StarZero All shows Try the podcast clipper →

Jan 20, 2016 · 18m · top-founders

Why You Should Turn Down a $14m Acquisition Offer with Derek Bluford of QuickLegal

Derek Bluford · 9m 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 this episode of The Top, host Nathan Latka interviews QuickLegal founder Derek Bluford to discuss scaling an on-demand legal teleconsultation platform to $65,000 in monthly recurring revenue. Bluford details his business model, fundraising milestones, and strategic reasoning for walking away from a $14 million acquisition offer in pursuit of long-term market 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 43.8% of the talking time here. How this is scored →

Nathan as informed peer 5.4 Guest teaching 2.2 Guest disagreement 1.8 Nathan pushing back 4.4
05100:0010:001:49–4:37 · Nathan as informed peer 5/10 Founding QuickLegal and Derek's Previous Startup Exit Nathan presses Derek to move past vague statements like 'very quickly' and 'a couple 100,000 dollars' to extract exact numbers on his previous company's sale price ($425k) and launch timeline.4:37–7:14 · Nathan as informed peer 7/10 QuickLegal Monetization, SaaS Pricing, and Fundraising Valuation Nathan calculates QuickLegal's annual run rate ($800k) and multiple (16x on top-line ARR) on the fly, checking whether Derek's angel round was a convertible note cap or an actual priced equity round.7:14–11:58 · Nathan as informed peer 7/10 Turning Down a Fourteen Million Dollar Acquisition Offer Nathan aggressively challenges Derek's rationale for turning down a $14M acquisition offer when he only has 130 paying customers, arguing that an $8M personal payout is life-changing compared to unproven projections.11:58–14:00 · Nathan as informed peer 4/10 Competitive Moats, Legal Tech Partnerships, and Contact Details The conversation shifts to a cooperative tone as Derek explains how non-compete strategic partnerships with Rocket Lawyer and LegalZoom mitigate platform risk.14:01–17:28 · Nathan as informed peer 4/10 The Famous Five Rapid Fire Questions with Derek Nathan conducts the Famous Five rapid fire round, playfully teasing Derek about wanting to beat his competitor Clio and reacting with shock to Derek's extreme sleep schedule during 500 Startups.1:49–4:37 · Guest teaching 2/10 Founding QuickLegal and Derek's Previous Startup Exit Nathan presses Derek to move past vague statements like 'very quickly' and 'a couple 100,000 dollars' to extract exact numbers on his previous company's sale price ($425k) and launch timeline.4:37–7:14 · Guest teaching 2/10 QuickLegal Monetization, SaaS Pricing, and Fundraising Valuation Nathan calculates QuickLegal's annual run rate ($800k) and multiple (16x on top-line ARR) on the fly, checking whether Derek's angel round was a convertible note cap or an actual priced equity round.7:14–11:58 · Guest teaching 3/10 Turning Down a Fourteen Million Dollar Acquisition Offer Nathan aggressively challenges Derek's rationale for turning down a $14M acquisition offer when he only has 130 paying customers, arguing that an $8M personal payout is life-changing compared to unproven projections.11:58–14:00 · Guest teaching 2/10 Competitive Moats, Legal Tech Partnerships, and Contact Details The conversation shifts to a cooperative tone as Derek explains how non-compete strategic partnerships with Rocket Lawyer and LegalZoom mitigate platform risk.14:01–17:28 · Guest teaching 2/10 The Famous Five Rapid Fire Questions with Derek Nathan conducts the Famous Five rapid fire round, playfully teasing Derek about wanting to beat his competitor Clio and reacting with shock to Derek's extreme sleep schedule during 500 Startups.1:49–4:37 · Guest disagreement 1/10 Founding QuickLegal and Derek's Previous Startup Exit Nathan presses Derek to move past vague statements like 'very quickly' and 'a couple 100,000 dollars' to extract exact numbers on his previous company's sale price ($425k) and launch timeline.4:37–7:14 · Guest disagreement 1/10 QuickLegal Monetization, SaaS Pricing, and Fundraising Valuation Nathan calculates QuickLegal's annual run rate ($800k) and multiple (16x on top-line ARR) on the fly, checking whether Derek's angel round was a convertible note cap or an actual priced equity round.7:14–11:58 · Guest disagreement 4/10 Turning Down a Fourteen Million Dollar Acquisition Offer Nathan aggressively challenges Derek's rationale for turning down a $14M acquisition offer when he only has 130 paying customers, arguing that an $8M personal payout is life-changing compared to unproven projections.11:58–14:00 · Guest disagreement 1/10 Competitive Moats, Legal Tech Partnerships, and Contact Details The conversation shifts to a cooperative tone as Derek explains how non-compete strategic partnerships with Rocket Lawyer and LegalZoom mitigate platform risk.14:01–17:28 · Guest disagreement 2/10 The Famous Five Rapid Fire Questions with Derek Nathan conducts the Famous Five rapid fire round, playfully teasing Derek about wanting to beat his competitor Clio and reacting with shock to Derek's extreme sleep schedule during 500 Startups.1:49–4:37 · Nathan pushing back 4/10 Founding QuickLegal and Derek's Previous Startup Exit Nathan presses Derek to move past vague statements like 'very quickly' and 'a couple 100,000 dollars' to extract exact numbers on his previous company's sale price ($425k) and launch timeline.4:37–7:14 · Nathan pushing back 5/10 QuickLegal Monetization, SaaS Pricing, and Fundraising Valuation Nathan calculates QuickLegal's annual run rate ($800k) and multiple (16x on top-line ARR) on the fly, checking whether Derek's angel round was a convertible note cap or an actual priced equity round.7:14–11:58 · Nathan pushing back 8/10 Turning Down a Fourteen Million Dollar Acquisition Offer Nathan aggressively challenges Derek's rationale for turning down a $14M acquisition offer when he only has 130 paying customers, arguing that an $8M personal payout is life-changing compared to unproven projections.11:58–14:00 · Nathan pushing back 2/10 Competitive Moats, Legal Tech Partnerships, and Contact Details The conversation shifts to a cooperative tone as Derek explains how non-compete strategic partnerships with Rocket Lawyer and LegalZoom mitigate platform risk.14:01–17:28 · Nathan pushing back 3/10 The Famous Five Rapid Fire Questions with Derek Nathan conducts the Famous Five rapid fire round, playfully teasing Derek about wanting to beat his competitor Clio and reacting with shock to Derek's extreme sleep schedule during 500 Startups.

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

0:00 · Nathan 65.3% · guest 34.7%0:00 · Nathan 65.3% · guest 34.7%3:00 · Nathan 18.2% · guest 81.8%3:00 · Nathan 18.2% · guest 81.8%6:00 · Nathan 46.3% · guest 53.7%6:00 · Nathan 46.3% · guest 53.7%9:00 · Nathan 31.8% · guest 68.2%9:00 · Nathan 31.8% · guest 68.2%12:00 · Nathan 60.7% · guest 39.3%12:00 · Nathan 60.7% · guest 39.3%15:00 · Nathan 40% · guest 60%15:00 · Nathan 40% · guest 60%18:00 · Nathan 0% · guest 0%18:00 · Nathan 0% · guest 0%
Sharpest disagreement ▶ 10:47 Derek defends growth upside over guaranteed exit

Derek pushes back against Nathan's insistence that he take guaranteed cash by citing impending ABA Journal publicity and Shark Tank exposure that will dwarf the $14M offer.

 Hardest push from Nathan ▶ 9:40 Nathan challenges turning down the buyout offer

Nathan calls Derek's decision crazy and emphasizes that going from 130 customers to 40,000 is speculative whereas the buyout contract represents immediate financial freedom.

 Biggest teaching moment ▶ 9:48 Derek outlines competitor Clio's California market share

Derek educates Nathan on legal tech market benchmark Clio having 40,000 paying attorneys in California alone, demonstrating the total addressable market potential.

 Nathan holds their own ▶ 6:44 Nathan breakdowns ARR multiple and valuation structure

Nathan demonstrates financial mastery by questioning whether the angel round was a note cap or priced equity and converting monthly revenue into an $800k ARR and 16x valuation multiple.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Founding QuickLegal and Derek's Previous Startup Exit 5214 Nathan presses Derek to move past vague statements like 'very quickly' and 'a couple 100,000 dollars' to extract exact numbers on his previous company's sale price ($425k) and launch timeline.
QuickLegal Monetization, SaaS Pricing, and Fundraising Valuation 7215 Nathan calculates QuickLegal's annual run rate ($800k) and multiple (16x on top-line ARR) on the fly, checking whether Derek's angel round was a convertible note cap or an actual priced equity round.
Turning Down a Fourteen Million Dollar Acquisition Offer 7348 Nathan aggressively challenges Derek's rationale for turning down a $14M acquisition offer when he only has 130 paying customers, arguing that an $8M personal payout is life-changing compared to unproven projections.
Competitive Moats, Legal Tech Partnerships, and Contact Details 4212 The conversation shifts to a cooperative tone as Derek explains how non-compete strategic partnerships with Rocket Lawyer and LegalZoom mitigate platform risk.
The Famous Five Rapid Fire Questions with Derek 4223 Nathan conducts the Famous Five rapid fire round, playfully teasing Derek about wanting to beat his competitor Clio and reacting with shock to Derek's extreme sleep schedule during 500 Startups.

Statements from this episode (10)

Assertion Not checkable as stated
Bluford: Sold previous legal services startup for $425,000
“It was 425,000.”
Derek Bluford Jan 20, 2016 ▶ 2:47
Assertion Not checkable as stated
Bluford: QuickLegal generates $65K monthly from 130 paying attorneys
“We have a little over a 130, which generates us about 65,000 dollars a month, and we have about a little over 700 attorneys that have signed up for our free, you know, ninety-day trial to give it a test run.”
Derek Bluford Jan 20, 2016 ▶ 5:48
Disclosure
Bluford: Bootstrapped QuickLegal to $600K before raising $750K
“I bootstrapped the company initially to Up to about 600,000, and then I raised about 750,000.”
Derek Bluford Jan 20, 2016 ▶ 6:04
Assertion Not checkable as stated
Bluford: QuickLegal raised angel capital at a $12M valuation
“Well, right now we've had some angels invest in, and right now, our valuation's twelve million.”
Derek Bluford Jan 20, 2016 ▶ 6:30
Disclosure
Bluford: Acquisition offer for QuickLegal was between $12M and $15M
“It's above our current valuation, and under 15.”
Derek Bluford Jan 20, 2016 ▶ 9:32
Assertion Not checkable as stated
Bluford: Clio has over 40,000 paying attorney users in California
“So they are a practice management company, and they have over 40,000 users just in California that are attorneys that pay them for their service.”
Derek Bluford Jan 20, 2016 ▶ 9:53
Disclosure
Bluford: Retains more than 60% ownership of QuickLegal
“I own more than 60.”
Derek Bluford Jan 20, 2016 ▶ 10:38
Prediction Didn’t hold up
Bluford: QuickLegal will be on the ABA Journal cover in Q1
“Yeah, so our first quarter, we're gonna be on the cover of the National ABA Journal, and that goes to about 1.2 million attorneys”
Derek Bluford Jan 20, 2016 ▶ 10:55
Disclosure
Bluford: QuickLegal filmed an appearance on Shark Tank
“We've done Shark Tank recently. That went very well, and we're waiting for that to air.”
Derek Bluford Jan 20, 2016 ▶ 11:22
Assertion Not checkable as stated
Bluford: QuickLegal signed partnerships and non-competes with LegalZoom and Rocket Lawyer
“And then thankfully, we've actually entered into strategic partnerships with them now. So with, you know, non-compete.”
Derek Bluford Jan 20, 2016 ▶ 12:09
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