Jan 22, 2017 · 28m · top-founders
EP 547: Handshake.com Raises $24M, Helping 1000+ Customers Manage Store Product Purchasing with CEO Glen Coates
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In this episode of The Top Podcast, host Nathan Latka interviews Glenn Coates, CEO of Handshake, to discuss how the company raised $24 million and scaled to over 1,000 customers by modernizing B2B wholesale ordering. Coates breaks down Handshake's SaaS unit economics, disciplined 12-to-18-month payback targets, upmarket churn mitigation, and long-term vision for enterprise commerce.
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 32.9% of the talking time here. How this is scored →
Nathan as informed peer 4.3 Guest teaching 2.0 Guest disagreement 2.0 Nathan pushing back 3.8
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 23:33 Firm rejection of hypothetical $120M exit
Glenn immediately and flatly turns down a hypothetical $120M buyout offer from Amazon and defends his decision when challenged.
Hardest push from Nathan ▶ 23:33 Host calls out guest on valuation claimsNathan aggressively challenges Glenn's refusal of the acquisition offer, bluntly calling him out and demanding to see the math behind his valuation.
Biggest teaching moment ▶ 14:11 Reframing LTV to payback periodGlenn redirects Nathan's question away from LTV to explain how payback periods and rep ramp times dictate cash efficiency in SaaS growth.
Nathan holds their own ▶ 8:27 Pinning down MRR from Series B stage benchmarksWhen Glenn declines to share exact revenue, Nathan leverages standard venture benchmarks around $10M ARR to corner Glenn into confirming an $800k MRR estimate.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Weekly Giveaway Winner Announcement and Entry Details | 4 | 1 | 1 | 2 | Nathan introduces the show, does housekeeping, and welcomes Glenn Coates before asking about Handshake's core business model. Glenn collaboratively explains how Handshake digitizes wholesale ordering and replaces legacy pen-and-paper catalogs. | |
| Founding History, Customer Milestones, and Tiered Pricing Structure | 5 | 2 | 1 | 4 | Nathan presses Glenn on early revenue figures, active customer count vs users, and pricing tiers. Glenn answers transparently regarding customer count and the shift from SMB contracts to enterprise tiers. | |
| Revenue Scale, SaaS Stage Classifications, and $24M Funding | 6 | 2 | 3 | 6 | When Glenn declines to share exact MRR figures, Nathan uses Series B SaaS industry benchmarks around $10M ARR to estimate around $800k monthly recurring revenue, which Glenn acknowledges in terms of order of magnitude. | |
| Engineering Platform Complexity and In-House Studio Setup | 4 | 2 | 3 | 5 | Nathan teases Glenn about raising another round or entertaining acquisition talks, demanding he look him in the eye. Glenn pushes back playfully and breaks down the technical engineering platform and head count. | |
| Payback Periods, Growth Targets, and Fiscal SaaS Economics | 6 | 6 | 3 | 5 | Glenn educates Nathan on why payback period is far more critical than LTV for growth-stage SaaS economics, detailing how sales rep ramp periods impact cash efficiency. Nathan pushes back by highlighting upfront annual contract cash flows. | |
| Cash Runway Management and Fundraising Strategy Cycles | 6 | 3 | 4 | 7 | Nathan inquires about burn rate, runway, and churn before asking if Glenn would accept a $120M acquisition offer from Amazon. When Glenn says no, Nathan calls him out bluntly, prompting Glenn to defend his enterprise valuation thesis. | |
| Sponsor Feature: Acuity Scheduling Efficiency and Extended Trial Offer | 3 | 0 | 1 | 1 | Nathan delivers a mid-roll sponsor read for Acuity Scheduling and moves into the rapid-fire Famous Five section, which Glenn answers smoothly and candidly. | |
| Episode Synthesis, Metric Recapitulation, and Guest Farewell | 0 | 0 | 0 | 0 | A solo host monologue wrapping up the interview, summarizing key metrics from Handshake, and previewing the next episode. |
Statements from this episode (15)
Coates: Upstream B2B retail supply chains remain reliant on pen and paper
“The world that you and I are in, where we get to order things really easily, that world, one step back in the supply chain is totally broken, and it's all pen and paper and phone, fax, email.”
Handshake served over 1,000 paying business customers as of late 2016
“Yeah, so we work with over a thousand companies today out there in the market in, in different industries.”
Coates: Handshake does not charge per-transaction fees or take sales cuts
“We don't have what you would think of as like we're not inside the transaction. If that, if that's what you mean, we don't charge a per transaction fee. We don't take a cut like that.”
Coates: Handshake is operating near $10M in ARR
“So most, a lot of growth stage investors talk about like kind of ten million in ARR as being, you know, where they kind of Find their sweet spot. And you know, we're in that kind of scale, right?”
Handshake transitioned to strictly annual customer contracts in late 2015
“We used to have monthly contracts. We sort of sunset those about a year ago now. And we let some of the companies that were on those monthly contracts from kind of back in the day stay on them as a kind of good guy. You know, kind of a good guy. Yeah. We kind …”
Coates: Handshake raised $23.5M across seed, Series A, and Series B
“That was including our Series B. So the three rounds that we raised were a one and a half million dollar seed round, an eight million dollar Series A, and then a fourteen million dollar Series B.”
Coates breaks down Handshake's 70-person team across product, sales, and success
“The product and engineering group is I think it's probably 20 people, give or take, at this point, between design, engineering, product management, those kind of people. You know, sales teams, probably 20 people, something like that, you know, The service and …”
Coates: Customer acquisition payback period is the speed limit of SaaS growth
“What I think about, and what a lot of the SaaS the SaaS investors and, you know, the kind of people who are thinking really well about economics are thinking about payback period, right? Because that's the kind of speed limit on how fast you can grow and like …”
Coates: SaaS payback periods exceeding two years raise red flags for VCs
“Well, if you look at like what the market considers a red flag, I think if you talk to the venture community and the guys who really know this stuff, you know, they're going to flag a payback period. That's like greater than two years as, you know, probably a …”
Coates: Handshake targets a 12-to-18-month customer payback period
“Like right now, you know, trying to get it between a year and a year and a half is where I feel comfortable with the business.”
Coates: Each Handshake funding round was sized for two years of runway
“Usually we've raised for a couple of years. Like, that's been, like, we want to have, each time we've raised money, it's, like, bought us basically two years of runway.”
Coates: Plan fundraising at 12 months runway; pitch during the last six
“You really need to start thinking about run raising when you've got a year of runway, but like the real, like you're out there pounding the pavement stuff is probably when you're into the last six months.”
Coates: Handshake cut annualized gross customer churn from 40-50% to teens
“You know, and churn now has come down to, You know, I think we cut it down from, you know, an annualized rate in the range of, you know, 40 to 50% in some quarters. You know, it's down in the teens now heading towards, you know, the kind of gold standard you w…”
Coates: Handshake consistently maintains net negative revenue churn through seat expansion
“We're, we've always had net negative revenue churn because like the things for us is like, you know, they might buy a couple of sales rep licenses and then they can always add more sales rep licenses and that tends to happen. And then they might say, great, th…”