Venna Solutions

Don Mal had already lived through a successful exit before Venna Solutions existed. He had been running sales at a company in the same space that was sold to IBM for hundreds of millions of dollars. That experience gave him credibility with early backers, who were persuaded that he had a better mousetrap and knew how to build the market.

Venna was launched in 2011 and is focused on corporate performance management, which covers budgeting, planning, forecasting, and reporting across multiple dimensions of a business. Its customers, spanning financial services, food services, retail, and manufacturing, use the software mainly in the office of finance to measure performance and speed up processes like month-end close. The company started by raising capital from friends, family, and high-net-worth individuals, using a $25,000 minimum check size. Its first round was structured as a convertible note, and the first priced round included several smaller institutional and angel investors. Don has said the company later raised around $50 million in total across equity and debt, with a series C in July 2016 and venture debt from Silicon Valley Bank as its best partner.

By the time of the interview, Venna was approaching 350 customers and adding about 50 per quarter. Average revenue was roughly $50,000 per year per customer, or about $4,000 per month. Growth came from a mix of channels: a business development team dialing prospects, lists, webinars, drip campaigns, and pay-per-click advertising. Paid acquisition spend was described as a couple of hundred thousand dollars per month. The company aimed to keep its cost to acquire a customer near a one-to-one ratio with first-year revenue, which implied spending up to roughly $45,000 to $50,000 per new customer.

Retention and expansion were central to the company's economics. Gross customer churn was described as under 1% per month, and net revenue churn had only recently turned positive at one or two percent. Customers often started with one or two use cases and expanded to six, eight, or more, which Don cited as the main reason lifetime value estimates, projected up to ten years and $400,000 to $500,000, held up even as some customers left. Expansion was estimated at about 120% year over year on existing revenue.

Venna has about 200 employees, based mostly in Toronto with staff in U.S. cities and London. It reports about 350 customers and roughly $1.4 million in monthly recurring revenue, and it describes its growth as a hockey stick, with 50 new customers added per quarter.