Sramana: Up to the point that you launched the professional version, how were you generating revenue?
Jerome Ternynck: One of the advantages of SmartRecruiters is that in the workspace we have a store where customers can spend their recruiting budget. In that store you can buy services such as advertising job postings which can include posting jobs on Monster or LinkedIn. You can buy assessment services such as skills tests, personality tests and background checks. You can hire external recruiters as well. We have a marketplace within the free application. We monetize those transactions through revenue sharing.
Sramana: Is it an affiliate model?
Jerome Ternynck: No because the customer pays us directly. We are like iTunes for recruiting. You buy all of your recruiting services from our store. That is our first level of revenue.
Sramana: When did you launch the free app?
Jerome Ternynck: We launched it in 2011.
Sramana: At what point did that start monetizing?
Jerome Ternynck: We had our first revenues arrive in late 2011.
Sramana: How much capital did you need to put in to get the product launched?
Jerome Ternynck: We did a $1 million seed in October of 2010. That covered all of our needs until our Series A in March of 2012.
Sramana: Who was in the seed round? Did you invest your money?
Jerome Ternynck: No. I am an entrepreneur, not an investor. I invest my hard work and passion. I try to keep my money out otherwise it is hard to be a critic of myself. I am a very bad investor. I have invested in friends companies and I make bad investments.
The seed round was from private individuals who had been partners at VCs in my previous companies. They wanted an opportunity to work with me again. It was a friends and family round.
Sramana: What were you able to accomplish with your seed round?
Jerome Ternynck: I wanted to get to the Series A with a light product that showed traction. I wanted to have early signs of monetization. That is what we had when we arrived at our Series A. Our Series A was led by Mayfield.
Sramana: How much did you raise in your Series A?
Jerome Ternynck: We raised $5.5 million.
Sramana: How did your revenue track?
Jerome Ternynck: For the store the revenue scaled based on the number of customers.
Sramana: How long did it take you to reach $1 million in revenue?
Jerome Ternynck: About 1 year. By the time we raised Series A we were already trending there.