055 Nathan Latka - SaaS Funding: A Better Path for Founders

Have you weighed the pros and cons of bootstrapping vs. VC funding for startups? Concerned about valuation trends or potential down-rounds? Explore the essential tradeoffs as Jeff Mains sits down with Nathan Latka, founder of Founderpath, the place where bootstrap founders get capital without having to give up equity and provide a “how to” for founders to navigate these decisions so they can achieve and exceed their growth goals.

Nathan is the founder of Founderpath, a platform that has provided over $100 million in non-dilutive capital to 175 SaaS founders in the last 12 months. He is also a SaaS founder and champion of the people, helping bootstrapped founders achieve their dreams without giving up equity.

Key Takeaways

00:03:37 - It Only Takes One Breach To Kill Your Dreams

00:04:55 - Security Will Remain A Major Concern In 2023 And Beyond: Protect Your Monkeys

00:08:13 - From Flipping Burgers to the Lucrative Side of Recurring Revenue

00:10:44 - VC Funding Removes Optionality

00:12:38 - Win With Creativity, Not Money

00:14:25 - Constraints Compel Innovative Problem-Solving

00:16:20 - The Risk of Nondilutive Capital

00:18:39 - Founderpath Provides Capital Without Giving Up Equity

00:19:10 - A Lightbulb Moment After Losing Optionality Raising His First VC

00:20:34 - Founderpath Automates Everything

00:22:41 - A Perspective on Different Types of Founders

00:23:32 - How to Get Good Rates at Founderpath

00:25:31 - Your Investment Must Meet Your Payback Term

00:27:24 - An Alternative Way to Build a SaaS Company

00:28:04 - SaaS Open: North America's largest B2B SaaS Founder Meeting

00:30:48 - Listen To That Motivation. If You Cease Feeling That, Cut It, or Quit

00:33:57 - The Future Pricing Models of SaaS: Usage-Based Billing

00:35:32 - With the Looming Recession, Keep your Costs Minimal and Win With Creativity

00:39:37 - Worrying Doesn’t Get You Anywhere

00:41:47 - Exceptional Founders Work With Their Boards and Discuss Comprehensive Strategy

00:43:07 - Attention attracts money, energy, and everything else

00:44:00 - Focus on Creating Fantastic Tools for Founders

00:45:53 - The New American Dream

Tweetable Quotes

“Well, obviously the best time to raise money is when you don't need it.” - 00:16:00 Nathan Latka

“A lot of us hate losing, we'll keep playing a board game we know we can't win, just because we don't want to lose.” – 00:29:44 Nathan Latka

“You've got to dump something out before you can make room and fill up with something else.” – 00:30:11 Nathan Latka

“If you create something valuable, people pay you for it.” - 00:30:38 Nathan Latka

“I would encourage everyone to listen to that motivation. And if you stop feeling that, you've got to move on. You've got to cut that, you've got to quit.” – 00:30:46 Nathan Latka

“It is problematic when the business is driving you, instead of you driving the business.” – 00:33:29 Jeff Mains

“You can't deploy billions of dollars if you don't have billions of dollars available.” - 00:43:38 Nathan Latka

SaaS Leadership Lessons

1. It's best to raise money when you don't need it to avoid higher costs and dilution.

2. Principles matter. Profitability is significant. It provides options.

Constraints can lead to creativity in problem-solving, but many people are afraid to set them for themselves or their team.

3. Founder Path offers financing options based on net dollar retention, ARPU, customer concentration, and other factors, with terms up to 48 months at discount rates as low as 7.5%. Learn more here

4. The best strategy with non-dilutive funding is to lower your payments. Stretch the cash. The mistake is to focus too much on the lowest interest rate/discount rate. Negotiate the longest payback terms.

5. Avoid running out of money and always have multiple backup plans.

6. Security will continue to be a big topic in the future, especially with remote work and consumer/payment data.

7. Board meetings can be unproductive if members don't read prepared material and ask relevant questions.

8. Attention is key to business success. Get it! An audience creates an audience.

9. SaaS Plus with a heavy emphasis on usage-based billing is a growing trend in the market.

10. Mentors play a key role in founder success. Get one! Learn more here

Guest Resources

Nathan’s Facebook: https://www.facebook.com/NathanWLatka

Nathan’s LinkedIn: https://www.linkedin.com/in/nathanlatka/

Nathan’s Youtube: https://www.youtube.com/user/NathanLatka/

Nathan’s Twitter: https://twitter.com/nathanlatka?lang=en

Nathan’s Website: nathanlatka.com & getlatka.com

FounderPath (Website): https://founderpath.com/

FounderPath LinkedIn: https://www.linkedin.com/company/founderpath/

Resources Mentioned

Founderpath (Linkedin): https://www.linkedin.com/company/founderpath

Founderpath (Website): https://founderpath.com/

David Cohen/ Techstars (Linkedin): https://www.linkedin.com/in/davidgcohen

Icontact/ Ryan Allis (Linkedin): https://www.linkedin.com/in/ryanallis

Ted Elliot / Copado: https://www.copado.com/team

Mark Cuban / broadcast.com (Britannica): https://www.britannica.com/topic/Broadcast-com

Elon Musk (Twitter): https://twitter.com/elonmusk

Ed Catmull / Creativity Inc. (Twitter): https://twitter.com/edcatmull?lang=en

Functionfox: https://www.functionfox.com/

Michael Milken (Website): https://www.mikemilken.com/

Marc Andreessen (Twitter): https://twitter.com/pmarca

TechCrunch: https://techcrunch.com/

The Top Entrepreneurs Podcast: https://podcasts.apple.com/us/podcast/saas-interviews-with-ceos-startups-founders/id1023761733

Quickbooks: https://quickbooks.intuit.com/

SaaS Open: https://saasopen.com/

Slack: https://slack.com/

Bridget Harris / YouCanBook.me: https://youcanbook.me/

Snowflake: https://www.snowflake.com/en/

Small Fish, Big Pond: https://smallfishbigpond.com/

Russell Brunson: https://www.russellbrunson.com/hi

Clickfunnels: https://www.clickfunnels.com/

Ticket to Ride: https://www.daysofwonder.com/online/en/t2r/

HubSpot: https://www.hubspot.com/

GitHub: https://github.com/

Dallas Zoo: https://www.dallaszoo.com/#gref

Central Park: https://www.centralpark.com/

Heyo.com: