Raise Capital for Your SaaS

About this video

This coaching call is with Michael of Pre-Approve Me, a mortgage-software business serving mortgage companies. Michael says the company was started nine years ago, began growing in earnest five years ago, and has about 10 full-time staff. His main problem is capital to scale, and he is exploring getting customers more invested. Martell presents customer financing in levels. The most founder-friendly option is preselling multi-year contracts paid up front, pulling cash flow forward without diluting equity; as an example, he cites the company Pela crowdfunding what he describes as 22 million worth of presales for its Lomi product. The next level is roadmap financing: customers prepay to build features, often on a 50/50 cost split — for example charging $50 against a $100-an-hour hard cost — but only for features already aligned with the roadmap, so the company does not become a custom dev shop. He stresses getting three or four clients who want the same feature to each pay for it. A third level is a customer investment on simple terms, such as a convertible note or a priced seed round, keeping dilution modest. Michael leans toward roadmap financing, and Martell advises selling it on outcome and competitive advantage, using a clickable prototype, asking for advice first, and packaging participation as an early-adopter or customer advisory board with early beta access — he suggests about three months before the wider market — direct CEO access, and public recognition. In the second half, Martell addresses slow activation by defining time to first value, studying the click stream of the best customers to find their common early milestones, and front-loading those steps into onboarding for every new account, as he says Clarity did by requiring new users to answer a key question before using the product.

Key takeaways

• The least dilutive customer financing is preselling multi-year contracts paid up front, which pulls existing cash flow forward.
• For roadmap financing, only sell features already on the roadmap and split the cost, so customers fund acceleration rather than custom one-off work.
• Recruit several customers who want the same feature to each contribute, rather than relying on a single sponsor.
• Package paid participation as an advisory or early-adopter programme with early access, direct founder access, and recognition, sold on the business outcome.
• Improve activation by defining time to first value and copying the early milestone sequence of your best customers into every new user’s onboarding.

Episode details: published August 8, 2022 · 18:33 long. Summary written by Self Growth Videos from the episode itself. Business results and any income figures mentioned are Dan Martell’s own claims, shared for education — they are not typical or guaranteed.

← Previous: The Only Marketing Strategy You’ll Ever Need · Next: Become the “Ironman” of Business →

All Dan Martell videos · Dan Martell profile · Dan Martell (official site)