Money July 3, 2020

Got approached by 2 VCs (and said no)

Aurelien Amacker @systemeio

They saw my post on IndieHackers announcing that had just passed $2M in ARR and they contacted me by email

It feels good for my ego but I am not looking to raise any money
Actually I explained my reasons to one of them:

  • we are already profitable
  • we are growing fast without any significant investment (6-9% month-over-month MRR growth)

He pretty much agreed :)

  1. 12

    It doesn't seem to be stopping you from making a profit and maybe I'm being dense but I seriously can't figure out what this product/service specifically does...

    1. 10

      Same. After looking at their website I still have no idea what this product actually is.

      1. 4

        Here's a fake review with some details about what the product actually is:

        TL/DR: This post is an advertisement :)

      2. 1

        My goal is to convert visitors on this page to free trial users.
        This page converts twice more than a classic Saas page
        (I ran this test twice, had thousands of conversions)
        Again, in the English market we will test a new design with features and stuff

        1. 3

          I suspect it converts well because you're sending there visitors that already know what your product is. If it's affiliate traffic that makes sense.

          1. 1

            Yes that's what I think too. ;-)
            This is why we will split/test different versions for the French and the English market
            I see you are Italian, we started getting many Italian customers a couple of months ago so we launched an Italian translation of Today we have about 100 customers from Italy, each day we get 5 to 10 new free trials, and we don't do anything with these leads. Do you know many online marketers in Italy?

            1. 1

              Yeah sounds like a good idea. Not many, I’m bad at networking haha.

    2. 1

      I know, I wrote about it on IH. This homepage converts twice as much as a classic Saas homepage (14% Vs. 7%)
      BUT in the English market (where we are starting out) this strategy has its limits so we are working on a new design with features and stuff, it'll be up in a couple of days

      1. 1

        I've no doubt it converts better but surely a lot of the conversions will be sheer curiousity and not necessarily interested in what the product is? So the visit to trial conversion might be better but the full sale conversion might not be. I would at least have a link next to "Pricing" to explain a little bit about the product.

        I personally am about to launch my first online business yet I wasn't convinced enough to put my email in.. If I'm similar to your target market and I was put off by the lack of information that can't be optimal.

        I assume your affiliates are pre selling the product so that will help, but to someone who finds your landing page organically the conversion rate probably won't be quite so good.

        1. 1

          Look, everyone has an opinion about everything, but numbers don't lie. This page converts 100% better. We are gonna do $3M in revenue in 2020. That's all I know

          1. 1

            What’s the source of the traffic?

            1. 2

              Affiliates (3/4) and organic (1/4)

          2. 1

            I'm not telling you to change the landing page though! I think you should keep the exact same landing page but have a link with more information for anyone who falls through the net or isn't pre sold by an affiliate. A certain % of your visitors WILL be confused and put off by your site, that's for certain. I think that very small change will undoubtedly increase conversion rate for those who are totally baffled and could make a significant increase to your revenue. I see no reason the link will reduce your end conversion rate so surely it's worth testing at least? It's easy to say "ah I'm making loads of money, clearly I'm doing everything right" but when a change that would take literally hours to implement could put an extra 6 figures in your pocket it's worth exploring.

            Even after talking to you I'm still sitting here with no idea what your product does and I'm probably your target market, aren't you interested in having me?

            1. 2

              I agree we need to try a new design, this is why I wrote "we are working on a new design with features and stuff, it'll be up in a couple of days"

              1. 1

                Ah ok, I'll check it out.

                Congratulations on your successful venture!

    1. 1

      They wrote from email addresses of websites that are perfectly legit so no, not scammers

  2. 2

    You're generating $2M ARR with a landing page with one heading and an email signup...???

    Please share your secrets.

    1. 1

      This kind of page converts better than a classic Saas homepage. Since our affiliates send traffic to us it's important to convert it. But that's in the French market where we have a ton of affiliates and they do a lot of teaching. In the English market we are new so we'll put a nicer, more classic design, with features and everything

  3. 2

    How do you get so many affiliates to promote you? I know your % payout is high but how do you get so many people to promote you on their blogs, Youtube, etc

    1. 0

      I'll be doing a presentation for a virtual summit where I explain how I built an affiliate program that brings in over $200,000 per month in revenue you can subscribe for free by clicking here:

  4. 2

    He pretty much agreed :)

    Hah. Excellent work!

  5. 1

    well if it is true - you have missed out on an opportunity to early liquidity. They would have valued the company at $20m-$30m and as part of the funding you could have negotiated some cash for yourself too. Otherwise your exit will be only at 1.5 times the revenue at best. Another question is how would you scale it from $2M to a $100M company? Indie hacking doesn't mean indie exiting. At some point you have to look for a home run than singles and doubles.

    1. 2

      First of all, yes it's true, when VCs see a company growing fast they want to know more. We went from 0 to $2M in ARR in 2 years so I guess we check this condition. You can see our revenue on Stripe on IndieHackers (it's actually only 2/3 of our revenue since we get payments on Paypal)
      A competitor just sold for 12 times the revenue so I don't understand how you can think that we could sold only at 1.5 times the best
      Other than that, in 6 months to a year I'll be making $100k profits per month while owning 100% of a very valuable company so I don't see how you can beat that

  6. 1

    Congratulations! This is great.

  7. 1

    What you have is a luxury problem, a lot of people would be happy to have. Keep up the good work! It´s now obvious that you are on the right track!

  8. 1

    I have no idea what you're doing, but congrats. That's some serious flexing right there. :D

  9. 1

    Congrats Aurelien!
    I worked as a digital consultant for big websites, we did lot of ab tests with a huge volume of data. Most of the time the simple old school pages were converting better than the fresh modern slick design .

    1. 1

      Yes totally. And again, we will put up a new design next week that we'll be nicer and explain our main features. But yes, a very simple "squeeze page style" home page will always convert better than a classic Saas home page

  10. 1

    Congrats! Must feel amazing.

    As others mentioned, it's a confusing landing. I personally don't sign up just because, but hey if that's what's working for you...

    1. 1

      Probably affiliate traffic in which case it would make sense

  11. 1

    I remember the Gumroad story:

    • the founder raised like $10M and started hiring like crazy and burning money
    • kept growing at the same pace, fired everyone and stopped burning money
    • kept growing at the same pace, now left with a very profitable business bringing in like $100k profits per month (VCs lost interested and actually wrote off their investment!)

    I think raising money is really worth it only in some cases (maybe a minority)

    As an investor (I bootstrapped my company) I feel that the more money you invest (or the faster you spend your money), the lower the return on investment

  12. 1

    Awesome! great work! How do you drive traffic to the site?

    1. 1

      Mostly affiliates, so they promote us pretty much everywhere: GG ads, blog posts, Youtube videos, social networks... we get around 600 new leads per day and about 300 free trials

      1. 1

        How did you get them to promote you? It’s really hard to approach influencers for me. Maybe I am doing it wrong, but they always blow me off.

      2. 1

        Nice. One question, what do you meant by "leads" here? Is it page views?

        1. 1

          leads are email optins

Recommended Posts