The Ledger
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A first-day IPO stock pop is not a sign of bad pricing
“Yeah, there's gonna, you're gonna read articles that say, like, oh, the pop on day one, like, that just means you, like, did a bad job of pricing your IPO. It's not really true. Like, we had the best advisors, the best people around the table on this. You don'…”
Half of private equity firms misrepresent their founder-friendly approach
“Because you meet all these guys and they're like, oh, it's just like a marriage. We're going to be partners. You know, we like to let entrepreneurs run their businesses. And like half of them are telling the truth and half of them are not. The half that are no…”
Prospective 2012 buyers cut DiscoverOrg's acquisition offer in half after diligence
“These guys retraded me right at the end. They said, oh, come down to San Francisco, have lunch with us. So I came down to San Francisco, and they were like, yeah, you know, there's some things in diligence we didn't like, and so we're gonna cut the deal in hal…”
The DOJ held RainKing's antitrust review to the final decision deadline
“When we made the acquisition of Rain King, we actually, you have to get antitrust approval. And so we went, and the regular, the regulators didn't love the ranking acquisition because they felt very similar, two very similar companies, and so we actually went …”
Passing on ZoomInfo at $240M was right because the company wasn't ready
“A year earlier, I had an opportunity to buy Zoom Info for two hundred and forty million dollars and I passed. And that might feel like a bad decision. Like, oh, that was dumb. He had to pay eight hundred million dollars one year later. It wasn't a bad decision…”
Selling majority equity reduced pressure and improved Henry Schuck's operational execution
“I sort of viewed the first transaction like an exit. And then once that happened, it took a lot of sort of day to day pressure off of my shoulders. And so I could operate in a better way because it wasn't like all of my money in the company. It was like we wer…”
DiscoverOrg expanded RainKing's profit from $10M to $35M in three months
“We made this acquisition of a company that was doing forty million dollars in revenue and ten million dollars of profitability. We acquired the business, and then three months later, it was doing forty-five million and thirty-five million dollars of profitabil…”
Acquiring a PE-backed company early requires paying their future return upfront
“A private equity firm came in at two hundred and forty million dollars that year before, and they're happy to hold the investment for four to five years because that's the hold period they had. I had to come in a year into that hold And pay them for what they …”
Most startups fail at go-to-market and plateau at $1M ARR
“Most companies don't figure out their go-to-market motion. They're, they have, like, a really interesting product, and through sort of just grit, they're able to sell it a couple times and build a million-dollar AR business or something like that.”
DiscoverOrg acquires companies with weak sales processes to apply its GTM engine
“And so I'm also looking for like bad sales processes because I think we have a really great one. And so that we could come in and sort of apply our domain expertise around go to market to a company that hasn't figured out that motion and then really accelerate…”
DiscoverOrg's aggregate net revenue retention across all tiers approaches 100%
“It's close to a hundred.”
DiscoverOrg spends less than $0.80 in CAC to acquire $1 of ARR
“No, it's, no, it's not 80, but it, but it's slightly less than 80.”
Private equity firms operating their portfolio companies is never a good scenario
“Some PE firms think that they're operators. And this one was being operated by the PE owners and that's never a good scenario.”
DiscoverOrg had $20M in revenue and $10M profit around 2012 buyout offer
“Revenue was it was probably twenty million and it was like ten million dollars of profitability.”
TA Associates bought 50% of DiscoverOrg at a $275M valuation in 2014
“They built sort of the marketing material, started talking to private equity firms, and then we brought in our first institutional capital, a firm called TA Associates, who bought 50% of the business at a two hundred and seventy five million dollar valuation.”
DiscoverOrg generated $35M in revenue with 50% EBITDA margins in 2014
“So at this site, at that point, the company's thirty-five million dollars of revenue, it's growing 60%, and it has 50% EBITDA margins.”
How private equity firms juice buyout fund returns using company debt
“When private equity firms do a deal like that, they can increase their return if they fund a part of the deal with debt. So instead of it all being equity that shares in the upside, they do a portion of it in equity And then they do the rest of it in debt that…”
DiscoverOrg received a $2B buyout offer four years after TA's investment
“So TA made this invest investment at two hundred and seventy five million dollars, and now we're four years into the future. This offers for 1.5 billion. We ended up taking an offer at two billion, which TA ended up selling a portion of what they owned and the…”
Henry Schuck and his co-founder put 40% of equity into employee pool
“When he left he agreed to put 25% of his ownership, and I put 15% of my ownership into a pot that we set up for employees.”
ZoomInfo does not disclose Annual Recurring Revenue to public investors
“We don't release an ARR number. We don't tell investors what the, ah, the ARR number is. And instead we just tell them the revenue number.”
Founders reaching $10M ARR should hire an experienced CFO strategist
“One, if you get to like, ten million dollars of ARR, you don't have a great CFO, you should probably get yourself a great CFO... The great CFOs are business strategists, and they help you understand the rhythm of the business. They help you see where to invest…”
Henry Schuck: Being a scaling public tech CEO is not fun
“Someone asked me the other day if I'm having fun. I'm not, like, by the way. The job is just too hard. It is just too hard. There are too many moving pieces. It is not fun. I am fulfilled. I am challenged. I would never do, I had, there's nothing else I would …”
Microsoft and LinkedIn dwarf all other sales solution providers combined
“And, like, in our space, Microsoft is the big player. And so all of us combined Have nothing on on the size and scope of LinkedIn and Microsoft as a sales solutions provider. And so I view Microsoft as the 800 pound gorilla, and then there's a whole sort of li…”
DiscoverOrg maintains 100% recurring revenue with zero onboarding fees
“Our business is 100% recurring revenue subscription. There's no professional services. There's no onboarding or implementation fees. It's all recurring, 100% recurring in subscription.”
DiscoverOrg bootstrapped to $25M ACV and 100 employees before raising capital
“So first of all, we self-funded through twenty five million in ACV. Which is incredible. Yeah. Annual contract value. And so we were on a twenty five million dollar run rate when we took the funding. And I think we sort of got to a place where we had a hundred…”
DiscoverOrg expects to exit 2016 at a $70M revenue run rate
“It'll be a little bit more than, yeah, we'll, we'll exit this year around seventy million in run rate.”
DiscoverOrg is profitable, which Schuck notes is rare for software companies
“We have a business that's profitable and which is a rare thing in, in, in software period.”
ZoomInfo was initially funded using $50,000 in Chase credit card debt
“I was actually, like, a 150,000 dollars in debt. You can't tell by my smile in this picture, but I was a 150,000 dollars in debt if you count law school, undergrad, and then when we started the business, I put 25,000 dollars on my credit card, and my co-founde…”
DiscoverOrg replicated a college data business that reached $5M in revenue
“I had worked for a similar company when I was in college, and we grew the company from about 300,000 dollars in revenue as a lifestyle business to five million in revenue. At five million in revenue, it was like 4.8 million dollars in EBITDA, and so there wasn…”
Henry Schuck sold 33% of his stake during DiscoverOrg's 2018 secondary
“I sold 33% of what I owned.”
Board pushed for ZoomInfo IPO three months after closing the acquisition
“Three months into the acquisition, the board went, hey, maybe you should IPO. And I went like, well, I'm kind of putting two companies together right now, and so I don't know how I'm gonna find time to set up for IPO, but They didn't care. So we started the pa…”
DiscoverOrg reached $120M–$130M run-rate ARR before The Carlyle Group invested
“We were twenty five million when they invested. And from a run rate perspective, we're probably one 21 30 when Carlisle came in.”
DiscoverOrg targets over 20 completed monthly product demos per SDR
“The actual metric that we look at more closely is how many completed demos are they doing a month? And we're looking for that to be more than 20.”
DiscoverOrg inbound SDRs call website form submitters within three minutes
“Our inbound SDRs, if you fill out a form on our website, we're going to call you in two to three minutes to try to set that demo.”
DiscoverOrg ran entirely on Infusionsoft until reaching $15M in revenue
“I ran our whole business on Infusionsoft and
Until we were about fifteen million in revenue.”
DiscoverOrg has over 2,100 corporate customers globally
“And we sell it on a subscription basis to the sales and marketing departments of over 2100 companies across the globe.”
Henry Schuck grew iProfile from $300k to $5M revenue before exiting
“At the previous company, I had steered that company from 300,000 in revenue to close to five million in revenue in a private equity exit”
DiscoverOrg customer contracts are multi-year, ranging from $30K to $1M annually
“Yeah, everything is multi-year annual. And they're paying anywhere from 30,000 to, you know, a million dollars.”
DiscoverOrg's average customer lifetime value is $300k to $400k
“They end up being worth somewhere between like 304 100,000 dollars.”