Building a Venture Scale FinTech SaaS Startup: Mike Whitmire, co-founder and CEO of FloQast (Part 2)

Sramana Mitra: So, when you started going after companies that looked like Cornerstone, were you doing that as a bootstrap company or a venture-funded company?

Mike Whitmire: We had taken a small seed round of funding. We raised $1.3 million at the time to build out the first iteration of the product and prove we could go to market. We were working with a small budget because I wasn’t in a position to burn a lot of cash. I had to be very prudent with the funds we had.

The idea behind FloQast wasn’t the most exciting for venture capitalists, so I had to prove it from a revenue growth perspective before I could get more funding. Also, accountants can be slower to adopt technology, so I had to be thoughtful about our runway and how we deployed capital, in case the market adopted slower than expected.

Sramana Mitra: How long did the $1.3 million last?

Mike Whitmire: We closed it in 2014. It funded the development of our first product and lasted through 2015. We closed our Series A in Q1 of 2016 with Polaris Partners and raised about $6.5 million.

Sramana Mitra: How many customers did you have before raising Series A?

Mike Whitmire: About 50 customers were using FloQast. In our first year of selling, we went from two beta accounts to 50 active clients.

Sramana Mitra: That’s excellent customer acquisition progress.

Mike Whitmire: It was a lot of fun. We had a small team, and that early team mattered a lot. We found the right people.

Sramana Mitra: You were selling direct, right?

Mike Whitmire: Yes, definitely selling direct. A big decision was whether to spend a lot on marketing or not. The accountant in me was cautious about throwing marketing dollars into the ether. So, we were very lean on marketing—we didn’t hire anyone in that department. I was basically the CMO at the time, just figuring things out.

Sramana Mitra: At that point, it’s usually founder-led sales.

Mike Whitmire: Yes, founder-led sales. I break sales into demand generation (getting demos booked) and closing deals. We were very human-focused on getting demos booked. It was more predictable to hire two people to generate a certain number of demos than to just spend on marketing and hope it worked. So, we prioritized outbound efforts over traditional marketing.

Sramana Mitra: So, in Q1 2016, you raised $6.5 million. What happened next?

Mike Whitmire: We started hiring more go-to-market team members. On the product front, we wanted to move more into automation, so we hired more engineers and product people. We had nailed the collaboration part of the platform, but we wanted to deepen our automation capabilities.

We also needed to scale support functions as the company grew. We got a larger office—definitely the dumpiest we’ve had, but it had the square footage we needed. We grew the team to about 35 people.

Another big focus was customer success. We ensured customers always had a human contact—someone with an accounting background who understood their pain points. That hands-on support became a major differentiator for us, especially since accounting software is often a cost-cutting area and doesn’t typically get strong support.

This segment is part 2 in the series : Building a Venture Scale FinTech SaaS Startup: Mike Whitmire, co-founder and CEO of FloQast
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