Bootstrapping from Belgium: iText CEO Bruno Lowagie (Part 6)

Sramana Mitra: Belarus is not your own division?

Bruno Lowagie: No, it’s not our own company. It’s a company with a subsidiary in Belgium. We pay the Belgian company but the people who work on iText are in Belarus.

Sramana Mitra: How has revenue ramped?

Bruno Lowagie: I believe that in 2011, we finished with $2.4 million. Then we switched to accounting in Euros. In 2014, we had €5 million.

Sramana Mitra: This is all self-financed?

Bruno Lowagie: Yes.

Sramana Mitra: Excellent. How big do you think is the opportunity? How big a company can you build on this premise?

Bruno Lowagie: It depends on which path we are going to follow. In 2013, we had various options. Option zero was “Get Out” – an exit. This was option zero because we soon found out that we’d never pass a due diligence—our companies had been growing organically, but there was plenty of room for improvement.

Option one was to “Milk It”. We had a nice business going on. We had about five employees and a nice profit. We could have continued being a mom-and-dad business until business would inevitably fade away. This was not in our nature. We’re more ambitious than that.

I’m skipping option two for a moment and jumping to option three, which is codenamed “Pedal to the Metal”. This involved talking to VCs and other investors. We asked these investors, “Suppose that we worked together, what would you suggest us to do?” We made a checklist based on these discussions, but eventually we decided that option three wasn’t for us either. I like riding a bicycle but going with a VC feels like, “I’m going to give you an injection and next year, you’re going to win the Tour de France.”

So we went for option two, which is the ‘Drive it’ strategy. We took the checklist we made based on our discussions with the investors and turned it into a priority list. We are now executing that list. We changed the company structure, we installed a board of directors, and we changed accountants and appointed Deloitte as the auditor. We also started hiring people. In every new board meeting, new hires are being approved. In a way, we have been funding our own Series A in 2014. This required plenty of change and our EBITDA dropped from 62% to 44%. We’re still highly profitable, but we investing more in further growth.

The goal for 2015 is to have €6.5 million in revenue. Looking at the revenue of the first quarter of 2015, I see that we’re on schedule. We’re ready for our Series B and although we’ve had many offers from VCs, we have sufficient  capital in our companies to self-fund this next round. It’s really rewarding to see how the team that is being established since 2014 has managed to help us work through our business checklist. It’s not an easy journey, but it never ceases to be an exciting one.

Sramana Mitra: That’s right. The riding a bike and Tour de France is a good analogy.

Bruno Lowagie: The same goes for private equity buyers. Today, if things go down, we only have ourselves to blame, because we’re the ones at the helm of the company. I know of a company that was acquired by investors and the original owners saw the ship going in the wrong direction, but much to their frustration, they couldn’t change its course because they were no longer in charge. That’s one of the reasons why Ingeborg and I didn’t really go for private equity, although we did receive offers after winning Deloitte’s Technology Fast 50 in Belgium.

We changed the company from an LLC equivalent in the US to an NV, which is the equivalent of a corporation in the US. An NV in Belgium has the obligation to have a Board of Directors. We were in the Board but we asked somebody who has retired from business to be our Chairman.

This segment is part 6 in the series : Bootstrapping from Belgium: iText CEO Bruno Lowagie
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