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Apr 1, 2017 · 20m · top-founders

EP 616: His Coffee Shops Do $1.8M But His Crowdfunding Platform is More Impressive With $550k 2016 Revenue on 486 Projects With $2.5M Funded with CEO McCabe Callahan

McCabe Callahan · 10m spoken Nathan Latka · 7m spoken
0:00 / 0:00

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

Host Nathan Latka interviews entrepreneur McCabe Callahan, who discusses restructuring his coffee shop chain after managing heavy debt and building Community Funded into a thriving SaaS crowdfunding platform for universities.

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 41.6% of the talking time here. How this is scored →

Nathan as informed peer 4.6 Guest teaching 2.2 Guest disagreement 0.8 Nathan pushing back 2.2
05100:0010:0020:002:29–7:23 · Nathan as informed peer 5/10 Scaling and Downsizing Mugs Coffee Lounge Latka investigates Callahan's early coffee shop venture, pressing into debt levels and financing specifics. Callahan openly shares his early mistakes with high-interest non-traditional debt and gently reframes Latka's comment about the recession by noting coffee is recession-proof.7:25–10:43 · Nathan as informed peer 3/10 The Origin Story of Community Funded Callahan narrates how customer support for his coffee expansion inspired Community Funded following a loan rejection. Latka steers the conversation with personal and conversational questions, keeping the dialogue smooth and friendly.10:45–14:42 · Nathan as informed peer 6/10 Community Funded's SaaS Model and Higher Ed Focus Latka drills into Community Funded's financing structures, pricing rounds, and SaaS enterprise subscription mechanics. Callahan outlines their university focus, annual contracts, and upfront implementation fees.14:42–17:15 · Nathan as informed peer 5/10 2016 Financial Performance and 2017 Projections Latka extracts key platform metrics including 2016 revenue and total GMV, quickly synthesizing the doubling projection for 2017. Callahan provides transparent financial numbers while highlighting institutional adoption challenges.17:16–19:08 · Nathan as informed peer 4/10 The Famous Five Rapid-Fire Questions The rapid-fire Famous Five round runs without friction as Callahan gives concise answers and Latka delivers a clean summary outro of the business story.2:29–7:23 · Guest teaching 3/10 Scaling and Downsizing Mugs Coffee Lounge Latka investigates Callahan's early coffee shop venture, pressing into debt levels and financing specifics. Callahan openly shares his early mistakes with high-interest non-traditional debt and gently reframes Latka's comment about the recession by noting coffee is recession-proof.7:25–10:43 · Guest teaching 2/10 The Origin Story of Community Funded Callahan narrates how customer support for his coffee expansion inspired Community Funded following a loan rejection. Latka steers the conversation with personal and conversational questions, keeping the dialogue smooth and friendly.10:45–14:42 · Guest teaching 3/10 Community Funded's SaaS Model and Higher Ed Focus Latka drills into Community Funded's financing structures, pricing rounds, and SaaS enterprise subscription mechanics. Callahan outlines their university focus, annual contracts, and upfront implementation fees.14:42–17:15 · Guest teaching 2/10 2016 Financial Performance and 2017 Projections Latka extracts key platform metrics including 2016 revenue and total GMV, quickly synthesizing the doubling projection for 2017. Callahan provides transparent financial numbers while highlighting institutional adoption challenges.17:16–19:08 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions The rapid-fire Famous Five round runs without friction as Callahan gives concise answers and Latka delivers a clean summary outro of the business story.2:29–7:23 · Guest disagreement 1/10 Scaling and Downsizing Mugs Coffee Lounge Latka investigates Callahan's early coffee shop venture, pressing into debt levels and financing specifics. Callahan openly shares his early mistakes with high-interest non-traditional debt and gently reframes Latka's comment about the recession by noting coffee is recession-proof.7:25–10:43 · Guest disagreement 1/10 The Origin Story of Community Funded Callahan narrates how customer support for his coffee expansion inspired Community Funded following a loan rejection. Latka steers the conversation with personal and conversational questions, keeping the dialogue smooth and friendly.10:45–14:42 · Guest disagreement 1/10 Community Funded's SaaS Model and Higher Ed Focus Latka drills into Community Funded's financing structures, pricing rounds, and SaaS enterprise subscription mechanics. Callahan outlines their university focus, annual contracts, and upfront implementation fees.14:42–17:15 · Guest disagreement 1/10 2016 Financial Performance and 2017 Projections Latka extracts key platform metrics including 2016 revenue and total GMV, quickly synthesizing the doubling projection for 2017. Callahan provides transparent financial numbers while highlighting institutional adoption challenges.17:16–19:08 · Guest disagreement 0/10 The Famous Five Rapid-Fire Questions The rapid-fire Famous Five round runs without friction as Callahan gives concise answers and Latka delivers a clean summary outro of the business story.2:29–7:23 · Nathan pushing back 3/10 Scaling and Downsizing Mugs Coffee Lounge Latka investigates Callahan's early coffee shop venture, pressing into debt levels and financing specifics. Callahan openly shares his early mistakes with high-interest non-traditional debt and gently reframes Latka's comment about the recession by noting coffee is recession-proof.7:25–10:43 · Nathan pushing back 2/10 The Origin Story of Community Funded Callahan narrates how customer support for his coffee expansion inspired Community Funded following a loan rejection. Latka steers the conversation with personal and conversational questions, keeping the dialogue smooth and friendly.10:45–14:42 · Nathan pushing back 3/10 Community Funded's SaaS Model and Higher Ed Focus Latka drills into Community Funded's financing structures, pricing rounds, and SaaS enterprise subscription mechanics. Callahan outlines their university focus, annual contracts, and upfront implementation fees.14:42–17:15 · Nathan pushing back 2/10 2016 Financial Performance and 2017 Projections Latka extracts key platform metrics including 2016 revenue and total GMV, quickly synthesizing the doubling projection for 2017. Callahan provides transparent financial numbers while highlighting institutional adoption challenges.17:16–19:08 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions The rapid-fire Famous Five round runs without friction as Callahan gives concise answers and Latka delivers a clean summary outro of the business story.

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

0:00 · Nathan 74.1% · guest 25.9%0:00 · Nathan 74.1% · guest 25.9%3:00 · Nathan 19.8% · guest 80.2%3:00 · Nathan 19.8% · guest 80.2%6:00 · Nathan 19.1% · guest 80.9%6:00 · Nathan 19.1% · guest 80.9%9:00 · Nathan 17.6% · guest 82.4%9:00 · Nathan 17.6% · guest 82.4%12:00 · Nathan 16.1% · guest 83.9%12:00 · Nathan 16.1% · guest 83.9%15:00 · Nathan 55.8% · guest 44.2%15:00 · Nathan 55.8% · guest 44.2%18:00 · Nathan 97.7% · guest 2.3%18:00 · Nathan 97.7% · guest 2.3%
Sharpest disagreement ▶ 6:45 Recession-proof industry counter

Callahan playfully contradicts Latka's premise about getting lucky before the recession by asserting that coffee and alcohol are fundamentally recession-proof businesses.

 Hardest push from Nathan ▶ 6:04 Probing hard money loan terms

Latka pushes past Callahan's general mention of non-traditional financing to specifically pin down whether he was paying predatory 15-16% hard money rates.

 Biggest teaching moment ▶ 11:49 Enterprise higher ed business model

Callahan educates Latka on their enterprise monetization, clarifying that rather than taking a percentage cut, they charge 5k-10k onboarding fees and 12k-25k annual software licenses.

 Nathan holds their own ▶ 11:32 Categorizing equity rounds

Latka quickly analyzes Callahan's fundraising details to determine whether the capital was raised on convertible notes or priced equity rounds.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Scaling and Downsizing Mugs Coffee Lounge 5313 Latka investigates Callahan's early coffee shop venture, pressing into debt levels and financing specifics. Callahan openly shares his early mistakes with high-interest non-traditional debt and gently reframes Latka's comment about the recession by noting coffee is recession-proof.
The Origin Story of Community Funded 3212 Callahan narrates how customer support for his coffee expansion inspired Community Funded following a loan rejection. Latka steers the conversation with personal and conversational questions, keeping the dialogue smooth and friendly.
Community Funded's SaaS Model and Higher Ed Focus 6313 Latka drills into Community Funded's financing structures, pricing rounds, and SaaS enterprise subscription mechanics. Callahan outlines their university focus, annual contracts, and upfront implementation fees.
2016 Financial Performance and 2017 Projections 5212 Latka extracts key platform metrics including 2016 revenue and total GMV, quickly synthesizing the doubling projection for 2017. Callahan provides transparent financial numbers while highlighting institutional adoption challenges.
The Famous Five Rapid-Fire Questions 4101 The rapid-fire Famous Five round runs without friction as Callahan gives concise answers and Latka delivers a clean summary outro of the business story.

Statements from this episode (12)

Disclosure
McCabe Callahan operated five coffee shops and a bar by age 24
“By the time I was 24, I had five coffee shops and a bar rolling in this area.”
McCabe Callahan Apr 1, 2017 ▶ 4:04
Disclosure
Callahan: Coffee and bar ventures generated $1.8M revenue in 2006-2007
“I was doing about 1.8 million at one point back in 2006, seven, when I had all of it going”
McCabe Callahan Apr 1, 2017 ▶ 4:23
Disclosure
Callahan carried up to $700k in debt in his mid-20s
“At 24, 25 years old, I was probably sitting on 650 to 700,000 dollars in debt and not making very much money at all.”
McCabe Callahan Apr 1, 2017 ▶ 5:33
Insight
Callahan: Coffee and alcohol are two recession-proof businesses
“Coffee, alcohol, man. Those are the two recession proof businesses.”
McCabe Callahan Apr 1, 2017 ▶ 6:50
Disclosure
Callahan's two coffee shops generated $1.3M in 2016 revenue
“I'm doing about 1.3 million in sales between two shops now. Nathan Latka: That's great. And it's really just, McCabe Callahan: That was last year's revenue.”
McCabe Callahan Apr 1, 2017 ▶ 7:14
Assertion Supported
Callahan: Regular customers pooled funds to open second Mugs Coffee location
“I had given up. I was not going to expand. I was just going to focus on my singular shop. And I was telling my story to one of my customers that came in on a regular basis. And he basically said, well, I want to see another mugs in town. I'll chip in some mone…”
McCabe Callahan Apr 1, 2017 ▶ 9:38
Disclosure
Callahan: Community Funded raised $475K seed followed by $1.81M round
“So the first round was for four and 75,000 dollars to build the product and get our first customers effectively did that. And when we had customers signing up in the university space, higher education we decided to raise another round early scale. We knew our …”
McCabe Callahan Apr 1, 2017 ▶ 11:05
Disclosure
Callahan: Community Funded charges $5K-$10K implementation plus $12K-$25K annually
“Yeah, so right now, specifically in this market of higher education and healthcare, we have an implementation fee typically ranges between five and 10,000 dollars, and then we'll typically have an annual subscription that ranges between 12 and 25,000, dependin…”
McCabe Callahan Apr 1, 2017 ▶ 12:38
Disclosure
Callahan: Community Funded serves 30 universities including Penn State and Illinois
“So we're serving 30 higher education institutions, including some really reputable names like Texas State University and University of Illinois. Penn State is another one, Colorado State University.”
McCabe Callahan Apr 1, 2017 ▶ 13:16
Prediction Not checkable as stated
Callahan: Community Funded projects $1.2M in 2017 revenue
“Right now we're projecting 1.2 million dollars in revenue this year.”
McCabe Callahan Apr 1, 2017 ▶ 14:55
Assertion Not checkable as stated
Community Funded facilitated $2.5M across 460 crowdfunding projects in 2016
“2016 for, you know, just over about 460 projects, we ended up raising about two and a half million dollars.”
McCabe Callahan Apr 1, 2017 ▶ 15:55
Assertion Not checkable as stated
Callahan: Community Funded generated $550k in 2016 revenue
“Oh, 550,000.”
McCabe Callahan Apr 1, 2017 ▶ 16:04
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