Manmeet Singh: I stayed on my course. VCs were not ready to put in money. If you look at history, that was the worst time to raise money. That was the time that I had to go from one angel to another. I did coffee and lunch where I invited 10 to 20 people. Five of them showed up. Everybody wrote a check worth $35,000 to $50,000. Basically, this is how I got my first $7 million.
Sramana Mitra: How were you pricing the round? I imagine the $7 million was not in convertible debt.
Manmeet Singh: You’d be surprised. $5 million was in convertible debt.
Sramana Mitra: Wow! I’ve never heard this before.
Manmeet Singh: When I was raising the money from the VCs, they were shocked. They were like, “How could you get that much money from that many people without anybody asking you any questions?” I was new in the entrepreneur business. I did not know that notes should not be this way. When I raised my A round, the note had to be converted. My A round was smaller than my note. Now, real VCs are involved. It was a tough time. Consumer businesses were still getting funded but enterprise businesses weren’t getting funded.
Sramana Mitra: What is you average sales price for a deal?
Manmeet Singh: Today, the average customer purchase is in the $200,000 to $400,000 range. There are also large customers who are half a million or more a year but generally it’s $250,000 a year.
Sramana Mitra: This is a recurring revenue cloud service kind of model?
Manmeet Singh: Recurring model, yes.
Sramana Mitra: What is the sweet spot of the customer base? Is it horizontal across all kinds of large enterprises or is there a sweet spot?
Manmeet Singh: The focus has always been the top four sectors, which are financial, healthcare, retail, and insurance. These are the people who are buying it but Federal is also there. In 2009 or 2010, I signed up Compuware as a reseller of the product. They sold the product into Federal-like Department of Justice and Department of Transportation.