Competing with Blackline: FloQast CEO Mike Whitmire (Part 7)

Sramana Mitra: There are two conditional clauses in there: 45 years old and having done that before. I would vouch to say that if you had done this before, it wouldn’t matter how old you were. If you had credibility and track record of having done a successful venture before, anybody will sign a term sheet. That’s the problem in the industry – first-time entrepreneurs have it much harder, which is understandable.

Mike Whitmire: The other ironic part of that is, I was thinking, “If I had a successful exit already, I wouldn’t be talking to you right now because I would have funded my own company.”

Sramana Mitra: That’s not necessarily also true. Serial entrepreneurs also raise money and do it with venture capital. We are now in 2018. A lot of serial entrepreneurs are in the market and they’re doing it again and again. It’s addictive. People who are entrepreneurs love to be entrepreneurs. After this Polaris round, did you raise any more money?

Mike Whitmire: We did raise more money. We used that to continue to enhance our product. We hired more engineers and hired more on the sales side. We built up a larger client base. I wasn’t actively looking for money but by this point, this was late 2015. Blackline had gone public.

Sramana Mitra: Now it’s very easy.

Mike Whitmire: They disclosed a market opportunity of $20 billion. Suddenly, I didn’t have to convince anyone that there’s a big market opportunity. I just said, “Go look at Blackline’s financials.” With that, people were coming all of a sudden to give us money. We were having meetings. I was able to be really selective. We received quite a few term sheets. Ultimately, we took on a $25 million round that was led by Insight Venture Partners out of New York.

Sramana Mitra: Where are you revenue-wise in 2017?

Mike Whitmire: We don’t like to disclose revenue information.

Sramana Mitra: How many people do you have?

Mike Whitmire: We now have about 90 employees.

Sramana Mitra: Is that all in Los Angeles?

Mike Whitmire: About 85 are in Los Angeles. We have a small office in Ohio for setup and support purposes for East Coast time coverage. We also have one remote employee. She works out in New York and she’s on the business development side running some of our East Coast BD efforts.

Sramana Mitra: Otherwise, you’re all here.

Mike Whitmire: Right. About three months ago, we moved into our new office. It’s awesome to not be crammed into a tiny office anymore.

Sramana Mitra: Excellent. It looks like you are going to face competition from Blackline as they move down-market.

Mike Whitmire: There’s one more point that I want to reiterate that I thought would be helpful for your audience. The importance of having domain knowledge and being a domain expert within the problem you’re trying to solve is powerful. In hiring out our team, we’ve taken that to the next level.

We’ve hired accountants to really give that feel of, “We’re an accounting company. We understand your pain point.” For anyone founding a company within a specific domain, I encourage hiring people from that domain very broadly.

Sramana Mitra: It’s a very well-known phenomenon especially in fundraising. You need domain knowledge on the team. One of the ways to mitigate your disadvantages as a first-time founder is with intense domain knowledge. That gives you that unfair advantage that investors are looking for.

Thank you for your time.

This segment is part 7 in the series : Competing with Blackline: FloQast CEO Mike Whitmire
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