Insight
Capchase debt financing saves Blackthorn over $18M compared to equity dilution
“I think I did some rough math. I think over the next two and a half to three years, we're going to pay them upwards of two million. Whereas if we did a dilutive round now at exit, that dilution would be minimum, twenty million, like bare minimum.”
Insight
Federspiel: A software company cannot scale selling a $3,000 product
“So if you have to have a go to market cadence where you're selling a three K product, you can't scale your company.”
Assertion Not checkable as stated
Blackthorn Reached $4.5M ARR With Only Two Outbound Deals Closed
“We're at four and a half million ARR. I think to date we've had two outbound deals, Close.”
Disclosure
Blackthorn acquired Texty for $3.25M using debt for the down payment
“So, we were at 550 K ARR. I said, hey, you know, what do you guys want to sell this thing for? They said six X, and I said, okay, that sounds fair. So it ended up being like three and a quarter million. And so we did 1.2 million down payment. We didn't have th…”
Assertion Not checkable as stated
Blackthorn donated $120K to Stripe Climate before reaching profitability
“So we do one percent of our revenue goes to Stripe Climate. I think this goes into my own personal interest, but part of our building of our company culture. We've given away a 120 K to date, and for a company that's not yet even break even”
Disclosure
Blackthorn closed a $1M annual contract, 10x its previous historical maximum
“Our payments app is now two and a half times more expensive, but the biggest customer we had for the longest time was a hundred K a year. We recently sold one that's a million a year for a really, really big deployment doing mobile payments.”
Insight
Federspiel: Treat SaaS partnerships like hiring and cut underperformers quickly
“There's like the hire, slow, fire, fast kind of thing. For people, it is the same thing for partnerships.”
Disclosure
Blackthorn pays 15 percent of its licensing fees back to Salesforce
“The curse side is we pay 15% of our licensing fees back to back to the dragon.”
Assertion Not checkable as stated
Acquirers pay 18x to 22x multiples on payment gateway revenue share
“I've heard the multiple they give on, on, Gateway revenue share volume is 18 to 22 X, which is, you know, obviously enormous.”
Insight
Software vendors driving payment gateway volume receive revenue share agreements
“So when you have volume going through any gateway, basically every company has some agreement with the gateway to get some kind of mutual funding that goes back and forth, like authorized.net has one. Braintree has one. PayPal has one. They all have one. So ev…”
Disclosure
Blackthorn employees invested $180,000 of their own money in late 2019
“Well, we had an employee round and they bought like another 180 K.”
Assertion Not checkable as stated
Federspiel: Blackthorn has reached approximately $14M in ARR
“So, we're at about fourteen million ARR now.”
Disclosure
Federspiel: Blackthorn took $18M in debt, no VC, and has no board
“We have a big, well, I guess it's all relative, eighteen million debt facility, 14 of which we've drawn so far, but we have no board, it's just me, ah, we have no VC, and we plan to be breakeven, well, 23 is not, it's the end of twenty-twenty-two, it's our fis…”
Disclosure
Blackthorn shifted focus to $50K+ enterprise subscriptions over smaller deals
“So we didn't want to sell two, three, four, five K subscriptions. We wanted to do 50 K, hundred K plus space subscriptions.”
Assertion Not checkable as stated
Blackthorn funded its first 10 employees with $1M in services revenue
“You can see over the first few years, we were doing about a million a year of ProServe. That was paying for about 10 of us to work there”
Disclosure
Blackthorn acquired PCI-Fi at $130K ARR for $850K paid over time
“They were a 130 K ARR. We agreed on eight 50 K purchase price. We did a down payment. We paid over two and a half years.”
Disclosure
Blackthorn paid Texty's $2M acquisition balance over 24 months from cash flow
“The other two million were to be paid over 24 months, which we paid over our own cash flow. And they were going to be incrementing payments. So they started small, and then they grew with the size of our company, and they agreed with that.”
Assertion Not checkable as stated
Federspiel: Blackthorn makes roughly $1M annually from its Stripe revenue share
“And now we're making somewhere in the vicinity of like a million a year off of that partnership, where our customers don't get charged.”
Assertion Not checkable as stated
Federspiel: System integrators drive 75% of Blackthorn's leads
“They actually bring us the deals. That's, like, 75% of our leads that we have now.”
Disclosure
Blackthorn increased its events app average ARR from $12K to $45K
“Our events app is now four times more expensive, but our average ARR was about 12 K for the longest time. It's now up around 45 K because we started to land a lot bigger accounts”
Disclosure
Federspiel created 930 unique custom prices in Stripe for early Blackthorn customers
“I had 930 different prices that I looked in my Stripe product price book over the first three years. I had a unique price for every single customer.”
Assertion Not checkable as stated
Federspiel: Blackthorn has 630 customers and processed $3B in transaction volume
“We have about 630 customers. We've processed about three billion bucks through the app, and we sent thirty-one million SMS messages, which is Twilio is the underlying technology here.”
Prediction Not checkable as stated
Blackthorn expects to hit $5 million in ARR next month
“Four and a half, but we have a couple of things going. So I think we'll be at five by the end of next month.”
Disclosure
Blackthorn ended 2020 at $3.6M ARR and targets $7.2M for 2021
“I think it was 3.6. And I think our goal for end of this year is 7.2. Cause we're trying to do a hundred percent year over year.”
