There can be a benefit to waiting to raise money.
Like a $1.1 million first round of venture capital when the product is right, the customers are pleased, the team is productive and the company is profitable.
That's the news at Durham-based RevBoss
today. Its first outside investment is being led by Durham and Silicon Valley based Sovereign's Capital with participation by a trio of local angel investors—Robbie Allen
, who sold his startup Automated Insights earlier this year, Bruce Boehm
, who invested in RevBoss founder Eric Boggs'
last startup Argyle Social, and Alston Gardner
, a local partner with Atlanta-based Fulcrum Ventures.
According to Boggs, his company wasn't a hard sell. It has 20 paying customers for a software-as-a-service product that generates viable sales leads using software, data and the remote task-oriented workforce employed by Durham startup CloudFactory
, another Sovereign's portfolio company. That's after two years spent consulting with and understanding the needs of sales teams, and the last year building out a product around those learnings. An NC IDEA grant
late last year helped fund the work.
But Boggs realized it might be time to scale faster in recent months, when one of his customers reached its 16th month using RevBoss to find and vet sales leads. After a few phone calls and in-person meetings locally, he'd closed the round.
"We were able to skip the $300-400,000 round because we built our company through customer revenue," he says.
Echoes Henry Kaestner, a Sovereign's Capital managing principal and co-founder of Raleigh-based Bandwidth: "While they are building a phenomenal software platform and have an unfair advantage in the way they have integrated with CloudFactory, they are going to succeed because they do a better job of understanding the customer's issues—they look to delight the customer. It's old fashioned, but ultimately, it's what drew me to RevBoss and why we invested."
RevBoss works like this: Businesses provide an ideal customer profile and RevBoss uses a combination of software and people to find, vet and get contact information for potential customers who fit the profile. The people side is powered by CloudFactory, which employs thousands of workers in Nepal who conduct research, organize and extract information from unstructured data sets and add an important human touch to the work of software programs. RevBoss customer success managers help clients take advantage of those leads by suggesting messaging strategies and channels for best converting them to customers.
Most of RevBoss's customers today are small and mid-sized software-as-a-service firms with 50 or fewer employees and small sales teams. Though they find huge benefit from a solution like this, Boggs believes larger companies will want it too. It frees up sales people to foster relationships and sell versus spending an average 30-40 percent of their time tracking down potential leads.
"There is something really compelling about a company that solves a problem that just about every company feels—You have to be able to build out a sales development pipeline," says Kaestner, who recently moved to Northern California but has seven of 19 portfolio companies based in the Triangle. Also compelling is that RevBoss can grow its own sales pipeline using its own software.
Sales tech is an increasingly popular sector for venture capitalists. A recent interview in VentureBeat with a Bessemer Ventures partner
called it more interesting than once-favored marketing or advertising technologies, largely due to the success of Salesforce and LinkedIn and the still fragmented way of tracking down and contacting the right leads.
But beyond the industry opportunity, Kaestner was drawn to Boggs and his ability to recruit the strong team of eight today. He believes they can execute faster and more efficiently than others in the space, while keeping and adding customers. That was a key value in Kaestner's days at Bandwidth too.
"It's one thing to say you focus on lifetime customer value," he says. "There's something different about eating, sleeping and drinking that, and that's Eric."
The team will grow now that the funding has closed. Boggs has already hired former Argyle Social employee Mike Novi as vice president of product. He'll soon add a vice president of engineering, software engineer, and business development and marketing managers.
While funding is certainly validating after two years of bootstrapped building and iterating, Boggs admits he's most excited that his team has built a sales automation software and process that is selling well itself.
Now, it's time to do more of it.
The RevBoss team includes, from left, Zach Boylston, Kelsey Sawyers, Eric Boggs, Kelly Hollenbeck, Mason Andress and Josh Yager. Not pictured, Danny Chu and Mike Novi. Credit: RevBoss