsor Break: Nathan Latka on Hotjar After an ad break, Latka interrupts Younger's high-level social impact explanation to demand specific pricing metrics and subscription mechanics. Younger explains the mojo points model and corrects Latka's MRR arithmetic upwards to around $200k.13:57–16:03 · Nathan pushing back 3/10 Unit Economics, Customer Acquisition, and Revenue Growth Latka demonstrates strong mastery of SaaS metrics, instantly calculating payback periods based on a $1,700 CAC against a $20,000 ACV. He questions why Younger isn't ramping up acquisition spend more aggressively given the near-instant payback.16:05–17:42 · Nathan pushing back 2/10 The Famous Five Rapid-Fire Questions Latka runs through the standard Famous Five rapid-fire questions smoothly. He briefly pushes Younger to name an online tool other than his own product.

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

0:00 · Nathan 51.8% · guest 48.2%0:00 · Nathan 51.8% · guest 48.2%3:00 · Nathan 8% · guest 92%3:00 · Nathan 8% · guest 92%6:00 · Nathan 26% · guest 74%6:00 · Nathan 26% · guest 74%9:00 · Nathan 36.6% · guest 63.4%9:00 · Nathan 36.6% · guest 63.4%12:00 · Nathan 60% · guest 40%12:00 · Nathan 60% · guest 40%15:00 · Nathan 35.3% · guest 64.7%15:00 · Nathan 35.3% · guest 64.7%18:00 · Nathan 100% · guest 0%18:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 9:55 Younger pushes back on question order

When Latka asks directly about pricing models, Younger refuses the framing immediately, insisting on explaining the product's function before discussing the business model.

 Hardest push from Nathan ▶ 8:22 Latka interrogates cap table investor concession

Latka directly challenges Younger on why institutional investors would agree to convert preferred shares and lose governance rights for promissory notes.

 Biggest teaching moment ▶ 7:01 Younger explains the tax-neutral cap table split mechanism

Younger educates Latka on an intricate corporate engineering strategy involving promissory note assumption and common share conversions to split an RPO business.

 Nathan holds their own ▶ 14:37 Latka diagnoses unit economics and questions growth strategy

Latka rapidly calculates that Younger's $1,700 CAC on a $20,000 annual contract yields an immediate one-month payback, using SaaS expertise to challenge the founder's growth aggression.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
The Founding, Growth, and Crises of Accolo 4213 Latka pushes the pacing along to focus on Younger's current venture, rapidly asking for specific metrics like capital raised and sale valuations. Younger cooperatively recounts the history and survival of Accolo through the 2008 downturn.
Splitting Accolo and Cleaning the Cap Table 5524 Younger details his unconventional cap table restructuring that replaced preferred shares and warrants with notes to flatten the cap table. Latka pushes back sceptically, questioning why any investor would agree to surrender preferred rights.
Sponsor Break: Nathan Latka on Hotjar 5324 After an ad break, Latka interrupts Younger's high-level social impact explanation to demand specific pricing metrics and subscription mechanics. Younger explains the mojo points model and corrects Latka's MRR arithmetic upwards to around $200k.
Unit Economics, Customer Acquisition, and Revenue Growth 6213 Latka demonstrates strong mastery of SaaS metrics, instantly calculating payback periods based on a $1,700 CAC against a $20,000 ACV. He questions why Younger isn't ramping up acquisition spend more aggressively given the near-instant payback.
The Famous Five Rapid-Fire Questions 2112 Latka runs through the standard Famous Five rapid-fire questions smoothly. He briefly pushes Younger to name an online tool other than his own product.

Statements from this episode (8)

Assertion Not checkable as stated
Younger: Ynet sold to TriNet for roughly $4 million in stock
“It was probably pushing four million dollars, something like that.”
John Younger Apr 9, 2018 ▶ 2:21
Assertion Not checkable as stated
Younger: Accolo raised $4M in 2007 and reached $2M/quarter
“Raised money in 2007. Nathan Latka: How much? John Younger: About four million. And we ended up getting to a place where we're hitting about two million a quarter and growing quickly right when the bubble burst in 2008, 2009.”
John Younger Apr 9, 2018 ▶ 5:08
Assertion Not checkable as stated
Younger: Accolo Generated $8M–$9M Annually Before HireMojo Spinout
“It was, yeah, eight, nine million, something like that. We had caught our way back.”
John Younger Apr 9, 2018 ▶ 6:51
Assertion Not checkable as stated
Younger details restructuring Accolo's preferred shares into common via notes
“So to do that, we issued notes to the preferred shareholders and the warrant holders. So that created a note and transferred their stock to all common. And then the new company was created by assuming some portion of those preferred notes. So the acquiring com…”
John Younger Apr 9, 2018 ▶ 7:34
Assertion Not checkable as stated
Younger: HireMojo's annual renewal rate exceeds 90 percent
“Our level of renewals is north of 90%.”
John Younger Apr 9, 2018 ▶ 12:44
Assertion Not checkable as stated
Younger: HireMojo generates approximately $200,000 in monthly recurring revenue
“Yeah, it's probably closer to two.”
John Younger Apr 9, 2018 ▶ 13:22
Assertion Not checkable as stated
Younger: HireMojo's customer acquisition cost is approximately $1,700
“Right now, it's about 1700 bucks.”
John Younger Apr 9, 2018 ▶ 14:13
Assertion Not checkable as stated
Younger: HireMojo's revenue consistently grows 8% to 12% month-over-month
“Well, we've been growing eight to 12% a month to give you a sense pretty consistently.”
John Younger Apr 9, 2018 ▶ 15:18
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more