A new story from Wintrust Business Lunch with Amy Guth


Couple notes on this is I think it's interesting I I either do you just want your campaign so the traction is is still smarting from like six or seven thousand dollars invested from nineteen investors and they would have been life like a day and the numbers the turns to be totally honest are quite good this crowded market space so I understand a little bit that you know I don't expect like a ten million or twenty million dollars valuation and an early company that only has about a thousand customers and you know the revenue is roughly around you know they're they're hoping to have about thirty thousand and skate in sales in Q. four of twenty nineteen they're hoping to get about six hundred dollars a year average revenue per customer which there's you know a million literally a million customers that they can that they can target but here's the thing at this like just going to the terms five million dollar value cap minimal a hundred dollar investment twenty percent discount so literally I'm gonna put this in context their goal is up to million dollars this crowd safe I suspect that if they get this going they're using this to get customers and then after that they're off to the races they're gonna kinda lockdown product one and then after that scaling it off to raise more money but we mentioned sprout social he mentioned hootsuite as well sprout just IPO to about two weeks ago and they raised about our will hundred and fifty hundred something million dollars are valued about eight hundred and seventy five million they've acquired to date six companies that I'm aware of I think the number might it should be eight but it's six that I'm aware of and they are the perfect example as the the steward of the market to want to scoop up a movie and so if you wanna make a bet on movie this is what I'm looking at I'm looking at why would spot of or why would sprout social I mean Spotify actually could too depending on companies are pro programmatic advertising can systems why would a sprout social by Wolfie and the question is sort of two fold now there's a lot of things but we got a short show so let's make a quick the first thing is just flat out grab for customers does movie have an ability to more cheaply get smaller businesses that can't afford to pay a hundred and fifty dollars a month or whatever it is to use sprout social but they can't afford to pay nineteen ninety five or ten dollars or whatever movie is charging per month per customer if they can land a hundred thousand or two hundred thousand some sort of like meaning full number of customers would sprout social decide you know what rather than pay the money and try to capture that audience we're just gonna buy the company keep the platform running and use that to plug those current customers of movie in two hours that's the first part and the second part is to the point of of Arjun where they offer sort of this the Google ask auto fill for social should be just to give you an example I was writing up my social post which you can follow at techno rectitude on everything on sprout social literally minutes before the show and I have to write all of it out and I have no idea if I'm funny or smart or just doing a direct I don't care movie would actually enable the auto spell auto right for somebody's post based on what people are searching and based on what I've read in the past and what has you know played well to you the audience it would auto fill saving me a ton of time and also being potentially more statistically you know positive that my brain in a hurry as I quickly thumbed through the post and so the question is this broad social or others want to invest the time and money which I'm sure they are but do they want to devote the time and dedication and hire the teams to try to continue to in a raid on their platform and build this technology or is it cheaper more economical for them to just look at a movie and say okay we're gonna choir for two reasons one you've got a piece attacked we like you got a team built it and that we like them we're gonna choir you to roll you when your company and your our new tech development platform focused on this and also because we've got you don't call two one thousand new customers that can't afford our full suite of services but they can afford jurors which we own and we can gradually graduate each of these different business users into more premium customers which is more bottom line that they are bringing in with less cost presumably that they did not overpay for the opposition and I bring that up simply because at a five million dollar value cap with a twenty percent discount to you so you get to return your shares at twenty percent discount if they get scooped up by sprout social what five million dollars or anything you know under that your gonna get a check and if they take on financing to compete to get scooped up at a hundred you're gonna get your money then even before the exit and so this is one of the kind of companies that I actually look for I'm not saying my endorsement on this company per se haven't done enough research but I will say this is what I look for I look for companies that I can see why other companies I'm familiar with would want to use them by them to compete with them if it's competing becomes on race and they start raising much capital and it just depends on where I get my investment and as a pertains retelling dusting doesn't matter I mean now and anything at five million plus I'm out so I think it's worth looking at the only other question I would vast Arjun if we had more time wise what do they need to get it right and I think I I don't I don't answer forms honestly what I would respond to if he thinks that he is an acquisition target then he should be focusing on finding who the customer and the user experience that sprout or others who are not getting but clearly have demonstrated an interest in acquiring as far as like we want to be in this business for just not yet and trying to get that customer base so that their tractor for acquisition if they're not looking at as an acquisition and the board and all the investors previous to this company decided we want to ring the bell on a on a on a shot the shiny sunny day when the I. P. O. in that this is the future of of social management social digital marketing that is because they think that they can do a different cheaper in turn more money than they would be competing to to create the most unique experience possible in the space and that's our number one focus is to create the most unique defendable offering and acquire the most customers possible I didn't have the answer is we don't have time but that would be the question that I would be asking and and sort of chewing on is depending on which way they went out for you it doesn't really matter because if they achieve either one of them you're fine if they don't then you're you're you're out but like a couple hundred Bucks a thousand Bucks what's the difference so we're gonna take one more quick commercial and then I'm gonna come back with our next pitch and I'm doing this on purpose a little extra time because I have been very I've had a lot of.

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