The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 42 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Dayton: Blind competing term sheet price drove a higher valuation and earnout
“And they didn't know all the terms. They just knew the price. Right. So, so they had much better terms and they bumped up the price and, you know, structured a two year earn out so that I could get all the money I wanted for the company.”
Dayton would consider a $6M all-cash buyout for Clearview Social
“That's probably in the ballpark of where I would be. I would listen to that.”
Dayton: Clearview Social hit a TAM ceiling after dominating its niche
“We had a great product and we kind of hit up against a TAM problem. So the industry just wasn't that big and we'd eaten most of the market.”
Dayton: Startups under $1M EBITDA cannot rely on M&A bankers for exits
“Now, look, if my company had been a little bit bigger or we'd had, you know, been to a million in EBITDA, it would have been simple. We could have hired a banker. We could have done a full process. They could have shopped the product. But really like when you'…”
Dayton: Clearview Social sold at a 13x multiple on ~$500k EBITDA
“So our EBITDA is, Was between, let's just say between four and 700,000 dollars at the time of the sale. Okay. And the framework that we were bought under is 13 times EBITDA.”
Dayton: Private equity buys SaaS at 13x EBITDA to sell at 20x
“But this is also the private equity game is this kind of EBITDA arbitrage because if they can buy companies at 13 X, they put them all together into a bigger company and then they can sell them for 20 X.”
Dayton: Personal add-backs like coaching and cars added $200k+ to EBITDA
“Like I had a company car and I had extra like coaching resources that I use that didn't need to be part. Right. And so it's like, when I started adding all these things back, You know, we're looking at like two or 300,000 dollars of EBITDA.”
Dayton: Software startups should immediately incorporate as C-Corps for QSBS protection
“Every, every company, every software company out there, if you're not a C corp, like change to a C corp immediately. Cause you have to hold for five years as a C corp to get QSBS protection.”
Dayton: Clearview Social retains customers for 90 months on average
“We're retaining our customers for 90 months on average, right?”
Dayton: Clearview Social Loses Customers Only to Non-Adoption, Not Competitors
“The only reason we lose customers is because they never started using it, right? They buy it and they never start sending out the emails to get people sharing. And so they get to the end of the year and it's like, oh, we didn't use this.”
Dayton: Clearview Social's addressable market is only about 3,000 customers
“So law firms and accounting firms and recruiting firms that are a fit for us, there are only about 3000 total customers. Like that's our addressable market.”
Dayton: Clearview Social reached $1M EBITDA within two years of sale
“By the way, Clearview Social has now hit a million dollars in EBITDA in the two years since we sold.”
Dayton: Clearview Social acquisition paid 70% upfront and 30% in earnouts
“So, so the way they structured the deal, it was about 70% up front, 20% year one, 10% year two.”
Dayton: Year-two earnout was tied to shareholder equity, not continued employment
“But then the thing is, if they hit the number in year two, I still get the money because it's based on my stock ownership, not on my participation.”
Dayton: Clearview Social paid a fractional CFO $15k to clean pre-sale books
“So we paid them five or six grand a month. But that was just for the three months for them to clean up our books, right? So once they did that, we actually transitioned to something else”
Clearview Social finished 2019 at over $2.3M ARR
“So we finished 2019 just over 2.3 million in our run rate.”
Dayton: Clearview Social sees 10% logo churn and 14% revenue churn
“So our logo turns about 10%. Overall churn is about 14% on revenue in the year.”
Clearview's average customer expansion dropped from 10% to 5% in 2020
“In past years, average upgrades were about 10% of ARR each year from current customers. Now we're, we have in our contracts a seven percent annual upgrade, and we're just like, we're lucky to get that seven percent now. So the average is five percent.”
Dayton: Clearview Social is EBITDA positive and barely profitable
“Yeah. So we're profitable, but we're right on the line.”
Clearview CAC doubled to $25k for a $13k ACV customer during COVID
“In the current market, we're currently paying 25,000 dollars to get a 13,000 dollar customer. And that's been through the pandemic. Pre-pandemic, we were closer to nine or 10,000 dollars as a CAC.”
Law firms comprise 70% of Clearview Social's customer base
“So, so law firms are probably 70% of our customers. Including about 30 of the top 100 law firms in the country.”
Dayton: Clearview Social reaches just under $1.5M ARR
“Yeah, so total ARR, we're just under 1.5 million ARR.”
Dayton: 90% of Clearview Social customers pay annually upfront
“Now that we, since we've made that switch, about 90% of them choose to pay annually, which has been really great for cash flow.”
Dayton: Clearview Social enterprise clients spend $60,000 annually
“So even though nine grams are average, we have a handful of firms that are spending 60,000 dollars a year and are using this across enterprises, multiple offices, multiple admins.”
Dayton: Clearview Social Has 14% Overall and 10% Core Industry Logo Churn
“So they cancel our churn is annually. Our churn is about 14%. But with our key industries, legal and accounting, it's closer to 10%.”
Dayton: Clearview Social Achieves Net Negative Revenue Churn via Upgrades
“Cause we, in terms of revenue we're not, you know, we're growing. So we have a negative and we get enough upgrades that the upgrades more than offset. So we have negative, negative churn in that sense.”
Dayton: Clearview Social spends about $3,000 to acquire each customer
“When you talk about client cost of client acquisition, well, it's about 3000 dollars”
Dayton: Clearview Social customer payback period is under six months
“Absolutely. Yeah, less than six months.”
Dayton: Clearview Social customer lifetime value exceeds $50,000
“Yeah, the lifetime value is over 50 grand, and it's borne that out, right? The firms that use our product successfully, they would never consider leaving it behind because it's the one simple product that just works for them, right?”
Dayton: Clearview Social awarded 9% of its 15% ESOP pool before selling
“So the, so, so the ESOP pool was, we had set aside about 15%, but we had only awarded about nine of the 15.”
Dayton: Clearview Social raised $1.2M from angels and $300k loan
“That's about 1.2 from angels and about 300,000 from a government loan.”
Clearview sets sales quota at $25k in new monthly ARR per rep
“So the quota per salesperson is About 25,000 dollars ARR per month in sales.”
Dayton: Clearview Social was at approximately $900K ARR 12 months ago
“So 12 months ago, we were at a About 900,000 ARR.”
Dayton: Legal consulting practice reached $400,000 annual revenue
“And I went from in the first year, I made about a hundred grand a year and I grew it doubled almost every year until I was doing about 400,000 dollars a year consulting to large law firms all over the world.”
Dayton: Law firm consulting commanded $7,500 daily rate
“I was making 7500 dollars a day to go and work with these firms.”