Practical Founders Podcast

Jesse Welch runs Midcap Global, a boutique investment bank advising companies with $1 million to over $10 million in profits. He came from film production, AI startups, a real estate private equity firm and a crypto hedge fund sold in 2021, and he now teaches founders on his Capital Love Letters YouTube channel.

His core point: the headline exit price is a vanity metric; it's the other terms that decide who gets paid, how much and when. He walks through earnouts, rollover equity, escrows, consent rights, preferred equity, PIK interest and ratchets, and shows how each one can be turned against a founder who signs without understanding it.

He also covers newer traps for software sellers, including annual prepay contracts that trigger working capital demands, plus quality of earnings reports and family office buyers. His advice: build a three-person team with a CPA, lawyer and M&A advisor, stay patient and flexible, and assume every clause gets used against you.

Key Takeaways

• Earnout Odds - About 25% of lower middle market deals include one, and the market pays around 21 cents on the dollar.
• Consent Rights - Assume every clause gets weaponized against you; Jesse puts the odds at forty to fifty percent.
• Preferred Equity - Liquidation preferences, participation and PIK interest put investors first in line, and time works against the founder.
• Prepay Contracts - Buyers may demand part of the annual cash you collected stay behind; negotiate to the real cost of service.
• Advisor Team - Hire a CPA, a lawyer and an M&A advisor, because lawyers make deals legal, not strategic.

Quote from Jesse Welch, Founder and CEO of Midcap Global

"Earnouts are tools that can be used to trap you. About 25% of lower middle market deals have one, and they're sold as a second bite at the apple, but they don't tell you if that apple's rotten or if there's a worm in it. When I'm representing a buyer I always push for an earnout, but for a founder it's an extremely dangerous tool.

"Say you want to sell at $200 million and the buyer wants to pay $190 million. To bridge that ten-million gap, they'll ask you to work for them for two years, with five million for each year if the company hits certain metrics, usually a profit number. It sounds great because you know your business and you can grow it to that number, but you're betting on the same horse with a different jockey.

"The buyer can reduce your marketing spend, add a monitoring fee and throw overhead onto your business, so a ten-million profit target lands at $9.9 million. You don't get 90 percent of your earnout for getting 90 percent of the way there; you might work for two years and walk away with zero. About half of earnouts pay out nothing, and across the entire market they pay around 21 cents on the dollar."

Links

• Jesse Welch on LinkedIn
• Midcap Global website
• Capital Love Letters (YouTube)

Podcast Sponsor – DevHawk Every founder I know is trying to move their roadmap faster with AI, but most admit it isn't working. DevHawk is an AI software factory from former practical founder Praveen Ghanta. DevHawk plugs in a full crew of customized AI agents that handle the whole development job, end-to-end. Not just writing code, but requirements, testing, shipping, and maintenance. Add their AI agents to your org chart and run them yourself--or have the DevHawk team manage the software factory for you. Either way, you get a team that works while you sleep, and a roadmap that can move 5-10x faster within a month. Head to devhawk.ai/practical to book a conversation about how DevHawk can help.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app or view on our YouTube channel.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Practical Founders CEO Peer Groups

Be part of a committed and confidential group of practical founders creating valuable software companies without big VC funding. A Practical Founders Peer Group is a committed and confidential group of founders/CEOs who want to help you succeed on your terms. Each Practical Founders Peer Group is personally curated and moderated by Greg Head.

Jerry Nettuno started Schedulicity in Bozeman, Montana, in 2009 after struggling to book his own haircut as a single father. He recruited his first developers from Denver, paid for the build himself, and launched online scheduling for hairstylists, trainers and other small service businesses at $29 a month, starting with about a hundred customers around Bozeman.

To fund a bigger team and faster growth, Nettuno raised millions from angels and one large private investor, never from venture capital. Schedulicity grew to 15,000 to 20,000 small businesses, almost 40 million consumers, $10 to $20 million in revenue and about 100 employees, but growth stalled after COVID. The company raised about $28 million in total private capital.

Looking back, Jerry says he would raise less, since every round raises the sale price needed to deliver the same return, and today he could run the same company with a fraction of the people. He sold to Vagaro, closing in early 2025, and now co-founds Pulsara, which expects about $30 million in ARR.

Key Takeaways

• Exit Math - Every round raises the bar: $200 million to match the return a $25 million sale once delivered.
• Cheaper Today - With today's tools, the same company could run with a fraction of the employees Schedulicity needed.
• Non-VC Capital - Angels and one large private investor funded Schedulicity after Sand Hill Road meetings left him unimpressed.
• Win The Owner - Fixing the stylist's business problems brought her 200-plus customers onto the platform without paying anything.
• Explain Fast - Many founders lose people explaining the product; be able to say it in one minute before building further.

Quote from Jerry Nettuno, Founder and CEO of Schedulicity

"I would have definitely not raised the money that we did when we did. It was only so much I could do on my own, but I think we could have bootstrapped a little bit longer and not had to raise as much money. Things were so different at that time it was hard to see, but it's very clear looking back, obviously.

"Not to mention, in today's world we could have run the same company that we sold with probably a fraction of the employees. When seventy percent of founders say they'd raise less, a lot of it has to do with the fact that every time you raise money, the benchmark is raised.

"The more money you raise, it exponentially increases the amount you'd have to sell the company for to get the same amount. I remember seeing an article early on that talked about that. Once you raise the bigger money, you'd have to sell the company at two hundred million to come away with the same kind of return as you could have sold it for twenty-five."

Links

• Jerry Nettuno on LinkedIn
• Schedulicity on LinkedIn
• Schedulicity website
• Vagaro (acquirer)

Podcast Sponsor – Full Scale

This podcast is sponsored by Full Scale, one of the fastest-growing software development companies in any region. Full Scale vets, employs, and supports over 300 professional developers, designers, and testers in the Philippines who can augment and extend your core dev team. Learn more at fullscale.io.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app or view on our YouTube channel.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Practical Founders CEO Peer Groups

Be part of a committed and confidential group of practical founders creating valuable software companies without big VC funding. A Practical Founders Peer Group is a committed and confidential group of founders/CEOs who want to help you succeed on your terms. Each Practical Founders Peer Group is personally curated and moderated by Greg Head.

Rob Walling has been publishing Startups for the Rest of Us every week since 2010 — he recorded episode 855 the morning of this interview — and has written five books on bootstrapped SaaS, with a sixth on the way. He started five companies before turning to investing, all of them bootstrapped, and sold Drip in 2016.

In 2018 he and co-founder Einar Vollset launched TinySeed, the first accelerator built for SaaS bootstrappers. They aimed to raise $1-2 million for the first fund and closed almost $5 million. TinySeed now writes $150,000 to $250,000 checks into companies doing $2,000 to $40,000 MRR, funds one to two percent of applicants in batches of 10 to 20, and runs a year-long program instead of the standard 90 days. Rob is invested in 241 SaaS companies.

This year TinySeed is skipping a batch for the first time since 2019 — not because the portfolio is struggling, but because Rob wants to do the work on which moats still hold in the age of AI before writing more checks. His aggregate revenue graphs are still climbing while the market has repriced the entire category, a gap he calls the widest he's ever seen between sentiment and reality.

Rob has just revised his popular book, Idea to Traction, for the AI age. It's for founders to turn software product ideas into actual businesses with happy customers who pay you--for years. Building software products used to be hard and slow, now it's neither. The challenge has moved to validating with customers--before you start building.

Key Takeaways

• Sentiment Gap — Portfolio revenue is still climbing while the market prices SaaS for a collapse.
• Ten to Twenty — Rob's estimate of the SaaS share facing real AI headwinds, not the whole category.
• Validation Still — Shipping fast is not validating; experienced founders still talk to customers first.
• Moats Shifting — Complexity and integrations stopped protecting anyone; permission to act still does.
• Average Is Terrible — AI tools needing constant supervision lose to one competent full-time hire.

Quote from Rob Walling, Co-Founder of TinySeed

"Just because people can build things now, they think they don't have to validate. When I turned Idea to Traction into a video course, someone bought it and asked for a refund, which we give. I wanted to know why, and they said the first third is about validating, having conversations with customers, and getting a landing page. They told me they don't have to do that anymore, because they can just build a product in a day and launch it. And I told him, No, you are wrong.

"So I went back and revised my Idea to Traction book to address that exact objection. I have all these examples of second and third-time founders who are doing validation, because they're experienced and they know they need to. Steve Blank was saying the same thing: everyone was showing up with a vibe-coded prototype, and they hadn't talked to a single customer, to their detriment. That's the biggest myth I'm trying to fight."

Links

• Rob Walling on LinkedIn
• Startups for the Rest of Us podcast
• TinySeed on LinkedIn
• TinySeed website
• Rob's new book, Idea to Traction: Stop Building SaaS Nobody Wants in the Age of AI

Podcast Sponsor – Vista Point Advisors

This podcast is sponsored by Vista Point Advisors, a leading investment bank for founder-led software, AI, and internet companies. Vista Point works exclusively on the sell side, providing unconflicted M&A and capital raising advice to help founders maximize business value, evaluate their options, and realize ideal outcomes.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app or view on our YouTube channel.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Practical Founders CEO Peer Groups

Be part of a committed and confidential group of practical founders creating valuable software companies without big VC funding. A Practical Founders Peer Group is a committed and confidential group of founders/CEOs who want to help you succeed on your terms. Each Practical Founders Peer Group is personally curated and moderated by Greg Head.

Josh Allen is founder and CEO of Tratta, software for debt collection agencies and creditor rights law firms that gives consumers self-service payment tools and gives agents modern back-office tools. He started in merchant services, hired contractors to build a payment portal, and found out the hard way that nobody was waiting for it.

That first platform landed five clients in about three years while Josh took on well over a million dollars in personal debt for the business. Tratta grew out of one back-office feature a client loved. Today it has about $5 million ARR, just over 20 employees, and almost 100 clients on pricing tied to approved payments.

Josh repaid every penny of that debt in late 2023 and has never taken outside funding. Revenue and headcount both doubled this past year, and he is now hiring his first VP of customer operations. His advice: keep validating with real clients, be willing to pivot, and let a strong CTO tell you no.

Key Takeaways

• Build Backwards: Start with the critical tools for the critical users; if those teams aren't happy, nothing launches.
• Validate Small: One back-office feature a client loved became the product; the portal everyone doubted came second.
• Say No: A CTO who ignored founder ideas became the biggest unlock; hearing no is Josh's best lesson.
• Client Concentration: Josh's best day was when no client topped 10 percent of revenue, better than hitting $5 million.
• Narrow Market: Josh sizes his ideal market at about 1,600 clients and aims to win a quarter of them.

Quote from Josh Allen, Founder and CEO of Tratta

"In my first startups, we got five clients over three-ish years, and I appreciate every one of them to this day. The software did not scale, there were so many problems with it, and I didn't understand the code well enough to know what they were. I ended up hiring another firm to come look at it, and they took it over and stabilized it.

"The realization came that this was not scalable. I had sunk so much money into it and was on the hook for well over a million dollars personally, which sounds crazy with only five clients, and yes, I did a lot wrong. I was facing software that was not going to work, but it was a good idea.

"I had just had my first daughter and was about to have a second, which is always a great time to do this stuff. I could ride it out, go back to merchant services, cross my fingers, and pay this off over the next ten years of my life. Or I could just start over completely."

Links

• Josh Allen on LinkedIn
• Tratta on LinkedIn
• Tratta website

Podcast Sponsor – DevHawk Every founder I know is trying to move their roadmap faster with AI, but most admit it isn't working. DevHawk is an AI software factory from former practical founder Praveen Ghanta. DevHawk plugs in a full crew of customized AI agents that handle the whole development job, end-to-end. Not just writing code, but requirements, testing, shipping, and maintenance. Add their AI agents to your org chart and run them yourself--or have the DevHawk team manage the software factory for you. Either way, you get a team that works while you sleep, and a roadmap that can move 5-10x faster within a month. Head to devhawk.ai/practical to book a conversation about how DevHawk can help.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app or view on our YouTube channel.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Practical Founders CEO Peer Groups

Be part of a committed and confidential group of practical founders creating valuable software companies without big VC funding. A Practical Founders Peer Group is a committed and confidential group of founders/CEOs who want to help you succeed on your terms. Each Practical Founders Peer Group is personally curated and moderated by Greg Head.

Shawn Boyer is founder and CEO of goHappy, a frontline employee communication and engagement platform for companies with a thousand or more hourly workers in restaurants, logistics, manufacturing, and retail. Before that he started Snagajob in 2000, a job marketplace for hourly workers, funding it with credit cards and family money until it reached profitability after four years. Then he raised three rounds of VC funding to grow the company much bigger.

goHappy began as a mobile app, but customers kept asking to just text their people, so Shawn shifted the product to SMS communications during COVID. Today about 1.5 million frontline employees across 400-some customers use it. The team is under 40 people, revenue is well into eight figures, and the business is profitable with solid gross margins.

Shawn has now been through bootstrapping, venture capital, minority growth equity, and majority private equity. At Snagajob, investors reaching 51 percent ownership ended with a new CEO in 2013. At goHappy, he chose Grove Street Partners in 2022 (minority) and Pamlico Capital (majority) in 2025 by matching their expectations to plans he had already proven.

Key Takeaways

• Simple Wins: Frontline workers won't download another app, so texting beat the native app within seven months.
• Projection Trap: Aggressive projections used to win a higher valuation become your budget the day after closing.
• Prove Assumptions: Wait for twelve-month retention before doubling down; a 15-point gap undid Snagajob's small-business push.
• Small Team: Keep headcount low on purpose; under 40 people now produce well into eight figures in revenue.
• Pick Partners: Investors differ widely, so choose the person and the expectations, not just the check or the valuation.

Quote from Shawn Boyer, Founder and CEO of goHappy

"The biggest and hardest lesson is that there is just as much risk in going too fast as there is in going too slow. We have our assumptions that doing X is going to yield Y, but let's go prove that out, and I would rather be more methodical and risk going too slow than be too aggressive, blow through money too quickly, and in essence lose control.

"The waste on the people churn side is so darn expensive too, because when you've spent so much time getting somebody up to speed and it doesn't work, it just sets you back. It's all about the people, and that means going slow on hiring. "At Snagajob 15 years ago, I felt a real sense of accomplishment when the team grew from 100 people to 150, and it sounds stupid, but I felt so good saying it. Now at GoHappy, it's the opposite, with pride in keeping the team small and seeing how much we can accomplish with fewer people, which has made us incredibly prudent and disciplined in our hiring, even though you're never going to get it 100 percent right."

Links

• Shawn Boyer on LinkedIn
• goHappy on LinkedIn
• goHappy website
• Snagajob website
• Growth Street Partners website

Podcast Sponsor – Full Scale

This podcast is sponsored by Full Scale, one of the fastest-growing software development companies in any region. Full Scale vets, employs, and supports over 300 professional developers, designers, and testers in the Philippines who can augment and extend your core dev team. Learn more at fullscale.io.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app or view on our YouTube channel.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Practical Founders CEO Peer Groups

Be part of a committed and confidential group of practical founders creating valuable software companies without big VC funding. A Practical Founders Peer Group is a committed and confidential group of founders/CEOs who want to help you succeed on your terms. Each Practical Founders Peer Group is personally curated and moderated by Greg Head.

Riccardo Pisano grew up in Rome, started coding at fourteen, and came to the US for a master's in e-commerce. After a venture-chasing startup called Proximity stalled, he and co-founder Roy turned an internal LinkedIn outreach script into Growth-X in January 2016. Riccardo refused to write a line of code until customers had paid, unlike his previous startup attempt.

Growth-X started as pure LinkedIn automation at $500 per user, back when 90 percent of connection invites got accepted. It grew into a multichannel lead generation platform with intent data and website visitor identification. The company was bootstrapped and profitable the whole time, paid both founders within a year, and ran lean with eleven employees by the exit.

Seeing AI agents coming, Riccardo listed Growth-X on Acquire.com. But complicated cash-basis books across US and Israeli entities made his P&L useless to buyers, a good LOI fell apart, and growth stalled while he fixed it. It took two years to sell to CueGrowth in June 2025. His verdict: "I lost millions on two pages of numbers."

Key Takeaways

• Cash Basis Confuses: Annual prepayments on cash-basis books make monthly P&Ls look like nonsense to buyers.
• Sync Books Early: Set up QuickBooks and a proper review from day one so financials take one click.
• Sell While Growing: Stopping growth to build diligence documents lowers your price right when it matters most.
• The Awkward Middle: $1M to $10M companies are too small for brokers and too founder-led for big buyers.
• Watch the Clock: He listed the company when OpenAI agents appeared, figuring he had maybe two years left.

Quote from Riccardo Pisano, Co-Founder of Growth-X

"The company suffered a lot from not having our financials ready to respond to LOIs to acquire us. I switched my mindset completely from growth to getting these documents ready, and growth completely slowed down. We signed an LOI that was pretty good, but it eventually failed.

"In those three months, I couldn't generate the P&L at the pace they needed, and they started losing trust. Trying to grow while learning what financials you have to produce and getting the accounting firms to do it slowed down a lot of our growth.

"So after not closing the first deal, I said, okay, let me put a break in here and bring it up again. We restarted the machine, got more organized on the financials, and then restarted with Acquire.com, then sold the company successfully."

Links

• Riccardo Pisano on LinkedIn
• Riccardo Pisano website
• CueGrowth (acquirer)

Podcast Sponsor – Vista Point Advisors

This podcast is sponsored by Vista Point Advisors, a leading investment bank for founder-led software, AI, and internet companies. Vista Point works exclusively on the sell side, providing unconflicted M&A and capital raising advice to help founders maximize business value, evaluate their options, and realize ideal outcomes.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app or view on our YouTube channel.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Practical Founders CEO Peer Groups

Be part of a committed and confidential group of practical founders creating valuable software companies without big VC funding. A Practical Founders Peer Group is a committed and confidential group of founders/CEOs who want to help you succeed on your terms. Each Practical Founders Peer Group is personally curated and moderated by Greg Head.

Steve Wolfe co-founded Growth Street Partners in San Francisco about ten years ago with his partner Nate Grossman, after a career in software-focused private equity. The firm's name is the point: they don't invest on Sand Hill Road, Wall Street, or even Main Street, but a street or two behind it, where the rent is lower and practical founders put their earnings back into the business.

Growth Street has now raised three funds — $70 million, $130 million, and a little over $200 million — with the same strategy since day one. They write $5 to $15 million checks for 20 to 50 percent of vertical B2B SaaS and tech-enabled services companies doing $1 to $5 million in revenue, always as a minority partner. Portfolio companies include Chipply and TeamLinkt, both previous Practical Founders guests.

Steve's 2026 answer to the AI shift is a firm-wide operating principle they call "Operation Cole Trickle": when the race track fills with crashes and smoke, "go high" and avoid the crazy mess. That means returning to first principles — a high integrity founder, real customer value, a strategic piece of real estate — and treating the daily AI headline cycle as a distraction with a very short half-life.

Key Takeaways

• Go High — Drive above the wreck instead of through it, and return to first principles.
• Minority Stakes — $5-15 million buys 20-50 percent, so founders keep control and keep deciding.
• Headline Half-Life — Reading AI news daily burns time on knowledge that expires in weeks.
• Right to Win — Add AI where you already have an edge, not everywhere you see a nail.
• Exit Discipline — Growth Street models five times revenue at exit, same as day one.

Quote from Steve Wolfe, Co-Founder & Managing Partner at Growth Street Partners

"We call it founder market fit. We're not buying control of the businesses, which is really a critical component of our strategy. Founders are willing to talk to us because we're a minority investor. What it means for our strategy is that our founders are going to make thousands of decisions without us. So they need to have the same values that we have, because God forbid they don't.we're in big trouble.

"When we think about diligencing a new opportunity, when a business has got $1-5 million of annual recurring revenue and it's growing nicely and everything seems good. But the clay on that business is still really wet, so we can help them mold the business.

"But the founder that we're partnering with, the market that we're entering into, that clay is usually pretty dry. You can't change the founder and you can't change the market. And so that founder better be aligned with you, better have the values that you have. Otherwise, you're in big trouble."

Links

• Steve Wolfe on LinkedIn
• Growth Street Partners on LinkedIn
• Growth Street Partners website
• Steve's earlier Practical Founders episode (#123, with Nate)

Podcast Sponsor – DevHawk Every founder I know is trying to move their roadmap faster with AI, but most admit it isn't working. DevHawk is an AI software factory from former practical founder Praveen Ghanta. DevHawk plugs in a full crew of customized AI agents that handle the whole development job, end-to-end. Not just writing code, but requirements, testing, shipping, and maintenance. Add their AI agents to your org chart and run them yourself--or have the DevHawk team manage the software factory for you. Either way, you get a team that works while you sleep, and a roadmap that can move 5-10x faster within a month. Head to devhawk.ai/practical to book a conversation about how DevHawk can help.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app or view on our YouTube channel.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Practical Founders CEO Peer Groups

Be part of a committed and confidential group of practical founders creating valuable software companies without big VC funding. A Practical Founders Peer Group is a committed and confidential group of founders/CEOs who want to help you succeed on your terms. Each Practical Founders Peer Group is personally curated and moderated by Greg Head.

Heath Adams is a military veteran in Albuquerque who started posting ethical hacking videos on YouTube under the handle The Cyber Mentor. The videos found a large audience, consulting clients started showing up, and he launched TCM Security as a penetration testing shop. Then he put a course on Udemy in December and it did six figures in its first week.

TCM became a training company quickly. By the time he sold TCM, it had 30-plus courses, around 10 hands-on certifications with a proprietary exam platform, and 30 employees. Revenue was low eight figures, split roughly 33-40% education, 30% certifications, and 20-30% services. The YouTube channel passed a million subscribers, over 100,000 students bought courses, and more than 10,000 were paying subscribers. No outside funding, ever.

He sold to Educate 360 in 2024 and exited in 2025. He spent two to three years deliberately unwinding his own YouTube centrality so the company could be sold without him: hiring a marketing team, handing off social media, putting other people on the videos, until customers stopped equating TCM Security with Heath Adams. He now runs Breach Point, a defensive security company built to scale from day one.

Key Takeaways

• Affordable Pricing — $30 subscriptions opened a global audience nobody else in cyber training was serving.
• Revenue Share — Splitting revenue with expert instructors bought quality he could never have afforded to hire.
• Platform Lock-In — Teachable worked fine at five courses and became a trap at thirty.
• M&A Advisor — A million dollars in deal costs doubled the offer, and he'd pay it again.
• Track Data Early — Accrual accounting and a real CRM from day one, not spreadsheets and intuition.

Quote from Heath Adams, Founder and CEO of TCM Security

"We spent many years getting rid of founder dependency in our marketing, and that was a big thing to prepare for. If I ever wanted to get out of here, if I wanted to exit, I had to get rid of the founder dependency with me as the face of the company.

"So it was a two, three year plan way before then. We started hiring people in to be the face. Stopped posting on social media as much about the person and only about the the company.

"We got to a point where they don't say TCM Security is Heath Adams. They just say that guy maybe works at TCM Security, or they don't even know who I am. Getting to that point was hard to achieve, but we did get there eventually."

Links

• Heath Adams on LinkedIn
• TCM Security on LinkedIn
• TCM Security website
• Breach Point (Heath's new company)

Podcast Sponsor – Full Scale

This podcast is sponsored by Full Scale, one of the fastest-growing software development companies in any region. Full Scale vets, employs, and supports over 300 professional developers, designers, and testers in the Philippines who can augment and extend your core dev team. Learn more at fullscale.io.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app or view on our YouTube channel.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Practical Founders CEO Peer Groups

Be part of a committed and confidential group of practical founders creating valuable software companies without big VC funding. A Practical Founders Peer Group is a committed and confidential group of founders/CEOs who want to help you succeed on your terms. Each Practical Founders Peer Group is personally curated and moderated by Greg Head.

Lynn Burghardt is a fifth-generation owner of Burghardt Sporting Goods — the oldest family-owned sporting goods store in the country, founded in 1881. Chipply grew out of that business: after years of hacking together their own tools for team apparel orders, Lynn and two brothers built the software solution the decorated-apparel industry didn't have, funded by a $250,000 angel check from their father, Chip.

Chipply is e-commerce software for decorated apparel, the custom team stores where players, parents, and fans order their own gear online. Started in 2015 and selling since 2018, it now powers about 1,500 active dealers, processing around $250 million in gross merchandise value this year at about $10 million in revenue, growing 35%. All with 50 employees.

Chipply charges a percentage of sales, "when they win, we win," and is now adding Chipply One to become run-your-business software for its dealers. Three years ago Lynn took growth equity from Growth Street Partners, not for the money but for the advice to scale up: adding the right senior leaders and structuring the business foundations, with a hands-on partner who engages every week while leaving control in the founders' hands.

Key Takeaways

• Keep Control: The deal preserved control of the product and the board for the founders.
• Win-Win Pricing: Chipply prices on a percentage of merchandise value, so incentives stay aligned.
• Scratch Your Own Itch: The best first customer was their own 145-year-old sporting goods business.
• Just Do It: Trust yourself sooner and take the risk faster.
• Vertical Depth: Decorated apparel is too complicated for generic tools like Shopify to serve.

Quote from Lynn Burghardt, President of Chipply

"Getting a good value for the business mattered, and so did what we were willing to give up to gain the right partner. But the decision was really about advice and expertise.

"It was about putting people in the right seats — on our board and in our business model — to help us take it to the next level. How do we find the perfect sales leader, the perfect engineering leader who can build exactly what we envision?

"That would relieve the pressure on me, our CEO, and the grassroots people who'd been running the business. We were spread too thin, and when we met Steve and Nate at Growth Street Partners, it was just a perfect fit — they gave us the autonomy we wanted."

Links

• Chipply on LinkedIn
• Chipply website
• Growth Street Partners (growth equity investor)

Podcast Sponsor – Vista Point Advisors

This podcast is sponsored by Vista Point Advisors, a leading investment bank for founder-led software, AI, and internet companies. Vista Point works exclusively on the sell side, providing unconflicted M&A and capital raising advice to help founders maximize business value, evaluate their options, and realize ideal outcomes.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app or view on our YouTube channel.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Practical Founders CEO Peer Groups

Be part of a committed and confidential group of practical founders creating valuable software companies without big VC funding. A Practical Founders Peer Group is a committed and confidential group of founders/CEOs who want to help you succeed on your terms. Each Practical Founders Peer Group is personally curated and moderated by Greg Head.

Jay Maharaj built TeamLinkt in Saskatoon, Saskatchewan, a place not known for software. He saw the problem while coaching his own kids: the hockey team had a budget for a team communication app, and the soccer team didn't, so he either paid for it himself or went without. He launched the TeamLinkt app in 2018 and its back-office platform in 2020.

TeamLinkt now powers more than 3,500 organizations with just over 30 employees and 600,000-plus monthly active users across soccer, hockey, flag football, cheer, dance and more. Revenue is pushing $4.5 million Canadian this year and growing close to 2x a year. There is no SaaS fee and no per-player fee. The platform is free, and TeamLinkt takes a small markup on hundreds of millions of registration payments running through Stripe.

Jay chased venture capital for about half a year, even moving his family to the US, before deciding the math never made sense for the company he was building. Last year he raised $6 million USD in practical growth funding from Growth Street Partners, kept board control, and has been deliberate about spending it. He would rather grow alongside his customers than extract more from them.

Remarkably, TeamLinkt customer service reps now ship code now. They write bug-fix tickets that become pull requests straight from Slack through Linear, reserving engineering for complex development work.

Key Takeaways

• Aligned incentives - As customer programs grow, TeamLinkt grows, so saving admins time is the growth strategy.
• VC mismatch - Six months chasing venture capital ended when the one-in-a-hundred exit math stopped adding up.
• Right capital - Practical growth equity funded leadership hires and discipline, not a land grab; Jay kept board control.
• Free drives virality - Coaches and parents spread the app club to club, replacing trade show booths they can't afford.

Quote from Jay Maharaj, CEO and Founder of TeamLinkt

"Our competitors are gonna charge you tens of thousands of dollars to use that platform. But with TeamLinkt, you get the core platform and there's no SaaS fee -- we're payments-driven. And they can choose to absorb that transaction fee or pass it through registration, so for an organization we're really a net zero cost.

"Everything that you need to run your system is in core. It's free for the organization, and when they set up registration, we power payments through Stripe, and then we have a small markup. We feel it's fair and market, usually very competitive if not better, and we have no per-player fees in addition to that.

"We're very invested in giving them time back so they can grow their programs, because as they grow, we grow. So the less work we do on the back office side, the more energy Greg is gonna have to put into coaching, administering, or helping the youth soccer club grow in their community. And that's really what drives us."

Links

• Jay Maharaj on LinkedIn
• TeamLinkt on LinkedIn
• TeamLinkt website
• Growth Street Partners

Podcast Sponsor – DevHawk Every founder I know is trying to move their roadmap faster with AI, but most admit it isn't working. DevHawk is an AI software factory from former practical founder Praveen Ghanta. DevHawk plugs in a full crew of customized AI agents that handle the whole development job, end-to-end. Not just writing code, but requirements, testing, shipping, and maintenance. Add their AI agents to your org chart and run them yourself--or have the DevHawk team manage the software factory for you. Either way, you get a team that works while you sleep, and a roadmap that can move 5-10x faster within a month. Head to devhawk.ai/practical to book a conversation about how DevHawk can help.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app or view on our YouTube channel.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Practical Founders CEO Peer Groups

Be part of a committed and confidential group of practical founders creating valuable software companies without big VC funding. A Practical Founders Peer Group is a committed and confidential group of founders/CEOs who want to help you succeed on your terms. Each Practical Founders Peer Group is personally curated and moderated by Greg Head.