The Exchanges

Q Yeah. Yeah. Walk me through. You've mentioned put analysts on the account a couple times. What does your team look like today? Let's just start off with how many are only writing code on engineers?

A Yeah. So it's about, so it's, it's pretty even, right? So we have 33 employees right now. So you can pretty much split it evenly between growth, financial analysts and development. Like that's really kind of like, it's almost like a third, a third, a third. Um, and so what you just zoned in on, uh, is the, what we call our white glove onboarding. So it's, I think one of the key differentiators for us in this space, like we, I was a fractional CFO for a number of years, as was my co-founder, Steven. And we just knew that if you plop somebody and kind of like a deeper, like financial analysis software, they're going to fall flat on their face. It's, it's kind of like a specialized business function. So having a seed stage founder jump in and just say, here's the keys, go ahead, have fun. That wasn't going to work out too well. Um, so what we do instead was we only do annual contracts. We pair them up with a financial analyst, a finance expert, specifically for venture finance. Their job is to help them build the model. Use the data that they have, help inform the forecast, train them on how to use the forecast, and then we check in with them sporadically, right? Um, and that's kind of like, it's almost like a, um, uh, I don't like to use this word, but it's kind of like a blend of, like, SaaS and services in a way. Now, the idea is most of the services component is done on the fr…

AI assessment note: “we have 33 employees right now. So you can pretty much split it evenly”

Q You know, for example, I mean, Stripe and some other, even SPV sometimes, like, They're, they're folks and they're doing new deals with SaaS companies. They actually have like a massive team in India that does a bunch of like the literally P and cleaning the P and L, the balance sheet, et cetera. Who like, who are some of these folks that you put in your financial analyst category?

A Yeah, no, it's a great question. So, uh, we, everybody here's, that's an analyst is based in the U S except for, uh, one of our analysts, whose name is Phoebe, who is based over in the UK. Um, I mean, we, a lot of them are previous founders, right? We just hired, uh, we have, I think three analysts that were founders before they joined Forecaster as financial analysts. And they were like kind of financing founders. We have some folks that were like accountants beforehand, but like all of these people are, Kind of more financial inclined mathy people that are really, really interested in startups. Um, and so they, so, you know, they wanted to kind of jump on board on, on us where we're kind of like near the ground.

AI assessment note: “we have, I think three analysts that were founders before they joined Forecaster”

Q Um, yeah. Well, and so what I always like when someone takes something from that, they saw a competitor doing that they liked and they're implementing themselves. A lot of people, their egos are too big to copy, which, but like, I think that's ridiculous. So what, what did, how did you know that it was working for pry? How did you know it was a good idea to copy?

A Yeah. So what's funny is we didn't, right? We saw that they were doing that. Obviously we saw that they had some success in their exit, depending on kind of like what, what, what it ended up looking like. But what we did was we really liked the idea of an expense-based pricing for obvious reasons. It's kind of a good way to price along the demand curve. So once we decided that this was something that we wanted to look into, we just went back and just started doing like plain customer discovery. We went back to our old customers, our beta customers, and we said, Hey, listen, you know, if we were to price in this way, and if we were to kind of reassess your price every single year, and we did it with this fashion, how would that make you feel? What would you think? Would that turn you off? Would you be okay with that? Assuming that we're adding more value as you're getting bigger as well. We're not just charging you the same for charging you more for the literally same thing. Uh, and they all were like, yeah, I mean, I think that that's totally reasonable. It seems like a fair way to price. Never going to be too big of an expense if you do it this way. And that's what, that's whenever we, we went forward with it.

AI assessment note: “what's funny is we didn't, right? We saw that they were doing that.”

Q So. So those 500 for the customers say, what are they paying you per month on average? Yeah.

A So we only do annual subscriptions. Uh, and it's, and it's an interesting question because historically it was a one size fits all. We're still technically in beta. If you go on our website, you'll see a beta tag. We're going to be moving that off. It's more of a marketing ploy at this point, but for the longest time, people just paid us a standard 2000 dollars a year. And then we would give them a white glove onboarding because they got us paid back. Like we got paid on the front end. We could afford to put some analyst hours behind the account, get them set up, get them trained, all of that. Here in November, we really started rolling out our variable pricing model, which similar to Pry, this is inspired by Pry, we're going to be pricing our annual contracts based off of the monthly expenses of the customer. So the idea there being that larger customers we can afford to spend more time with, we can get them set up, we can train them, make sure that they get more success out of the platform as much as we can get. Um, and then we'll charge them more for that. So, uh, to, to directly answer your question of the five 50, if you just do a straight up blended average today, then it's about 1400 dollars. Uh, if you like discounted per year, uh, cause we do some discounting for partners and things like that. That's slowly creeping up since November, since we started releasing this.

AI assessment note: “if you just do a straight up blended average today, then it's about 1400 dollars”

Q Yeah, this is a hot space. I mean, you saw companies like Pry and Finmark raise VC, and you know that they exited, but it was pretty quick, and you sort of wonder, well, wait a second, can you actually build a big software company in this sort of forecasting space?

A Yeah, it's a really great question. And it is pretty wild to see how, how hot this space is. I mean, if you go back, you know, to the pre Carta days, you know, Carta got really, really big back around like 20 18. And of course now it's a seven billion dollar company. So I think what happened was you saw a lot of these people that kind of mentally connected the dots that, Hey, if this can be done in a cap table, you know, this, if you can basically software a cap table, then a financial model kind of sits adjacent to that. So you're seeing a lot of people kind of coming out of the woodwork. Tackling the space. Uh, but to your point, it is, is quite a bit more complex than a cap table management software whenever you really get into it. Um, and I think that what you're seeing is there are a lot of people that are tackling the space, you know, Pry and Finmark both had really, really solid exits for where they were, you know, in terms of revenue and customer, they were both relatively early, but they exited for, for a decent amount. We of course know that Pry exited for ninety million. We haven't yet found out publicly what, what Finmark exited for, but yeah.

AI assessment note: “to your point, it is, is quite a bit more complex than a cap table”

Q And the prior ninety million though, how is that split up between cash and stock?

A That's a great question. And, and like, honestly, like we don't a hundred percent know the answer to that. If I had to guess, I would say it was pretty heavy stock. Um, but you know, either way, I mean, I know that they weren't really generating a ton of revenue. Um, but I, but either way, I mean, I think that the space is really, really interesting just because it's been dominated by Excel. 98% of financial models are built in Excel. To your point, the challenge is maintaining the flexibility that Excel has, but also creating a standardized product that then you can integrate with and things like that. We've got about 550 customers right now doing about 1.4 million in revenue. Um, and we're seeing.

AI assessment note: “honestly, like we don't a hundred percent know the answer to that.”