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Feb 23, 2016 · 21m · top-founders

How do You Sell for $90m with NO REVENUE?! EP 167

Eran Eyal · 11m 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

In episode 167 of 'The Top,' host Nathan Latka interviews serial entrepreneur Eran Eyal about his transition from brick-and-mortar retail to high-growth SaaS ventures, dissecting his past company exits and debating the market forces behind multi-million-dollar tech acquisitions.

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 37.6% of the talking time here. How this is scored →

Nathan as informed peer 3.6 Guest teaching 2.6 Guest disagreement 2.0 Nathan pushing back 2.6
05100:0010:0020:000:57–5:31 · Nathan as informed peer 4/10 Introducing Serial Entrepreneur Eran Eyal and Morning Banter Nathan probes Eran on the revenue and valuation mechanics of his first retail business eSquared. Eran gently corrects Nathan's assumption of a 1x top-line valuation multiple, noting retail concepts with franchise potential can fetch 3x to 4x.5:31–8:21 · Nathan as informed peer 3/10 Building and Selling Evely's Drag-and-Drop Crowdsourcing Platform Eran details the genesis of Evely, building a drag-and-drop crowdsourcing tool on Azure, and eventual acquisition by Incubator. The exchange is highly collaborative with Nathan adding context about Wix and crowdfunding.8:21–11:01 · Nathan as informed peer 4/10 Evely's Monetization Strategy and Peak Recurring Revenue Nathan drills into Evely's financial metrics, shifting from freemium to enterprise SaaS pricing. Eran reveals they reached 30 core enterprise accounts and peaked between $100k and $250k MRR.11:01–18:04 · Nathan as informed peer 6/10 Debating SaaS Multiples, Acqui-hires, and Enterprise Tech Valuations A vigorous debate unfolds over whether tech valuations strictly follow revenue multiples or depend on strategic IP and acqui-hires. Nathan insists anything beyond cash flow multiples is pure speculation, while Eran provides real-world examples like GoInstant's $75M sale to Salesforce with only one customer.18:04–19:05 · Nathan as informed peer 1/10 Episode Part One Conclusion and Eran's Contact Channels Nathan pauses the interview to split the conversation into two parts, asking Eran for contact channels and wrapping up part one smoothly.0:57–5:31 · Guest teaching 3/10 Introducing Serial Entrepreneur Eran Eyal and Morning Banter Nathan probes Eran on the revenue and valuation mechanics of his first retail business eSquared. Eran gently corrects Nathan's assumption of a 1x top-line valuation multiple, noting retail concepts with franchise potential can fetch 3x to 4x.5:31–8:21 · Guest teaching 1/10 Building and Selling Evely's Drag-and-Drop Crowdsourcing Platform Eran details the genesis of Evely, building a drag-and-drop crowdsourcing tool on Azure, and eventual acquisition by Incubator. The exchange is highly collaborative with Nathan adding context about Wix and crowdfunding.8:21–11:01 · Guest teaching 2/10 Evely's Monetization Strategy and Peak Recurring Revenue Nathan drills into Evely's financial metrics, shifting from freemium to enterprise SaaS pricing. Eran reveals they reached 30 core enterprise accounts and peaked between $100k and $250k MRR.11:01–18:04 · Guest teaching 6/10 Debating SaaS Multiples, Acqui-hires, and Enterprise Tech Valuations A vigorous debate unfolds over whether tech valuations strictly follow revenue multiples or depend on strategic IP and acqui-hires. Nathan insists anything beyond cash flow multiples is pure speculation, while Eran provides real-world examples like GoInstant's $75M sale to Salesforce with only one customer.18:04–19:05 · Guest teaching 1/10 Episode Part One Conclusion and Eran's Contact Channels Nathan pauses the interview to split the conversation into two parts, asking Eran for contact channels and wrapping up part one smoothly.0:57–5:31 · Guest disagreement 2/10 Introducing Serial Entrepreneur Eran Eyal and Morning Banter Nathan probes Eran on the revenue and valuation mechanics of his first retail business eSquared. Eran gently corrects Nathan's assumption of a 1x top-line valuation multiple, noting retail concepts with franchise potential can fetch 3x to 4x.5:31–8:21 · Guest disagreement 1/10 Building and Selling Evely's Drag-and-Drop Crowdsourcing Platform Eran details the genesis of Evely, building a drag-and-drop crowdsourcing tool on Azure, and eventual acquisition by Incubator. The exchange is highly collaborative with Nathan adding context about Wix and crowdfunding.8:21–11:01 · Guest disagreement 2/10 Evely's Monetization Strategy and Peak Recurring Revenue Nathan drills into Evely's financial metrics, shifting from freemium to enterprise SaaS pricing. Eran reveals they reached 30 core enterprise accounts and peaked between $100k and $250k MRR.11:01–18:04 · Guest disagreement 5/10 Debating SaaS Multiples, Acqui-hires, and Enterprise Tech Valuations A vigorous debate unfolds over whether tech valuations strictly follow revenue multiples or depend on strategic IP and acqui-hires. Nathan insists anything beyond cash flow multiples is pure speculation, while Eran provides real-world examples like GoInstant's $75M sale to Salesforce with only one customer.18:04–19:05 · Guest disagreement 0/10 Episode Part One Conclusion and Eran's Contact Channels Nathan pauses the interview to split the conversation into two parts, asking Eran for contact channels and wrapping up part one smoothly.0:57–5:31 · Nathan pushing back 3/10 Introducing Serial Entrepreneur Eran Eyal and Morning Banter Nathan probes Eran on the revenue and valuation mechanics of his first retail business eSquared. Eran gently corrects Nathan's assumption of a 1x top-line valuation multiple, noting retail concepts with franchise potential can fetch 3x to 4x.5:31–8:21 · Nathan pushing back 1/10 Building and Selling Evely's Drag-and-Drop Crowdsourcing Platform Eran details the genesis of Evely, building a drag-and-drop crowdsourcing tool on Azure, and eventual acquisition by Incubator. The exchange is highly collaborative with Nathan adding context about Wix and crowdfunding.8:21–11:01 · Nathan pushing back 3/10 Evely's Monetization Strategy and Peak Recurring Revenue Nathan drills into Evely's financial metrics, shifting from freemium to enterprise SaaS pricing. Eran reveals they reached 30 core enterprise accounts and peaked between $100k and $250k MRR.11:01–18:04 · Nathan pushing back 6/10 Debating SaaS Multiples, Acqui-hires, and Enterprise Tech Valuations A vigorous debate unfolds over whether tech valuations strictly follow revenue multiples or depend on strategic IP and acqui-hires. Nathan insists anything beyond cash flow multiples is pure speculation, while Eran provides real-world examples like GoInstant's $75M sale to Salesforce with only one customer.18:04–19:05 · Nathan pushing back 0/10 Episode Part One Conclusion and Eran's Contact Channels Nathan pauses the interview to split the conversation into two parts, asking Eran for contact channels and wrapping up part one smoothly.

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

0:00 · Nathan 65.5% · guest 34.5%0:00 · Nathan 65.5% · guest 34.5%3:00 · Nathan 25.1% · guest 74.9%3:00 · Nathan 25.1% · guest 74.9%6:00 · Nathan 26.7% · guest 73.3%6:00 · Nathan 26.7% · guest 73.3%9:00 · Nathan 19.3% · guest 80.7%9:00 · Nathan 19.3% · guest 80.7%12:00 · Nathan 28.2% · guest 71.8%12:00 · Nathan 28.2% · guest 71.8%15:00 · Nathan 17.9% · guest 82.1%15:00 · Nathan 17.9% · guest 82.1%18:00 · Nathan 78.9% · guest 21.1%18:00 · Nathan 78.9% · guest 21.1%21:00 · Nathan 100% · guest 0%21:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 13:27 Rejecting strict ARR multiple models with the GoInstant case study

Eran forcefully rejects Nathan's assertion that SaaS companies must be tied to ARR multiples, citing GoInstant selling for $75 million with just one customer.

 Hardest push from Nathan ▶ 15:20 Nathan dismisses acqui-hire valuations as pure speculation

Nathan pushes back against Eran's outlier examples, arguing that valuations detached from cash flow are purely speculative and set unrealistic expectations.

 Biggest teaching moment ▶ 16:34 Eran breaks down ad agency vs. tech giant M&A valuation logic

Eran explains in detail why holding companies like WPP and Omnicom evaluate businesses on strict services EBITDA while tech buyers like Oracle evaluate strategic product leverage.

 Nathan holds their own ▶ 12:48 Nathan cites 10-20x SaaS exit multiples from previous guests

Nathan counters Eran's dismissal of MRR valuations by referencing past enterprise exits like a $120M Oracle sale to demonstrate standard market benchmarks.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Serial Entrepreneur Eran Eyal and Morning Banter 4323 Nathan probes Eran on the revenue and valuation mechanics of his first retail business eSquared. Eran gently corrects Nathan's assumption of a 1x top-line valuation multiple, noting retail concepts with franchise potential can fetch 3x to 4x.
Building and Selling Evely's Drag-and-Drop Crowdsourcing Platform 3111 Eran details the genesis of Evely, building a drag-and-drop crowdsourcing tool on Azure, and eventual acquisition by Incubator. The exchange is highly collaborative with Nathan adding context about Wix and crowdfunding.
Evely's Monetization Strategy and Peak Recurring Revenue 4223 Nathan drills into Evely's financial metrics, shifting from freemium to enterprise SaaS pricing. Eran reveals they reached 30 core enterprise accounts and peaked between $100k and $250k MRR.
Debating SaaS Multiples, Acqui-hires, and Enterprise Tech Valuations 6656 A vigorous debate unfolds over whether tech valuations strictly follow revenue multiples or depend on strategic IP and acqui-hires. Nathan insists anything beyond cash flow multiples is pure speculation, while Eran provides real-world examples like GoInstant's $75M sale to Salesforce with only one customer.
Episode Part One Conclusion and Eran's Contact Channels 1100 Nathan pauses the interview to split the conversation into two parts, asking Eran for contact channels and wrapping up part one smoothly.

Statements from this episode (5)

Opinion
Eyal: Retail businesses can fetch valuation multiples up to 4x revenue
“No, I think you'll get more than one X. Two. I definitely think you'll definitely get more than one X. You can get up to three to four X.”
Eran Eyal Feb 23, 2016 ▶ 5:25
Assertion Not checkable as stated
Eyal: Evely reached $100k MRR in 2012 and peaked near $250k MRR
“We hit over a hundred KMRR initially in around, I think, 2000 and 12 when we started to understand our business model. Okay. We had months where we pushed it beyond that to somewhere to about two 50.”
Eran Eyal Feb 23, 2016 ▶ 10:38
Assertion Partly supported
Eyal says Salesforce acquired API startup GoInstant for approximately $75 million
“A friend of mine, Jevin McDonald sold GoInstant for around seventy-five million dollars to Salesforce. SaaS-based model and you know, actually it was kind of a, it was kind of an API play, but it's still SaaS-based model. And they only had one customer, but ye…”
Eran Eyal Feb 23, 2016 ▶ 13:45
Insight
Eyal: Advertising holding companies value acquisitions purely on revenue and profit
“When you're selling to certain types of companies, to certain type of companies, especially if you're going to be exiting to an advertising company or an ad tech company you are going to be judged on your profitability and your and your multiples on profitabil…”
Eran Eyal Feb 23, 2016 ▶ 16:01
Assertion Not checkable as stated
Eyal: Springleap has 180,000 advertising agency experts on platform
“Spring leap, you know, we've got a 180,000 advertising agency experts for expert insights.”
Eran Eyal Feb 23, 2016 ▶ 17:30
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