Capital Efficient Entrepreneurship from Canada: Fusebill CEO Tyler Eyamie (Part 7)

Sramana Mitra: If you can finance this with bank credit lines and you don’t need a lot of equity financing, why would you dilute yourself?

You now have a company that is at $10 million ARR and this company is reasonably conservatively financed. You’ve put in about $10 million in investment to get to $10 million ARR, which means that if you were to sell this company to a larger player, you would get a very nice return on investment because it’s not an exorbitantly capitalized company.

Why then would you raise more money?

Tyler Eyamie: It sounds like you have been sitting in my boardrooms for the last couple of board meetings that we had! You are right on that.

One thing though for just the listeners is that when you raise venture money they are expecting a return. VCs place bets and for every ten bets that they place, they need one or two that are going to return their entire fund. They need three or four that will return something, and the rest are just completely written off. Investors on our side are seeing the company growing nicely. We are on a nice path because we had invested some other growth levers too from a go-to-market perspective late last year that are showing great signs.

2020 is the time to go out and do that larger equity raise and take this company to a $100 million-plus IPO. We’ve been at it for nine years and that’s a pretty long grind for anyone that has been in a startup for that long.

It was time to potentially find that strategic partner who can help take up our vision to add a little horsepower behind it and fill up our pockets a little bit nicer. These are the exact discussions that we are having right now in the Fusebill boardroom. 

Sramana Mitra: If you were to choose your perfect acquirer, who would that be?

Tyler Eyamie: There are a few logical acquirers for the business. First, they can be anyone from the large payment companies who are looking for software like Fusebill to create a nice moat around those payment customers in highly commoditized space.

For example, some of the large payment processors out there like Chase or First Data. Those large processors are always looking for ways to keep their customers and get their customers at a higher margin. Software like Fusebill can create a nice moat around those customers.

Second, they can be large financial companies from a back end finance perspective who don’t have an answer to billing in their offering. They could see the potential in a platform like Fusebill to not only help them enable more sales deals but also provide more value out of their existing customer base. Billing brings those companies much closer to their customers’ end customers. All the data can then be pumped back into the ERP system.

Third, there are others on the CRM and front end of things out there like Salesforce and HubSpot who are starting to invest more in ordered cash and configure price quotes. Billing is the logical glue there to bring CRM into billing to the back office. There are a few prongs there.

Fourth is the e-commerce players out there. The subscription billing and all of the ledger moves that I spoke about earlier is difficult to build and consider. Some of the larger strategic customers thought about building it themselves, but it would take a few years with the existing team that they have. A platform like Fusebill helps them get to market with an answer much quicker.

Sramana Mitra: Very nice story. I enjoyed listening to you. Thank you for your time.

This segment is part 7 in the series : Capital Efficient Entrepreneurship from Canada: Fusebill CEO Tyler Eyamie
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