Why Bart MacDonald is Leaving $10 Million in Funding to Invest in SaaS Businesses

Learn why Bart MacDonald of BloomVP.com left the previous company that he founded and raised $10 million for.

Bart previously founded and help raise funding for the SaaS company, Sapling HR.

However, he recently stepped down from the CEO role at Sapling to found Bloom VP, a venture firm focused on SaaS.

Listen in to hear Bart's strategies and why he is so bullish on SaaS.

Full Transcript

Hey everyone: it's spencer. Here with nichepursuits.com, and today i'm, going to share an interview with bart mcdonald. He is from bloomvp.com now bart has a background in sas businesses. He actually raised 10 million dollars for his previous sas company, which was sapling hr, and we talked a little bit about that uh during the podcast.

But we focused more of our time talking about his latest venture, which is bloom, vp bloomvp buys and helps grow and invest in sas. Companies bart is very bullish in sas companies and in the model in general, and wants to take some of his expertise and apply that to other founders so that they can grow their businesses as well.

And so i hope that you enjoy the discussion that bart and i have as we talk about sas companies and some of the strategies in building and growing sas businesses. Now this podcast is sponsored by ahrefs.

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Go ahead and jump into the interview with bart mcdonald, [, Music, ], hey bart, welcome to the niche pursuits, podcast sansa! How are you i'm? Doing very good. It is uh great to connect here uh. We have both been involved in the sas business.

I've started a couple of little small sas companies uh over the years that my audience is very familiar with long tail pro uh. I'm now running, link whisper, which is a wordpress plugin uh and i know you & # 39.

Ve got a sas background as well, and so i'm very interested in talking about what you've done in the past and what you're doing now and then in particular uh how you're. Helping out sas founders and what is interesting to you in the micro sas space so that's kind of like what i'd like to cover here today, but let's, get some of your background.

Let's. You know tell us your story: what's, your professional experience, educational experience, you know maybe give us a a two three minute summary of who is bart mcdonald. Yeah awesome. Well, i'm thrilled to be here today.

I said i've been uh quite a long time, lister of uh of your podcast as well and uh. You know when we were chatting online. The other day i've. Seen my background in sas and because kind of entrepreneurship, i thought you know suddenly my background and then now what we're doing under our new platform, we've, just released blind venture partners uh, you know, maybe of interest to some Of your audience as as well so um, you know my background.

I'm, assuming i'm one of many international listeners uh to your podcast as well hail from sydney, australia, originally um. You know classically trained in in business entrepreneurship and uh organizational psychology in hr, so i went to one of sydney's.

Top schools, macquarie university and you know – was really excited to uh. You know my path ideally was to go into management. Consulting and uh that dream was dash pretty quickly coming out in the middle of the great recession.

I you know many many listeners would know. Australia was incredibly fortunate to be propped up throughout commodities boom at the time and uh. You know i was just relieved to have taken any any job i went in and was uh.

You know effectively hired as one of one out of a national intake for a graduate program at a company called one steel which is a spin-off of bhp builders and which is one of the world's largest and most successful mining and minerals.

Company um, so you know i was thrilled relative to what was happening in the headlines like i was still employed coming out of college, but knew ultimately my desire was to go longer term into into entrepreneurship.

So i kind of had a a riot as part of a very, very large organization for a couple of years and uh. You know ultimately think i was more the the null hypothesis. I came at the back end of that experience, realizing what i didn't want to be, which was you know, take the traditional nine to five.

You know pinstripe prison approach, it just didn't fit for me, and i think why is it? I was very fortunate. You know, in my perspective of how i look at the world to be raised around an entire family of entrepreneurs.

You know my dinner time conversation every night was listening to my mother and father. Their experiences of you know the high highs and the low lows of running. You know main street smb businesses as well back in uh in you know both um, suburban and also rural parts of uh of sydney and across australia, and so i always knew i wanted to kind of you know – have a lot more control over my own destiny.

As well – and you know looking at what was going to be the right medium to take me there and um, you know through happenstance, stumble across technology and kind of you know at this point in time, the startup community was still very embryonic back in sydney.

You know yes, the atlassians were all there and i think to that point, even canvas were all kind of you know very much in their first innings and they weren't as globally popular as they've. You know now very much become so fast forward a couple of years.

I uh, you know it was extremely um. You know fortunate to jump on an organization called general assembly uh. They were headquartered at that point in new york started out very, very similar to uh to we worked.

They were just really providing co-working opportunities across london, new york, san francisco and uh quickly, pivoted or expanded their business model to include all types of educational programs uh online – and you know campus-based education and i just had an opportunity to jump in.

You know head hunted through the australasian vp to join as one of the first employees and pretty early on at that company over the next couple of years. It was really this case of holding on that coming went through meteoric growth went from, i think, employee 28 to about 800 employees.

When i'd left about two and a half years later and wow, you know just had his tremendous experience, develop lifelong friendships but um. Also, one of the things for me is that i had experience every day working with a venture-backed us organization, and most of my peers were obviously located across america, and i just had this in burning insatiable desire.

Okay, how do i go out and build my next company, and and do it really at the epicenter of the software ecosystem, which you know largely was you know, san francisco and across the bay area and so packed? My bags and uh made my way out to san francisco circa late 2015 uh very fortunate to crash with my ultimately becoming co-founder of my last company, which is sapling hr.

We're, a mid-market focused hr platform and uh yeah over the next. Almost five years went out and built a company in the core hr space, providing software for people operations teams become really successful.

We raised about about 10 million dollars, google's. Ai fund grading ventures was a our largest investor and we built you know an amazing company. More than 50 employees uh located all around the world.

Canada, united states uh all the way across to india and pakistan, and you know really humbled to work with some amazing clients like kpmg, warby, parker, envisioned, figma and many more. What i learned is that yeah building sas companies is a you know, an amazing dispute.

I think about a um. You know if you were to kind of grade various business models or the quality of revenue from you know all the way through like service businesses, where you're selling your time and then ultimately like a ceiling on what your hourly rate can go To you know all the way through to marketplace businesses where you're, you know it's kind of two-sided.

You're having to constantly sell the supply side and the demand side through to them selling software products where they're. Just you build it once and then it's, just an incremental cost to continue selling it through the line of customers, but doing it on a software as a service business where there's subscription, so it's.

Repeatable predictable revenue and it just compounds very organically and non-linearly over time somewhere. I realized that you know i just wanted to take a hedge on that business model and spend probably the rest of my career building out.

You know either being an operator and over time now shifted much more across being an investor and acquire of other sas businesses as well, and that's. My latest venture and project rolling out bloom venture partners out to market just here in the last couple of months, so we uh, we're kind of a new type of investment, firm meets venture studio.

We have three pillars that we we offer to sas teams in market. First, we have a studio which provides product design, development and growth, marketing resources to help teams scale faster and on less burn.

Second, we have a venture capital arm that does early stage investing through a vc fund and thirdly, most recently just added on a complete acquisition fund. So you know we started to say a lot of teams.

Um, you know really. Founders were wanting to take the next step in their entrepreneurial career, and you know typically at the small scale uh you know, sas market there's. Haven't been many options for liquidity and we just fundamentally hold a view that we think that's, going to completely reshape itself in the coming years and uh.

You know wanting to get out early to market, providing an option for um both provide liquidity to these these founders, but also recognize what we believe is kind of diamonds. In the rough, where you know, we kind of have a different view of the world, but we can come in.

Take a different strategy, put a different team onto a great product and then ultimately continue to build that out over a much longer term. Time horizon awesome. Great uh background to give us an idea of where you & # 39.

Ve, been what you're doing now, and i do want to jump into uh bloom vp here just a little bit. But i want to catch up what happened with sapling, where's, that at you mentioned that you raised 10 million dollars, and i i think you sent over an article that you know just last year.

I think you'd. Raise you know 4 million, so so it's. It's. It's. A very recent uh thing. Are you still working on sapling? What's, uh kind of round out that story uh for us yeah? Absolutely so sapling was my second organization that was uh very fortunate to be one of the co-founders and ceos of i had another company prior to that back in australia and yeah with sapling it's.

Probably one of the better experiences i've ever had in my entire life. I got to found that company, with one of my oldest friends, uh, annie creeper. In fact, we were born one day apart in the same hospital back in sydney wow.

That's awesome quite literally, and i think that just enabled us to get up the curve. So much quicker. I mean a lot of those uh. You know i've, spoken to other founders that they said. You know like going through a lot of the founder dating like how do you know when it's, the right fit? You know they come from different backgrounds, every different age like that, you know how do you kind of like take a tie, breaker approach to having conflict, and you know i realized that i was just incredibly grateful when you, when you're when you're working with someone where you just have implicit trust and alignment of world view and values, and you can just have very direct conversations.

It just meant we're able to move so much faster to just get out of each other's way when and know how to also which happens in every relationship just constructively work through disagreements as well.

So that was kind of like one of the first kind of like highlight experiences, and you know second thing is for us like one of our learnings of just finding product market fit and that you know the fact that it's.

Never just it's, it's. Just it's, never static. You know, you know it's. Kind of you know it's, not a binary outcome. Where you don't have it, you do have it and it's locked into product market fit forever, and ultimately it's.

Markets are always evolving. There's more and more incumbents, coming out to markets and customer needs change due to regulation or cultural fads, or coronavirus coming and changing just many many things into how people live, work and play uh literally a matter of weeks right, and so you Know for us we started out really doing one thing, which was employee onboarding.

We saw that we'd, seen this major gap, largely in my experience at general assembly, of seeing hyper growth and an organization not having you know really being reliant on spreadsheets, and so i had this thesis that every you know, google sheet, that's powering a workflow within an organization is a sas app waiting to be built, and you know it's kind of right click at this person like hey, like luke's, starting on monday, like it's Friday, it's, 6 p.

m. Where's, the laptop and then you don't hear back and there's, no reporting, and there's. No like dependencies. We're like great. This you know this seems like a really uh, really big organizational problem that is repeatable across many different types of organizations that we think we can develop software for – and you know it's, the same source code that can just be, you know, repeated Out and deployed virtually across to many different customers, and fortunately we were right, and that was our first kind of iteration of sapling for the for the first couple of years.

What we learned by just staying really close to the market – and you know, i think, just really helpful – andy just being a tremendous product manager and managing engineering team, and i think my background being in hr uh actually before starting uh sapling was that we just again Had a had a view and it turned out to be right, we kind of took a shot on seeing around a corner and where the market was going, which was you know, there are companies that are, you know, bigger than you know, kind of a hundred employees.

They've, gone global and so solutions that are great in market, like you know, zeniths or augusto or peos like just works, are just no longer a good fit, but equally they're, not at five thousand ten thousand employees.

They don't need something like work day with all the bells and whistles on the budget, and so they're. Looking for you know that gusto, like user experience, that ease and simplicity, but you know with more bills and whistles without the price tag of workday, and so we ultimately took a bet of building out really this end-to-end platform and, ultimately, to do that.

We require a lot more capital, but you know that took us an extra year or two to build out and really become the dominant and now default people operations platform in the middle market. So i think companies between 100 up to a couple of thousand employees and um that's, been a tremendous journey and the back of last year was uh.

You know a number of conversations with andy and myself. I ultimately realized that you know, for the next step in my professional career was really excited to go onto the investing side and uh. You know had also been and saying that you know i speak with a lot of entrepreneurs now and i've.

Struggled for a long time myself, it's like do you, take a concentration or a diversification approach to being an entrepreneur, and it sounds like from you even like you obviously got kind of irons in many fires of kind of you know, building multiple Different um, you know passive income sources.

For me, what i realized is that you know i i'd, really just been really hedging everything on building this tremendous company and uh. I was and was all in, and i think for me both personally and professionally, was really ready to graduate to the next step.

In my career of you know, taking that step back building out a platform that enables creators – and ultimately i'm successful. When i can, you know, fund and acquire or through our studio, you know help hundreds and thousands of makers and creators and entrepreneurs all around the world focusing on sas.

You know unlock their potential and dreams as well, and so we actually have been a ceo uh transition. I went from co-founder and ceo to just sitting back now, transitioning operation out of the business and now very active on the board.

Okay and then my co-founder andy at that point, moved from a c-o-o role across into a ceo role and also joins me on our board. Okay, very good, so sapling is still alive and well you're. Just um, you're transitioning a little bit, as you explained your roles, uh there and um.

I actually actually think just on that point. I actually think, and that kind of comes to my my view, which you know maybe a little bit provocative as well – is that uh, you know, i think, a lot of founders they get to this level of success where they and success.

Maybe let's, put some like a wrapper around that, but that's, go to market like product market fit and then go to market fit. So it's. Not you know it's, not all about the team. It's really about this, like institutionalized codified process where you can substitute any founder or any ceo into the business yeah, and i do question of like i speak to a lot of a lot of founders, who you know are six seven eight years In and just feel so trapped in this business and deeply entrenched whether like, if i walked away from this business, like you know, i i ultimately am the business like we couldn't, be able to raise any more capital, and i sort of think Man, that's, that's kind of crazy.

You just like you've, just designed this, like mousetrap, where you're at the very center, and you've designed a job and you can't find your way out of it yeah. I think that's, a great point, you know you kind of are describing the uh e-myth um.

You know the popular book. The e-myth right is, is being able to build a system that um that the business kind of runs itself right. You're, you're, not working in the business, but more working on the business is what it talks about a lot.

But but i agree, and maybe for listeners um i've talked about a few times. Building sort of those standard operating procedures in in particular, i talk a lot about for building um niche sites or or building blogs right being able to get all the content writers, the editors all the right people in place, so the business essentially runs itself, but you're, of course, talking even a step further, where you can then completely take a step back because you & # 39.

Ve got a new ceo or a ceo in place that is operating it completely, and you now have time and the ability to focus on other areas. Sure, as i said, i i don't have an answer on this. It's. More just kind of like bringing bringing your question to to you and everyone today, but it's kind of you know.

I think we start. We started idolizing these idea to ipo founder ceos right like the aaron levies of the world. Right whereas like this is, you know, edge case stories of like, and you know they're in the business 8, 10 13 years, and i just kind of think look from a number of dimensions like the skills that are required to start a business And go zero to one one to five: five to ten, whether that's, an arbitrary log of like a scale of 0-10 – or you can put you know millions of dollars of revenue behind the the numbers there as a unit of measure.

But i question you know what both from a founders like career progression of like going and just like, taking the skills that they've, learned at each stage and then going bigger and faster on a the next idea that they may have um as Well, as both the creative value creation in the business, you know it's basically saying i'm, the only and the best person in the world to go and unlock the value for the next stage of the journey, and i just Wonder like both for many founders that i speak to it's like look, you know for you, it's.

All about the you know there's, two ways that you're capitalizing. Here, um, you know fiscally both your income annually and bonuses, but then also the value of your stock, and hopefully the value of your stock is much greater than any income.

You're going to be taking down. Well, if you care more for that and agree with that, these you know, could there not be other professionals that you could bring in to sub you out who can actually grow the value of your equity holding in that particular business, much faster and with much less Risk than you could meanwhile, and in like in parallel, you could then also go off to your next thing and, as i said it's, just it's, a it's, a it's, a view Of the world that i know many people will not agree with, but i'm saying that i have to start spending a lot of time over the last year and you know we'll.

We'll, see how it plays out for me in that yeah is to come, yeah absolutely, and it i mean that dovetails in pretty well, obviously with what you're doing at bloom vp, because in a way you can provide that Opportunity for a lot of founders for them to take a step back from their businesses or to take on additional investment or sounds like a lot of different areas that you can help out with and kind of fulfill some of those roles for those sas founders.

So let's. Talk a little bit about bloom, vp um. How long ago did you start it? I? I know you mentioned, i think just in the last year, but you know kind of where are you at in the business uh and what sort of sas companies are you looking for? Is there a certain size? You know again, my audience is: i would sort of target as the micro sas founders right that i don't know what that number is exactly, but it's, certainly not um people that have gone out and raised hundreds of millions Of dollars right it's.

It's. Solo led founders. Are you looking at those types of smaller deals? Are you just more interested in somebody that's already got the 10 million dollars of funding and you're going to help ramp them up from there? You know one of the most interesting sas companies, at least in the seo.

Space is ahrefs, they have been super successful and i've, been really impressed with the marketing that they've done to get themselves to where they are, and one of the reasons that ahrefs has done so well is, quite frankly, because Of the quality of its tool, so the features that it offers are really useful for somebody that's, trying to optimize their site uh, you can do a backlink analysis and even do a backlink gap analysis to see what links your competitors have that You don't have, and that is one way that i've, used the tool to go in and see.

Okay, what links does competitor a have that i don't have so that i can go and try to acquire those similar links. In addition, ahrefs actually has a free version of their tool called webmaster tools, and so, if you're, not willing to pay for the full suite that ahrefs offers, you can actually use their webmaster tools to get started and you can still do a Backlink analysis, you can do a keyword analysis and then you can do a full site audit that runs on a weekly basis for your own site, and so you can start to see.

Okay, are there any errors on my site? Are there any keywords that are trending in the right direction, and maybe i should be paying more attention to what are some new backlinks that i'm? Getting anyways ahrefs really is an example of a sas product that is doing really really well in the seo industry, and if you are looking to optimize your sites, you may want to consider using their free webmaster tools over at ahrefs.

com yeah, all great questions, and i'll um, so i'll touch on the size of kind of like the qualifiers that we look for, and we get really excited by. You know that the entrepreneurs are inbound to us to discuss partnerships, but you know i i'd love to say that we had this.

Like really thought out. You know three-month launch plan uh, you know it. Just didn't, didn't happen like that. The the whole way that i you know i described kind of finding product market fit and in this sense the product isn't a software product.

The product is actually a platform of services and capital uh products, and you know effectively through a venture capital and a private equity fund and then a design, agent, design and and growth marketing agency.

So the way that we found product market fit was very organic. In the last couple of years you know, being and kind of the story actually goes back several years ago, now being an immigrant founder into the united states.

You know i kind of landed here from you know: a reputable school in australia and reputable employers, but i'm sure many of your international listeners will know it's kind of hard to cut through the noise there'S just so many amazing uh candidates, looking for roles all and with a lot of experience, and so you know whether it's roles, whether it's, capital as a founder and so cutting through that noise.

You know i just really kind of hung to with this community. They called the aussie mafia, which is other successful entrepreneurs out in uh out in the bay area and uh. You know through that started very slowly and surely building up my network when uh.

You know in the first couple months when i landed – and i was just literally living for three months on uh on the couch of my co-founder – annie's house fast forward a couple of years and you know sapling it obviously started growing.

Its presence and profile in in the community – and you know by proxy of that, as ceo out very active in in the community um, you know – i'd, also had the fortune of starting to build out my presence as well, and a lot of People started introducing new or sort of first-time founders, or, you know repeat: founders were new to building sas products, focused on future of work or b2b sas and would say like hey, like i'm looking to get advice on, you know how to run A sales team or how to think about building product or you know, um, you know even all the way back to like how do i even like valet, and do like market testing and get your first 10 customers, and so i i would just absolutely love that Experience, you know these were you know, found as far more remarkable than i that i had the opportunity to you know actually help on on their journey and so over time that mentoring became a little bit more formalized i mean you know advisor and then i was Very humbly able to participate as an investor into some of those companies as well and okay.

As i said, it was really just this stair-step progression of you know, just by me, just being really myopic and focused on just trying to build and be the best leader to my team possible and be the best ceo in woods and pub and kind of externally.

At sapling, i then was able to kind of start uh investing in more companies that, at the start of this year, ultimately then became a fund that we uh. We we built out and um. You know bloom capital and that's, got a couple million dollars that we actively invest in pre-seed all the way through to series a companies um.

You know we're writing checks there. You know as low as 25 000 up to a couple hundred thousand dollars. Um and you know our goal. Is we don't really position ourselves as a large institutional venture capital fund? You know our focus is really by founders for founders, just adding operational expertise on our on our uh.

You know on the cap table of these these companies and i think we even have a slogan somewhere on the website, maybe of like you know. We aim to be the first call at two in the morning on a sunday when shit's hitting the fan, because you know ultimately, where founders we don't proclaim to be venture capitalists where founders, who invest in other amazing early Stage, companies and – and we do that across a couple of areas which is fintech digital health and then anything related to future of work which could be you know as broad as horizontal software uh.

You know horizontal or vertical solutions, developer tools, audio video tools, communication collaboration. You know we get really excited by those types of tools just because we know you know again how to really help founders and ceos in the driving seat fast forward.

Another couple of months it's, kind of back in, like q1 q2 this year again just kind of taking it a step back and, as i kind of had found, you know a little bit more time. Freedom coming out of an operating role at sapling and just kind of looking around you know, theses of where markets were moving to next in the next five years.

I kind of have this this view of look it's, never been easier than ever before to create a sas company right right from the technological perspective. Even five, ten years ago it's, never been easier before and i'm sure.

You even experience this as a software founder as well right, you can go online, you know there's, free open source code. You can go on to great platforms, top tower 11. io. You know up work. Where have you find an amazing? You know engineer that's relatively affordable part of a couple of weeks and then bank you & # 39.

Ve got an app out into market, so we're starting to see this explosion of on the supply side of new products coming to market and again just because markets are getting so big and can end user consumers.

Both individual consumers or enterprise are now becoming a lot more accustomed to buying software uh. You know through a sas deployment model right. You can now very quickly scale up these. These businesses and oftentimes you'll, hear these kind of you know weekend hackathons where a product was shipped at 11 p.

m, sunday night and before the the next weekend. They're already at a couple of thousand dollars of mrr and they don't even have a you know, any you know an incorporated uh. You know backing setting like a c corp in delaware, and so what we my thesis is, you know it's, never been easy to create companies, it's.

It's, also relatively easy to then get it up to 83k of mrr or a million dollars of error, but also because there is now just so much noise like if you're, taking one of those given markets, whether it's a you know, project management tool and you're.

Going up against right versus smart sheets versus asana versus monday.com versus to do is like these markets are so big, but they're now so fragmented as well. So you can kind of chip away at niche segments of the market, but if you really want to kind of unlock true scale and go from like 1 to 10 million of error, 10 to 50 50 to 100 million of error, you know that'S a it's, a very different type of business, that's being built and oftentimes.

We kind of see two different two different areas. One is that these businesses are being bootstrapped and they're oftentimes. It's done by technical founders, who have said. Look i'm just going to keep building out features because that's.

What i know how to do best. I'm. I'm. A creative i'm, an engineer and just having to apply that to software programming, and so they just keep growing revenue in the product and usage through adding more features.

They eventually kind of stall out, like the growth rate like plateaus a little bit and all they say you know what i just want to keep like. I don't want to be focusing on devops. I don & # 39, t want to be going back and building new features, or i don't want to be like sitting inside of google adwords and doing marketing.

I was going to be waiting features, and so we realized that there's. This growing kind of populace of these amazing businesses that have found product market fit, and these are sort of niche verticals.

They've got you know, uh. You know starting to get the semblance of a repeatable go-to-market engine, but ultimately it's. You know founders of the helm that want to go after their next project or they're happy to stay on board as a founder, but they just really want to bring on uh.

You know a partner to help with the growth stage. The next chapter of the business growth being either capital and also skill set as well, and so that was really the kernel of what uh you know enabled us to then roll out uh bloom equity as a as a buyout fund, where we take a minimum 51 Controlling interest of the company founders can either stay on board and we, you know, support, building out an amazing team alongside them or if founders want to go off to their next journey.

We are very, very happy to support them through a transition program and uh. You know whether that's 60 days 180 days. You know whatever works, we um, you know we transition founders out, they take some cash off the table and then it's out it's.

Our team on the back end and then takes that business and the customers continues investing in product and development and operationalizing the business and then ultimately growing it from circa a million dollars of arr up to five million dollars and beyond yeah super interesting um.

So how many equity investments have you made so far through bloom, equity or bloom uh? Would you call it uh capital yeah, so it's. Blue invented bloom. Venture partners is kind of the overarching uh platform that we've built out and then within blue venture partners.

We've kind of. We have three products that we offer today within our suite. So there's, bloom studio, bloom capital, which is our vc um and then bloom equity, which is uh effectively a buyout or kind of micro, private equity um through that venture, specifically, where we're still uh, we're.

Pretty excited to be kind of announcing out one of our first acquisitions here in the next couple of months. Um previously, i've, been involved in buying and selling and operating a number of small kind of sas applications as well, but uh yeah.

We're excited with the investors that we also have on board through bloom equity. We're uh to be writing and announcing out our first acquisition pretty shortly: okay, yeah, very good um. So so you're, getting going um.

How big is the team there uh that you have do you have an in-house team right now, um that you're working with and and um yeah. Just talk a little bit about the organization there yeah, absolutely so.

The team of kind of part-time and full-time folks today is around seven and uh. You know that that's kind of growing. As i say, we've been live out in in market only in a matter of months now um. You know what's most exciting to us, and i think one of my certainly one of my approaches to building software businesses to uh to the end of my career is just taking advantage of uh.

You know ethical global talent, arbitrage um. You know i kind of, as i said before, i spent you know i kind of built this narrative in my mind that you know in order to build a really successful software company, it was of utmost importance.

It was imperative to get to san francisco. You know if you want to be an actor you've, just got to go to where that industry is, you've got to get out to la right, and that was this like this. This story that i've been telling myself, and so you know, spent a lot of money and a lot of years trying to get out to san francisco to do that.

But i think today there's. Just such a decentralization and talent is borderless, and i truly believe that – and that was a notion that we embraced pretty early on. Actually after the irony of kind of arriving in san francisco is that we then started hiring and saying wow.

We can get really really great talent here, wow it's pretty expensive, and we can also get equally amazing talent just down the road in in denver or in austin or where have you when it's right or less expensive, or You know like we actually want to keep operations running like 24 hours a day, so we can actually like have our senior product managers here in san francisco that have got years of experience of building.

You know hr workflow sas, but we can then build out an engineering team and sort of you know have that at a way that's running 24 hours a day by kind of by locating in san francisco and then in hubs across india and Pakistan and then ultimately up in in vancouver as well, and so that's, saying that you know we're very excited to adopt that model at bloom, both internally and with our companies that we we support through either being a minority Investor or ultimately, an owner through it through acquisition, um right.

You know we kind of see over time like for us to actually run a remote operations. So as we start continuing as we continue to now build out our in-house teams, you know whether it's, that's in philippines, in singapore and canada.

You know i'm, really excited to uh to be building to be hiring talent all around the world kind of from day. One focus not only on our brand and kind of you know what makes us unique, but also being very focused with the team around making sure we've built the infrastructure that and that enables us to scale globally from day one as well and Uh and i think that's, saying that you know again with making acquisitions, you know just kind of understanding: does it does the entire team need to be working in a you know, a 30 000 office space in city x, or you know, can We let go of the office and everyone actually kind of work out of the office two or three days a week or out of a wee work or some sort of like subsidized office and then work remotely.

I think there are just you know again: we're really at the tip of the spirit in terms of the shifts. So we're. We're, going to start seeing um, i don't, think post covert, we're. Just going to you know, fully revert back to what work looks like in the knowledge economy, circa 2018, and i think we've like fundamentally into this next revolution and cycle yeah.

I 100 agree with that. I think um yeah, just so many different ways that we work you know via technology and and remote work and and companies realizing that they don't have to pay for office space for hundreds of employees.

Potentially, you know um. We've made it work this year uh. So i agree there. There's. Gon na be a fundamental shift. There um, so let's, maybe walk through a quick thought exercise. Let's. Imagine that i wanted to partner with bloom.

You know on link whisper, you know i built link whisper to a certain point, um and i'm ready to take a a little more hands-off role. I, in terms of i want to bring somebody in like you guys to help me out to grow it and take it to the next level um.

What would you be looking at in order to make that happen? I mean um and i guess what i mean by that: what operationally would you want to come in and do um, and maybe we can talk about that? Maybe specifics like how would you look at link whisper or you know any other sas product that you might have and think about? Okay, how are we going to take this to the next level yeah, absolutely so yeah? We we have some criteria that we we try to kind of keep at the very top of the funnel that enables us to um.

You know be really tight and focus on the types of companies that we want to work with, um, largely because we think that you know that that engenders like the best type of of sas businesses um, but also it just.

It really drives off the operating experience. That myself and and our team also has a blue venture partners which, to your question, is like okay, great, maybe it's. An existing management team, like doesn't, have experience or a skill set in a certain area.

That just so happens to be where we've sent it, and you know collectively across our team we've got you know, 50 to 100 years of experience from our operations team that can jump in but, broadly speaking, like we are Looking for software service businesses doing anywhere from two hundred and fifty thousand dollars of annual recurring revenue or error, um up to now slightly north of two and a half million dollars of revenue and again those businesses can either be.

You know we kind of see them in really uh two legs on the stool there um, you know one is like these just beautiful uh, you know bootstrap businesses, maybe they haven't raised any outside financing. You know, maybe it's.

Just a you know: small team, that's kind of built building out using customer revenue as the financing source there. You know. Ideally, they're kind of they're profitable and, as i said, whatever the motivation is, they're, ready to kind of come up with it's like a co-founder, leaving both co-founders want to leave.

They want to bring in some new partnership. They want to take some cash off the table kind of de-risk, their entrepreneurial endeavor um. You know that's like where we come in, and the second alternative is is really where we see um.

You know they're, not the lifestyle type businesses. These are actually businesses that have been birthed from day, one or ultimately have gone down. The vc puff, where you know they've raised venture capital.

Typically, they've done like a family and friends round, or they've raise the seed round of like institutional venture capital. Maybe they're, like you know, three, ten million dollars uh raised and ultimately something has just happened in the business right.

The original hypothesis, hasn't ended up uh. You know stemming out to be true that they haven & # 39. T got repeatable uh, you know profitable go to market across the different channels. Um. You know there's, something that happens at a co-founder level.

They lose confidence of the investors and also what happens is, and this is like the cycle we've now seen so many times is that growth rate really starts to wane below the floor. The requisite floor that is required to raise follow-on growth, venture capital, and so the these businesses kind of get like stuck in this kind of like no man's, land where they've already raised venture capital.

They're, not necessarily profitable. They've kind of got like a ticking timer on them because they & # 39. Ve got like a finite amount of runway because, again, their cash flow negative every month, um they don & # 39.

T necessarily have the means to raise additional capital from uh from a vc source. Since that's, where they kind of come in to say great, we can then partner up, and ultimately you know recognizing everyone around the table needs to recognize that they're, just taking a very different direction for the next.

You know act two of the business and they're, not going for kind of the hyper growth model of growth or costs, and they'll just be additional rounds going through the alphabet of kind of series, a series based say: a Venture capital – instead they may be – you know, instead of going for a 150 to 300 percent year-on-year revenue growth.

Maybe they're just settling for 20 to 50 year-on-year growth, so they're kind of the two different profiles of businesses that we see um, that they're kind of coming to us and that we think we're really, we are a great fit for specifically like once.

We have those conversations. What we're looking for is a you know: there's, a couple of things like one, and we detail this on our website as well. One is it: we just want to make sure that it's, a really sticky product and it's.

A you know. We're kind of we're selling um. You know painkillers, not vitamins. So what i mean by that – and this is applicable across like whatever product, whatever type of entrepreneur – you are whether you're selling software, where you know whether you're selling.

You know physical, apparel and magazines um. You know you want to be selling something that's, so indispensable to your end, customer that they, you know, ideally, are using your product multiple times a day or a week, and it's, a must-have, not a you know, and nice To have like, if it's, if it's optional, they'll pay for it.

If they & # 39, ve got a few just like dollars of discretionary income left over at the end of the month. You know whether they're, an individual consumer or an enterprise, so we always want to make sure that it's like it's, really like again, why we love workflow software so much because if an organization realizes that They have a need and they buy a software to come in.

They you know, connect all these integrations across to other different types of software as well. They add all their different users in they & # 39. Ve got all of these data. It becomes very, very sticky within an organization and it's very hard to then just rip out that software and go to another incumbent.

We also like to see you know: high net dollar retention, meaning you know when you sell to a you know when you sell one dollar of revenue to a customer in year, one ultimately in year, two and year, three, that dollar can just continue, compounding and actually Growing, so not only is that customer staying with you year on year, but maybe they're, adding additional features.

Maybe they're, adding additional users and paying for more licenses as well, and so that's. Another area where, even if the organization doesn & # 39, t have supremely high growth rate visibility, new customers coming inbound to them, the existing customers, they found a hook or a lever where they can continue, then uh, adding uh, increasing monetization of those customers.

So for their kind, i guess like some of the criteria that we we look at in terms of how we then partner up and if we say like hey, we're, a good fit like this is a this is a great product. It's, also a great business.

You know it's uh. You know it's great, but here's, how we can continue on the journey for the next steps. A large part of this is around. Go to market and that's. What i was saying before is that these entrepreneurs are just building such amazing product and technology, so they get product market fit right, what we often see and they get.

You know that zero to a million dollars of ar right they get that down it's, then the journey from one to two, two to five, five to ten million, where they need an addition. New type of skill set and additional capital come in and that's.

Where we come in and say: okay, you know brilliant the basics. You know, like understanding all that everything from different funnels from a you know: awareness conversion, retention of marketing, funnels sales, best practices, whether it's, a self-service online, only sales model through to a or a blend of you know a managed service where you're, actually speaking to someone over tele sales and doing like an inside sales approach.

We kind of just go through the entire revenue motion of the business, from marketing to sales to then post sales, handoff support, customer success and really operationalize that leveraging decades of experience that our operations team have, and you know our kind of view there is it.