The new normal
May 23, 2022
As the market conditions continue to evolve, we're keeping a close eye on what VCs are expecting of us when it comes to a Series B. The simple truth is that best of breed companies still continue to get funded and oftentimes at reasonable valuations. We have been extremely careful to not over-raise and also not raise at valuations that are problematic down the line if we can't live up to those expectations. With our Series A valuing us at [ ], our current revenue trajectory for 2022 has us far exceeding this prior round valuation even in this environment, one where many companies are taking a downround and raising a new round at a valuation that's less than the prior round.
One of the leading SaaS VCs in the space, David Sacks, posted a recording of his discussions with his portfolio companies in this market. A key takeaway was what the current bar is for fundraising as a great, good, and problematic company.
The good news is we are already going to fall squarely in the "Great" category within a few months time and with a few months to spare before the end of the year.
Growth: With just [ ] institutional deals in the door and continued growth of our platform, we're going to be at 3X year over year revenue growth already before Q4. Revenue is revenue this year, regardless of whether it's recurring or transactional, and our diversified revenue streams play to our favor in times like this.
Gross Margins: We ended 2021 already with a [ ]%+ gross margin business and we're projected to be about the same this year as well, particularly as the platform revenue picks up as we increase the pace of new borrowers coming online and third party underwriters helping us scale.
Net Dollar Retention: NDR measures how much of our recurring revenue has grown or shrunk over time as a result of new and lost customers. While we don't track this today, historically our platform has been fairly sticky and the velocity of new customers will increase as third party underwriters bring their own borrowers on board.
CAC Payback: With an average lifetime value over [ ] months of a borrower averaging approximately $[ ] and the cost to acquire them averaging approximately $[ ], we break even on a borrower in less than [ ] months, putting us in an even better range than what he has listed here.
Burn Multiple: This is a metric that tracks how much we're increasing our expenses relative to the amount of new recurring revenue we're bringing on. This is a new metric that we will begin tracking once we have our broker dealer and the service fees begin to kick in. Similar to NDR above, I like our chances given the third party underwriters giving us an extra boost.
If we do what we say we're going to do this year, we're going to be better than great. We got this 💪
