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.
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Benson: Early-stage founders must abandon work-life balance and personal relationships
“Forget about your hobbies, you're not gonna be a good friend, son, daughter, mother. You gotta ruthlessly prioritize, identify the things that really matter to you, and only do those things. It's not a good time to have a work-life balance.”
Benson: COVID-19 disruption is definitely not a two-year problem
“This is a, this is likely a shorter term bump. Is it a three month problem? Is it an eight month problem? I'm not sure, but it's certainly not a two week problem and it's certainly not a two year problem.”
Benson: Founders should vest the bulk of their equity upon exit
“The way I would suggest would be a better way to do it is take a small slice of it. Like the amount that you would give like an early VP or someone who's, who's, who's high up in the organization, but not, not a founder and give and invest that portion over fo…”
Benson: Lighter Capital required full 4-year interest on early exit
“They had a term that if we wanted to exit the loan early, like after two years, it was a four-year loan, if we want to pay it off after two years and take our money somewhere else, We had to pay them all the interest as if we had been there for four years”
Benson: Engineering delivers higher long-term ROI than sales but takes longer
“Sales or marketing or anything on the revenue side pays off at a pays off faster, but at a lower ultimate rate engineering resources and actually making the product better, creating that extra feature that wins you extra deals pays off at the highest rate, but…”
Benson: SaaS startups should always take debt before equity once generating revenue
“I think that the rule is debt before equity. If you can get it, it's cheaper. Equity capital is super expensive. You can't get debt until you already have revenue. Once you can get debt, you should get debt. You stack equity on top of it. But even if you just …”
Most SaaS companies are a bad fit for venture capital economics
“I don't think that SaaS companies are always a good fit for venture capital. And I'd say a lot more often than not, they're not a good fit for venture capital. There's so many small problems in the world that don't have, aren't, just don't have the explosive g…”
Zoho customers are significantly less likely to buy software add-ons
“So if someone who's purchased Zoho is, is showing that they're more cost conscience, they're willing to take shortcuts. They want the cheaper thing. And so it, they're less likely to purchase add-ons of this nature.”
Steve Benson argues venture capital is wrong for over 90% of startups
“For the vast majority of SaaS founders, they're not the right fit, right? They only want to invest in a very small slice of the world of SaaS, right? The super high growth, you know, huge companies you know, and there's the, that 90, I don't know, you might kn…”
Steve Benson warns founders that one-year SaaS debt deals are highly risky
“The reason they assume this is because a lot of the SAS debt providers are doing year long deals. That's really risky because you're basically You're saying you're going to pay their debt back with more debt, but you know, we're standing on the barrel of a rec…”
Benson: Badger Maps secured $308K upfront via 3-year competitor exclusivity
“I traded for three years, paying three years up front it was like 308,000 dollars or something. I traded away, not, I promised not to sell the product to their two biggest competitors for that three year period”
Benson: Three quarters of SaaS lenders offer 1-year deals unusable for headcount
“Three quarters of the SaaS lenders are like, they want to do one-year deals, which you can't invest in, in human capital over one year.”
Benson: 15-minute onboarding calls are viable for $420 annual SaaS plans
“We do reach out to even as just someone who looks like a single seat deal will at least reach out to them and ask them if they have questions about how to use the product. You know, we'll set it up for them, get them successful. That call usually takes 20 minu…”
Benson: Badger Maps pays sales reps straight salaries without commissions
“It's a salaried role. Even, even so all, all these roles are salaried roles, including the sales role.”
Benson: Badger Maps pays around 22% to 23% interest on Lighter Capital debt
“I think it was like 22, 23%.”
Benson: B2B SaaS podcasts should target micro-niches over audience size
“You don't have to have a huge podcast. You have to have a podcast that is very specifically valuable in some way to a very specific group of people, your ideal customer profile. And, you know, some people have larger TAMs than others, and so it can be more bro…”
Warrant-backed venture debt becomes drastically more expensive for successful startups
“The trade-off being there that, that often, if you're doing well, that ends up being a much, much more expensive debt. If you're, if you don't do well, then that ends up being cheaper debt because the exchange in exchange for the warrants, you don't, You pay a…”
Benson: Early SaaS debt from Lighter Capital was capped at 3-4x MRR
“What didn't exist, well, I mean, the products that exist were more expensive, for starters, but they were also, they weren't willing to loan very much, right? So I think Leiter would do, like, three, and I'll get into this in my slides, I don't want to blow my…”
Benson retained 65% equity in Badger Maps while his co-founder held 20%
“65.
And the other co-founder owns like 20.”
Benson: Software sales drop severely across November, December, and early January
“There, I've got a seasonality problem, problem being that people don't buy software in November or December and hardly in the first half of January.”
Benson: Lighter Capital RBF cost Badger Maps about 18% interest
“I think for me, it worked out to be about 18%, because we weren't that good at growing, but if we had been good at growing, it would have been a lot more expensive.”
Benson: Founderpath lends up to 8x MRR versus Scaleworks at 4x MRR
“Scaleworks is at four XMRR, he's at eight XMRR.”
Benson: Debt lenders often demand faster repayment when business slows down
“That, that providers love to give you an umbrella when it's not raining and take away the umbrella once it starts raining. Perfect. So they, when times are bad, they'll often demand you pay back faster and they'll have terms in your contract.”
Benson: Badger Maps will pivot to home-visit healthcare workers
“So that's where we're going to be looking for, to pivot towards things like that and Bring in new business from that instead of to make up for the lost business in other places.”
Benson: Badger Maps offered 50% discounts to prevent early pandemic churn
“What we landed on was when an individual calls, we should offer them half off for three months.
if they called to quit offer them half off for three months and then and then, and see if they do that instead of quitting.”
Benson: SaaS debt interest rates drop to 16-18% above $3M revenue
“As you get larger, I think the prices come down to more around 17, 16, 17, 18%. And that's, that, I think that's much more reasonable for a more mid-sized company. You know, if you're over three million dollars, I think you could, you start creeping into that …”
Benson: Every Badger Maps employee is an equity owner
“Well, I mean, you could say that, you know, stock is a variable upside, so the success of the company, and everyone is a, is an owner in the company.”
Benson: Revenue-based debt fits cash-generative SaaS, not capital-hungry startups
“It's a great product for companies that throw off cash.
Right.
So if you have a,
A nice MRR and a growing MRR.
It's a nice way to raise money.
Obviously it wouldn't be a good fit if you're, you know, for a lot of companies that don't, that are capital hungry, …”
Badger Maps revenue shrank 8% in 2020 due to COVID-19
“We still, we shrunk about eight percent in 2020, because as you say, it's a bad time to be meeting your customers face to face.”
Badger Maps generates roughly 2,000 verified leads per month
“We count things either a first meeting or a signed up trial is, is a, you know, verified lead. And we're doing about 500 a week. So 2000 a month.”
Salesforce drives the most leads of any Badger Maps CRM integration
“Salesforce is definitely the largest in terms of like leads and people interested, which makes sense, right?”
Badger Maps grew 29% in 2022 and expects 15% in 2023
“We grew like 29% last year. I think we're around 15% is where we'll come in for this year, but so it's, but it's off a bigger number.”
Badger Mapping lost 40% of revenue in 2020 but finished down 10%
“We probably lost 40% of our customers during like revenue wise during during 2020. That being said, we were able to sell to a bunch of new customers during that period. So we only ended up about down about 10%.”
Steve Benson says Badger Mapping is approaching $5 million in ARR
“You could divide our total revenue, which is right around five million. We're about to cross five either this month or next month, I think.”
Badger Mapping is preparing to close its first 1,000-seat enterprise deal
“As of right now, but a little bird on the sales team tells me that we're about to do a thousand seat one, so for the first time.”
Badger Mapping grew from $4.2M to nearly $5M ARR in 2022
“A year ago, I, we started this year at three 50 in MRR. So I'd have to run that math, but what is that? 4.2 ish.”
Badger Mapping sold only 10% to 12% to non-institutional angel investors
“We've only brought in from an investor perspective, we've, I get, we've sold about, I think, 12, 10, 12% of the company to investors. So, and no, there's no professional money in there.”
Steve Benson retains over 50% ownership of Badger Mapping at $5M ARR
“So I own more than half of the business”
Badger Mapping raised $6M in total debt to reach $5M ARR
“I think I've done, well, I think I've done about six million dollars in debt over the years on and off. You know, and moving it around right now. I have about 2.25 with you guys at founder path, as you know”
Salesforce acquired Badger Mapping's primary competitor for roughly $250 million
“I've always got my eye on, on, on Mark Benioff. Cause he bought my biggest competitor for. Two hundred and fifty million bucks or so.”
Benson self-funded Badger Maps using $1M from early Google work
“I was able to fund the early parts of the business without equity because I had worked at Google and early enough. So I had like a million bucks to just light on fire basically and become broke again. And so that's what I did.”
Benson borrowed $888,000 in four tranches from Lighter Capital
“And so I borrowed 888,000 dollars, two years and four tranches.”
Benson: Badger Maps borrowed $1.5M over three tranches from Scaleworks
“I borrowed 1.5 million dollars over three tranches from them.”
Benson: Tranching debt lowers capital costs by minimizing idle cash
“The more you can match your spend with the money that you're bringing in, the lower your ultimate cost of capital is going to be because you're holding the money in your bank account for less time.”