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Mar 5, 2016 · 20m · top-founders

He's 32 and raised $136m in Funding But It's About More Than That with Josh Reeves EP 186:

Josh Reeves · 12m 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, host Nathan Latka interviews Gusto co-founder and CEO Josh Reeves on scaling an HR and payroll software platform to 25,000 customers, managing $136 million in funding, and maintaining sustainable, human-centric leadership.

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 35.7% of the talking time here. How this is scored →

Nathan as informed peer 2.8 Guest teaching 2.3 Guest disagreement 0.8 Nathan pushing back 2.3
05100:0010:0020:001:47–4:24 · Nathan as informed peer 2/10 Founding Unwrap and Learning from Acquisition Latka probes into the financial details of Reeves's first startup acquisition, repeatedly asking for specific valuation numbers. Reeves politefully but firmly sidesteps the disclosure by pivoting to how the proceeds funded his brother's tuition.4:25–9:23 · Nathan as informed peer 4/10 Gusto's Mission, Automation, and SaaS Pricing Latka digs into Gusto's business model, conversion rates, and SaaS tier pricing. Reeves cooperatively shares metric benchmarks including a 98% conversion rate from free trial to paid subscription.9:23–14:33 · Nathan as informed peer 4/10 Fundraising Strategy, Office Expansion, and Mentorship The conversation covers Gusto's fundraising mechanics and expansion to Denver. Latka connects the discussion to past guest insights from Hiten Shah and Tim Draper while Reeves outlines his angel-heavy seed strategy.14:34–19:54 · Nathan as informed peer 1/10 Host Announcements, Heyo Exit, and Webinar Promo Following a solo promotional midroll by Latka, the show moves into the rapid-fire Famous Five. Reeves politely corrects Latka's inaccurate description of his favorite business book.1:47–4:24 · Guest teaching 1/10 Founding Unwrap and Learning from Acquisition Latka probes into the financial details of Reeves's first startup acquisition, repeatedly asking for specific valuation numbers. Reeves politefully but firmly sidesteps the disclosure by pivoting to how the proceeds funded his brother's tuition.4:25–9:23 · Guest teaching 2/10 Gusto's Mission, Automation, and SaaS Pricing Latka digs into Gusto's business model, conversion rates, and SaaS tier pricing. Reeves cooperatively shares metric benchmarks including a 98% conversion rate from free trial to paid subscription.9:23–14:33 · Guest teaching 2/10 Fundraising Strategy, Office Expansion, and Mentorship The conversation covers Gusto's fundraising mechanics and expansion to Denver. Latka connects the discussion to past guest insights from Hiten Shah and Tim Draper while Reeves outlines his angel-heavy seed strategy.14:34–19:54 · Guest teaching 4/10 Host Announcements, Heyo Exit, and Webinar Promo Following a solo promotional midroll by Latka, the show moves into the rapid-fire Famous Five. Reeves politely corrects Latka's inaccurate description of his favorite business book.1:47–4:24 · Guest disagreement 2/10 Founding Unwrap and Learning from Acquisition Latka probes into the financial details of Reeves's first startup acquisition, repeatedly asking for specific valuation numbers. Reeves politefully but firmly sidesteps the disclosure by pivoting to how the proceeds funded his brother's tuition.4:25–9:23 · Guest disagreement 0/10 Gusto's Mission, Automation, and SaaS Pricing Latka digs into Gusto's business model, conversion rates, and SaaS tier pricing. Reeves cooperatively shares metric benchmarks including a 98% conversion rate from free trial to paid subscription.9:23–14:33 · Guest disagreement 0/10 Fundraising Strategy, Office Expansion, and Mentorship The conversation covers Gusto's fundraising mechanics and expansion to Denver. Latka connects the discussion to past guest insights from Hiten Shah and Tim Draper while Reeves outlines his angel-heavy seed strategy.14:34–19:54 · Guest disagreement 1/10 Host Announcements, Heyo Exit, and Webinar Promo Following a solo promotional midroll by Latka, the show moves into the rapid-fire Famous Five. Reeves politely corrects Latka's inaccurate description of his favorite business book.1:47–4:24 · Nathan pushing back 4/10 Founding Unwrap and Learning from Acquisition Latka probes into the financial details of Reeves's first startup acquisition, repeatedly asking for specific valuation numbers. Reeves politefully but firmly sidesteps the disclosure by pivoting to how the proceeds funded his brother's tuition.4:25–9:23 · Nathan pushing back 2/10 Gusto's Mission, Automation, and SaaS Pricing Latka digs into Gusto's business model, conversion rates, and SaaS tier pricing. Reeves cooperatively shares metric benchmarks including a 98% conversion rate from free trial to paid subscription.9:23–14:33 · Nathan pushing back 2/10 Fundraising Strategy, Office Expansion, and Mentorship The conversation covers Gusto's fundraising mechanics and expansion to Denver. Latka connects the discussion to past guest insights from Hiten Shah and Tim Draper while Reeves outlines his angel-heavy seed strategy.14:34–19:54 · Nathan pushing back 1/10 Host Announcements, Heyo Exit, and Webinar Promo Following a solo promotional midroll by Latka, the show moves into the rapid-fire Famous Five. Reeves politely corrects Latka's inaccurate description of his favorite business book.

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

0:00 · Nathan 68.6% · guest 31.4%0:00 · Nathan 68.6% · guest 31.4%3:00 · Nathan 17.2% · guest 82.8%3:00 · Nathan 17.2% · guest 82.8%6:00 · Nathan 12.6% · guest 87.4%6:00 · Nathan 12.6% · guest 87.4%9:00 · Nathan 24% · guest 76%9:00 · Nathan 24% · guest 76%12:00 · Nathan 33% · guest 67%12:00 · Nathan 33% · guest 67%15:00 · Nathan 56.9% · guest 43.1%15:00 · Nathan 56.9% · guest 43.1%18:00 · Nathan 38.5% · guest 61.5%18:00 · Nathan 38.5% · guest 61.5%
Sharpest disagreement ▶ 3:54 Polite refusal to reveal exit numbers

Reeves refuses to bite on Latka's attempt to bracket his exit price above or below five million dollars, offering a personal anecdote instead.

 Hardest push from Nathan ▶ 3:41 Pushing for acquisition valuation figures

Latka refuses to drop the question when Reeves declines to state financials, directly pressing whether the acquisition was above or below five million.

 Biggest teaching moment ▶ 16:29 Correcting book summary assumption

When Latka presents a completely inaccurate summary of 'The Monk and the Riddle', Reeves directly corrects him on the core thesis of the book.

 Nathan holds their own ▶ 9:23 Connecting SaaS funding strategy to industry context

Latka frames Gusto's funding choices against broader SaaS venture paradigms, citing discussions with other prominent SaaS founders like Hiten Shah.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Founding Unwrap and Learning from Acquisition 2124 Latka probes into the financial details of Reeves's first startup acquisition, repeatedly asking for specific valuation numbers. Reeves politefully but firmly sidesteps the disclosure by pivoting to how the proceeds funded his brother's tuition.
Gusto's Mission, Automation, and SaaS Pricing 4202 Latka digs into Gusto's business model, conversion rates, and SaaS tier pricing. Reeves cooperatively shares metric benchmarks including a 98% conversion rate from free trial to paid subscription.
Fundraising Strategy, Office Expansion, and Mentorship 4202 The conversation covers Gusto's fundraising mechanics and expansion to Denver. Latka connects the discussion to past guest insights from Hiten Shah and Tim Draper while Reeves outlines his angel-heavy seed strategy.
Host Announcements, Heyo Exit, and Webinar Promo 1411 Following a solo promotional midroll by Latka, the show moves into the rapid-fire Famous Five. Reeves politely corrects Latka's inaccurate description of his favorite business book.

Statements from this episode (8)

Assertion Not checkable as stated
Reeves: Unwrap generated thousands daily and reached 40M users
“You know, we were making a few thousand dollars a day in ad revenue. When we got started, we had over forty million users”
Josh Reeves Mar 5, 2016 ▶ 3:00
Assertion Supported
Reeves: One-third of US businesses get fined annually for payroll tax errors
“Of the six million companies in the U S every year, about a third of companies get fined for incorrectly doing their payroll taxes.”
Josh Reeves Mar 5, 2016 ▶ 5:18
Assertion Not checkable as stated
Reeves: Gusto serves over 25,000 paid small business customers across America
“We have now over 25,000 small businesses spread across the country over half a percent of all employers in America using the product, partnering with us.”
Josh Reeves Mar 5, 2016 ▶ 7:08
Assertion Not checkable as stated
Reeves: Over 98% of Gusto free-trial users convert to paying customers
“So we give folks a one or two month free trial when they start and over 98% convert from the free trial to being a paid customer.”
Josh Reeves Mar 5, 2016 ▶ 7:25
Disclosure
Reeves: Gusto raised a $50M insider round, totaling $136M raised
“Yeah, we did a kind of an insider round, fifty million dollars, but the company in aggregate has raised about one hundred and thirty six million.”
Josh Reeves Mar 5, 2016 ▶ 9:38
Disclosure
Reeves: Gusto had $50M in the bank before its insider round
“We still had fifty million in the bank in December, and basically some of our existing investors were really excited about how we were doing, and were interested in putting in additional capital, and so we basically set terms and then welcomed them in as incre…”
Josh Reeves Mar 5, 2016 ▶ 9:47
Disclosure
Reeves: Gusto rejected all VCs in seed round, raised from 20 CEOs
“And so our seed round, which we did in 2012, we actually had several different VC firms offer, and we actually declined all VC firms. We did a seed round with about 20 CEOs, and it was all individuals. And today, We've done that in every round. We have about 7…”
Josh Reeves Mar 5, 2016 ▶ 12:09
Disclosure
Reeves: Gusto gives employees a free worldwide plane ticket after one year
“At Gusto, we actually give everyone on their one-year anniversary a free plane ticket anywhere in the world. That expires on their second year anniversary specifically for this reason.”
Josh Reeves Mar 5, 2016 ▶ 19:40
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