Episode 647.5 | Bonus Episode: TinySeed Application Q&A Livestream

Rob Walling:
Welcome to this bonus episode of Startups For the Rest of Us. I’m Rob Walling, and today I’m chiming in to let you know that TinySeed applications for our next batch are open. They close in a couple weeks on February 19th. If you or someone you know might be interested in the right amount of funding for Bootstrap SaaS, amazing mentorship, world-class community, all the support you need to get there faster, you should head to TinySeed.com/apply. That’s it for the key takeaway of today’s bonus episode.
I also wanted to include the audio from a livestream I did yesterday with a couple other TinySeed folks, our program director and program manager, and we answered audience questions about TinySeed, about the program, anything that someone is wondering about, we talked it through. What’s amazing is even after doing a lot of these livestream Q&As, we still find that there are interesting and informative questions being asked, and each time we think, “Well, we’ll probably get through these in about half an hour and by the end, we’re just racing to answer all of them.
The session had a lot of energy and if you’re interested in learning more about TinySeed, even if you don’t plan to apply, it’ll be a fun listen. If not, delete it. I’ll be back with your regularly scheduled programming next Tuesday morning, US time. With that, let’s roll right in to our TinySeed Q&A. We are live. I love that TinySeed piece.
Alex McQuade:
I know. I love it so much.
Rob Walling:
I’m-
Alex McQuade:
It’s such a pump up song.
Rob Walling:
I’m very excited. It’s like Eye of the Tiger. I’m [inaudible 00:01:35] Rob Walling and I am here with Tracy Osborn…
Tracy Osborn:
Yep. Hey, happy to be here.
Rob Walling:
… Program…
Tracy Osborn:
Super happy.
Rob Walling:
… Program Director of TinySeed and Alex McQuade.
Alex McQuade:
Hello. Super excited to be here as well.
Rob Walling:
Program manager for our EMEA program. We have a lot of good questions. Looks like people are piling into the stream. Thank you so much for joining us today. This is our fourth or fifth time we’ve done this and every time we think A, there’s not going to be a lot of people that show up and we’re always wrong, and B…
Tracy Osborn:
We’ll just be [inaudible 00:02:03].
Rob Walling:
… there won’t be enough questions and we’re always wrong, right? This will be [inaudible 00:02:08].
Tracy Osborn:
It feels like we did did this last month. Time is…
Rob Walling:
I know.
Tracy Osborn:
… totally flies.
Alex McQuade:
[inaudible 00:02:11]? Yeah.
Tracy Osborn:
Mm-hmm.
Rob Walling:
I always leave here feeling energized and excited. Applications opened three days ago? Tracy, you want to talk a little bit about?
Tracy Osborn:
What day is it? It’s Monday?
Rob Walling:
It is.
Tracy Osborn:
Yeah.
Rob Walling:
It is Wednesday. Yeah.
Tracy Osborn:
Oh sorry.
Rob Walling:
No Thursday?
Tracy Osborn:
The applications opened on Monday. Today is Wednesday. Speaking of time flying. Yeah, our application round, applications are open. We’re taking applications for our spring 2023 batches, that’s Americas and EMEA open on Monday and they go through February 19th, which I think is a Sunday, Sunday at midnight eastern time.
We’ll be closing applications and then we’ll be starting the big review process. If anyone who is applying, just FYI, you have the ability to save your application so you can start your application anytime during this period. You just have to make sure it’s submitted by that February 19th date.
Rob Walling:
Save your application at any time. Brand new, super awesome functionality built by our very own…
Alex McQuade:
That’s a fancy feature.
Rob Walling:
… TracyMakes.
Tracy Osborn:
Yeah.
Rob Walling:
You want to talk about the new application we built?
Tracy Osborn:
Yeah, we might have… We’ve been talking about application systems for a while, I think, on our live streams and when we’re talking about startup ideas, we’ve always wanted an application system. We’ve really wanted to improve the user experience for the folks applying for the program. We have a new application system this round, testing it out, and it’s working really well. It’s a lot prettier, hopefully easier to use, has that save functionality. It’s a little goofier too, which is I think a fun, lots of little fun little touches we put into the system this round. Yeah, new application round, check it out.
Rob Walling:
Stoked.
Tracy Osborn:
A system rather.
Rob Walling:
Alex, before we dive into questions, anything you want to add about the EMEA batch? I know that the last time we added a sec… We are going to do one EMEA batch per year and then we got so many applicants, decided to [inaudible 00:04:01].
Tracy Osborn:
Yeah.
Alex McQuade:
I was going to say, that was our big announcement last round.
Rob Walling:
Yes.
Alex McQuade:
Two rounds. I would just say that I think it was the right decision. Our second batch was just as exciting as the first. The EMEA program is strong and growing. If you are in Europe, Middle East or Africa, come join us. Yeah, we’ve got a really strong group and I’m excited to keep it going.
Tracy Osborn:
Yes.
Rob Walling:
Awesome.
Tracy Osborn:
I see that little comment. New application system is five star. That makes me so happy.
Rob Walling:
Amazing. TracyMakes spent a lot of time on that. It’s great.
Tracy Osborn:
Yeah. You can see my former life was a designer. I was able to really fuss with it.
Rob Walling:
Dial it in.
Tracy Osborn:
Mm-hmm.
Rob Walling:
Cool. Well, let’s dive a little bit into questions. We have a lot of them coming in. I want to make sure we cover them all today. First question, what are some of the things, oh, what are some of the things that… Do we want to start with that, Tracy? Do we want to start with the other topics or should I dive into?
Tracy Osborn:
Hey, let’s talk about the application. Let’s just continue the little story about the application system.
Rob Walling:
Okay.
Tracy Osborn:
I think a little bit, I think, it’s really illuminating for us to go over some of the things that we value during applications, things that we’re looking for. If you don’t mind, I’m just going to lead off, we’ll do a brief overview here. We do also have a blog post, it’s… What is it called? What are the best fit startups for the TinySeed accelerator?
If you want to read it in full, we’ve listed out some of the top things we’re looking at in each application. Things like what’s your revenue, because TinySeed is a program focused on helping startups scale, not find necessarily product market fit or find their idea or really establish idea. We’re working for, looking for folks who are generally above 500 in MRR at the time of application and that can go actually way up. The minimum is 500 MRR.
If you’re at zero MRR, you’re just testing out your idea, probably isn’t the right time to apply for TinySeed. You still can and get on our radar and submit for applications once the company has grown to the level we can start scaling, but those are some of the things we’re looking at first is where you are in revenue levels so that the program works for you and helps you scale and you’re at the place where you can really take advantage of the things that we’ve built. That blog post has in full. What are some other things that you want to call out?
Rob Walling:
I want to piggyback on that and say that you don’t need product market fit to apply because if you’re at a thousand MRR, often you have very weak, if not any. We do help people strengthen product market fit and then scale up and we’ve accepted folks from, like you said, in that 500 to 1,000 MRR range all the way up to 100,000 MRR.
Tracy Osborn:
A hundred, Mm-hmm.
Rob Walling:
The biggest company that’s ever put part. That gives you an idea of the range [inaudible 00:06:52].
Tracy Osborn:
Range.
Rob Walling:
The other things, and we look at like, are you SaaS? Are you a software tool? Not 80% consulting, because we’ll have agencies apply and say, “We have all this revenue,” but it’s like…
Tracy Osborn:
Or physical product, which is like, yeah.
Rob Walling:
… it’s all [inaudible 00:07:05]. Right, physical product because we want to back companies we can help and we are really, we are world-class at this one little thing and it’s SaaS, B2B SaaS, right? We have evaluated like B2C is always on the edge and we kind of never do it because the churn’s too high and the price point’s too low. We like to see MRR. We like to see growth rate. We like to see is this probably in a niche that’s not going to be commoditized there.
We’re not scared of competition, but you can see certain trends in certain spaces where it’s like, “Ooh, there’s a lot of open source in that.” We may want to back away, but the TinySeed Q&A drinking game is I say Sunday, Sunday, Sunday so you can remember when applications in, and at this time it’s Sunday night.
Tracy Osborn:
Not this Sunday.
Rob Walling:
Not this Sunday…
Tracy Osborn:
Next Sunday. Yeah.
Rob Walling:
… but the next Sunday, Sunday, Sunday. If in doubt, fill it out. That’s the thing. If you’re in doubt, you can ask questions, like, “Should I apply?” My answer’s going to be, “Probably,” because it really, it takes about 10 to 15 minutes for you to apply. It takes us a minute or two to review. If you’re in doubt, you can certainly ask, but if in doubt, I would say fill it out.
With that, let’s dive into our first audience question. Ranma on YouTube says, “Hey, thanks for putting this together. How do we answer the ARPU, Average Revenue Per User, customer lifetime value? How many customers do you have? If we have a business that is transitioning to a SaaS model, but it has prior revenue?”
Tracy Osborn:
As you can tell, we like metrics.
Rob Walling:
Yes, we ask for a lot of metrics.
Tracy Osborn:
We are very metrics-focused. Yeah.
Rob Walling:
I’m going to say what I think and I’m curious if you two agree with me. I would say, put in your SaaS or software numbers and metrics and then we have a MRR clarification text field, and you can just put, in addition to this, we have consulting revenue, blah, blah, blah, blah. Just put it out. We are humans reading this. It’s not some AI. We will read through the application. I would tend to want the software metrics to be at the forefront as I skim down it and then something added. Alex, do you agree?
Alex McQuade:
Yeah, and I would say that’s how I would answer the question. I would also add, we sometimes get a similar question, what if my business is B2C, but I’m adding or I’ve started to add a B2B side of the business and obviously you said your focused on B2B SaaS businesses. Likewise, I would say share that with us. What are the metrics for the B2B side of the business? How much revenue have you started to generate there?
You can also share the B2C side. We’d like to hear that, but we’ll primarily be interested in hearing what traction you’ve gotten on the B2B side. Yeah, I think the MRR clarification field is the right place to just give us some context. We’d love to hear what you’re doing and some background.
Rob Walling:
All right. Next question from Plugged In on YouTube, “How many people apply and how many people get in?” We don’t publicly release detailed numbers. I will say, we’ve had, I forget if it’s like, it’s several thousand, 3,000 applicants, but that’s across all of the batches. We accept around 2% of applicants maybe.
Tracy Osborn:
I was going to say 3%.
Rob Walling:
Somewhere in that range.
Tracy Osborn:
Yeah. Mm-hmm.
Rob Walling:
It’s like 2 to 3% get in. More exclusive than Harvard University.
Tracy Osborn:
Yeah. Again, we’re looking for folks that can take advantage of the program, who can really benefit from the education and things that we put out there. It’s not like 100% of those folks are good fit and we’re really narrowing down to that tiny percentage. Look at that blog post. You can again see what we’re looking for in terms of applications and in terms of best fits. Obviously, the folks who are best fits for TinySeed. The acceptance rate is a lot higher.
Rob Walling:
Yep. That’s true. All right. Plugged In, nope, nope. All right. Chad on YouTube, “Do you fund companies that are direct competitors of a portfolio company?” We have funded 107 companies, give or take.
Tracy Osborn:
Mm-hmm. Yeah, yeah.
Rob Walling:
Right, 105, 107. In the next two years, we will be over 200. We will inevitably… Inevitably, we will have to back companies that are competitors. Now, there are some except, A, we’ve tried really hard not to back two competitors in the same batch. In fact, to date we have not.
The other thing is there are some spaces that are small and I think if, let’s say, you’re an email service provider or you’re ERP, these are massive, massive spaces. Could we back three, four competitors and all of them can win? Yes. But if you’re talking scheduling software for dry cleaners, there’s just some, that’s probably a pretty small niche and I would personally be resistant to doing that. The answer is yes, but it depends on the specifics.
Tracy Osborn:
Mm-hmm. Yeah, we get this and the previous question, we said like 3%, I should say that we were looking at about 30 companies across Americas and EMEA per round, I would say, for the spring 2023 round, approximately 30 companies in total, so that means like…
Rob Walling:
Twenty three.
Tracy Osborn:
… if we’re going to be doing that twice a year, 60 companies per year, then, of course we’re going to be looking at competitors, especially as the years go on. I think we have a lot of things in place to make sure that we, for anyone who might have small overlaps with other portfolio companies, to make sure that we can provide both of them the best support and the best advice and everything to help them both grow.
I should also say that during the application system, of course, we’re going to be seeing data from folks who are competitors within the application system. People are applying for competitors who current portfolio batches, and they just want to ask those questions. The application system itself is also completely confidential. We do not share any of the information that comes in through the applications. We don’t share that with anyone outside of the immediate program team, which is the three of us as well.
Rob Walling:
The three of us, yeah.
Alex McQuade:
Mm-hmm.
Tracy Osborn:
Yeah, the three of us and [inaudible 00:13:13] said, who is the other partner of TinySeed? Just want to reassure that if you’re a competitor to any of our portfolio companies that you’re applying that the information that’s on your application is completely confidential.
Rob Walling:
Question from Devin Perrick, “We’ve applied in the past, but feedback has been that our revenue traction wasn’t where it needed to be. That said, is there a sweet spot for current MRR and year-over-year growth?” What do you think Alex?
Tracy Osborn:
Kind of depends, right? Oh sorry, go ahead.
Rob Walling:
[inaudible 00:13:41].
Alex McQuade:
Actually, I don’t think I have a sweet spot number.
Rob Walling:
I know.
Alex McQuade:
It does depend [inaudible 00:13:48]. It depends on where you were. It depends on, I think, it also depends on what you’re working on. That’s another interesting part of the application. There’s a field about your customer acquisition funnel where you can share what you’re doing and that gives us more context on what direction you’re headed. I don’t know. I feel like I don’t want to opt out of this question, but I don’t have a specific number in mind.
Rob Walling:
Yeah, I think for me…
Tracy Osborn:
[inaudible 00:14:14].
Rob Walling:
… each of us, there’s four of us, well, there’s four of us who review and each of us has, I think, different criteria, which is good. There’s diversity of opinion there. I start to feel uncomfortable when like MRR is below 1,000 I’m not saying we have funded companies below 1,000, but it makes me, it’s like that’s really early, but we have funded-
Tracy Osborn:
There has to be other factors, right?
Rob Walling:
Yes.
Tracy Osborn:
It’s like what is the team done in the past and what are some of the things that they might have done that’s not relating to revenue but might be still contributing to growth that. There’s like factors that would make us more comfortable with a pre-1000, but in generally yeah.
Rob Walling:
It makes sense.
Tracy Osborn:
[inaudible 00:14:50].
Rob Walling:
I mean, I think once you hit 2 or 3000 MRR, I start to feel like, “All right, they’ve landed some stuff,” as long, but then it’s like, well, we’ve had companies apply with 3,000 MRR and they have one customer paying them 3,000. It’s like, “Okay, so now I’m less comfortable.” This is where the it depends happens.
For me, though, in between that two and three, up to about, I’d say most recently about 40k MRR, 40 or 50 is where we’ve been funding. I think if you’re above 40 or 50, we should probably talk about you using our syndicate to get funded unless you really want to be part of the accelerator.
Tracy Osborn:
Yes.
Rob Walling:
Then, in terms of growth, I got to be honest, we don’t really look at year over year. We look at month-over-month growth. We ask for your previous six months of MRR and-
Tracy Osborn:
Kind of filled out that. If you’ve applied before in previous rounds, this is one of the few new fields where we’re asking for each month for the last six months what your MRR is.
Rob Walling:
Yep.
Tracy Osborn:
Yep.
Rob Walling:
Ken on YouTube asks, “Have you funded companies that are still in the product development stage, pre-revenue?”
Alex McQuade:
[inaudible 00:15:48].
Tracy Osborn:
We have.
Rob Walling:
We have [inaudible 00:15:51].
Tracy Osborn:
We’re not doing it now.
Rob Walling:
The problem is, you think you’re going to get to growth next month or six months and it’s actually three years.
Tracy Osborn:
Which is fine.
Rob Walling:
We funded, yeah.
Tracy Osborn:
But, it might not be-
Rob Walling:
Don’t apply yet.
Tracy Osborn:
The-
Rob Walling:
The timing is not good.
Tracy Osborn:
Yeah. The calls, the mentors we bring in, we’re all going to be talking about things that are going to be [inaudible 00:16:11] to be listening to those calls and not be able to apply the things that we’re teaching immediately because you’re still working on that initial set of customers like the, yeah.
Alex McQuade:
Yeah. The nice thing is we have two batches per year. The wait time for the next batch isn’t that long. Six months from now, if you’re post revenue, you have traction, then, it’s a great time to apply.
Rob Walling:
Kimmy Med on YouTube, “As for pre-revenue companies, how should we address revenue churn and customer churn?”
Tracy Osborn:
I want to say that those are text fields. You can put it as zero and we’ll just…
Rob Walling:
[inaudible 00:16:48].
Tracy Osborn:
… interpolate from the fact that the, if your MRR is zero, then we’re not, we just not probably not even going looking at those fields. You can put in anywhere.
Rob Walling:
DJ Enzo or it might be DJenzo, I think it’s DJ Enzo 240 gamer, ooh, that’s a heck of a handle on YouTube, is B2B2C accepted? Alex McQuade, what do you think?
Alex McQuade:
B2B2C? Yes, I would context, but yes, I would think we’d want to see your application.
Tracy Osborn:
Definitely. Yeah.
Rob Walling:
Yep. Please apply.
Tracy Osborn:
Yeah.
Rob Walling:
Same username, I won’t say it again, “Is $220,000 the max funding?” If you go to TinySeed.com/program, you can look at our funding terms and we talk about it.
Tracy Osborn:
Yeah, slash FAQ jumps straight to the bottom of the page where it has more details about those funding terms.
Rob Walling:
Yeah, we invest between 120 and 220,000 per company for 10 to 12% equity. There have been some exceptions, like let’s say the company that applied at 100,000 MRR, we went slightly above 220. Yes. It’s as with all these things, we are humans and it depends a little bit depending on how much success you had. If you’re doing 1000 MRR and want to come in and raise 250k from us, that’s not going to be a fit, but obviously if you’re big or going very quickly, we do have some room to talk about it.
Tracy Osborn:
Yeah. We discuss these things with the founders. When we give the offer, we’ll have this discussion and we’ll give our best offer. The discussions can continue after the offer, too. So, we set what we think is fair. Discussions can continue. There is some legal room, but in general, if you’re looking for $500,000, you probably want to go to the TinySeed syndicate instead or other numbers.
Rob Walling:
And you need to have the progress to do to be there. And I would say that the vast majority of our offers, if you’re in that kind of sweet spot MRR range, it’s a standard offer. Again, we’ve funded 107 companies. We cannot negotiate individual term sheets. We can’t negotiate individual terms. Our terms are standard. We have docs that, again, a hundred-something founders have signed and they’ve been vetted and switching those would be very difficult to keep track of. Follow-
Tracy Osborn:
Let me jump in one more thing because sometimes people want to negotiate the percentage we take as well. And sometimes people say like, “Hey, this seems higher than a typical angel investment.” And it is because of the TinySeed program, because of that yearlong accelerator, because of everything you get through the program is one of the reasons why at first glance that percentage we take seems like it could be higher than a typical angel investment.
Rob Walling:
Right. That’s a good point. It’s the value. Our valuation is lower. We are not the cheapest money you will receive. No doubt. You can go to the dentist or the doctor down the street and absolutely raise money at maybe 2x the valuation we’re giving. Our value is not in the money we bring. That’s part of it. But our value is what Tracy’s talking about, which is world-class mentors, tinyseed.com/people. And look at the mentor list. It’s incredible. It’s the who’s who of B2B SaaS founders. You will have access to have to them. You’ll have access to me and Einar Vollset, Tracy and Alex. Like kickoff retreat, in-person, where we hang out for two and a half days. It will blow your mind, so [inaudible 00:20:07].
Tracy Osborn:
Yeah, the community, over 200 founders now within the TinySeed community. So, not including the team and the mentors and whatnot, we have this huge list of other star founders that are all going through the same thing together. And so, yeah, definitely the value is in the community, the mentorship, the advising, the resource that we can give. And then funding is great, but is definitely after those.
Rob Walling:
That’s right. Third or fourth on the list for most founders. So, they’re like, “Oh, yeah, the money’s great.” But the real long-lasting value is this year-long accelerator. No one else does a year-long accelerator program. And we do that.
Alex, I just mentioned the kickoff retreat that we do in-person. We do, what, two a year in Europe and two in America. Do you want to talk just briefly about what that entails?
Alex McQuade:
Where to start? The kickoff retreat personally is one of my favorite parts of the program. I mean, there’s a lot to compare it to, but it’s a really fun part of the program with a ton of value. So, approximately within a few weeks of when the program starts, we have a kickoff retreat. We bring together everyone who’s available to a location and we have dinners, we have masterminding, we have activities.
And the kickoff retreat, it has a few goals of mine. One, it is a good time, but two, it’s to start building relationships with the other founders in your batch. Part of the goal, one of the goals of TinySeed is for you to be building this relationship with other founders. These are founders who are going to be helping you over time, giving you feedback on your business, especially within your batch. These are people that you trust and that are just able to understand what you’re working on and be there alongside you. So, the kickoff retreat has that goal. And yeah, it’s an incredible value.
We mastermind half the day, so we spend time digging into your business, going over what your biggest challenges are. And on top of our team, you have a room full of founders who are just providing feedback based on their experiences, their advice. It’s a ton of value. And then we go out and we do these social activities. What have we done? We’ve done road trips.
Tracy Osborn:
It’s like half work, half play.
Alex McQuade:
Yeah. Half play.
Tracy Osborn:
Always know how to have a fun thing.
Alex McQuade:
Yeah, you can’t work all day.
Tracy Osborn:
I think the upcoming one, we’re working on the one that’s going to be happening for Americas. We’re going to have separate ones. Americas is going to be in April. Mia kickoff batch will be in May. And as the person who’s running the Americas’ one, I think we’re looking at indoor skydiving. Rage room where I guess you just go in the-
Rob Walling:
Yeah, the rage room. [inaudible 00:22:39] last time.
Tracy Osborn:
The rage room where you just go in and smash things. [inaudible 00:22:40] was last time. And then I’ve already volunteered very strongly for leading the zip lining crew.
Rob Walling:
Zip lining. Yeah. And we did hot air ballooning once. We do boat trips. We do, you know.
Tracy Osborn:
That was fun.
Rob Walling:
And it’s just a few hours in the afternoon where you keep talking about work, you keep talking about your business. So, it’s not like you’re screwing off in the afternoon. You’re just able to mix it up and have an activity and continue to talk about this.
Tracy Osborn:
Yeah, and have an experience together.
Alex McQuade:
Yeah, that’s true. We find the mastermind continues into the activity. People think later, “Oh, I remember you were discussing you had this issue. I just had an idea come to mind. Have you tried this?” So, it’s a great way to do that.
Rob Walling:
People, founders come away from it raving, just like, “I had no idea how valuable.” Already, someone told us last time like, “If I knew how valuable this would be, this makes the whole year for me.” Just these two and a half days just totally changed the way he was thinking about his business. Ron has posted that a couple of people are asking about…
Tracy Osborn:
Producer Ron.
Rob Walling:
… Producer Ron. Thanks. Asking about the next round of applications will be open after this one. So, if someone is pre-revenue now and they want to get to the point where they can apply, Tracy, do we have an idea? Because we run twice than the others.
Tracy Osborn:
We have a date. It still could be changed, but it would only change within the weeks. But right now, the fall 2023 applications are going to be starting in early September. So probably on, if you’re in the US or Canada, on Labor Day and going for two weeks just like this round. That could move back and forth like a week just depending on how things roll through the summer, but essentially it’s got to be early September.
Rob Walling:
Early September. Excellent.
Tracy Osborn:
And then that batch will be starting in November.
Rob Walling:
Paula on YouTube asks, “Our company operates fiscally in the US. We’re a Wyoming LLC. We work physically in Europe, in Italy, and we have applied for Tennessee Americas. Is that a problem?”
Alex McQuade:
Can I take this one?
Tracy Osborn:
Yep.
Alex McQuade:
I don’t want to steal it all away from Tracy, but I’m going to…
Tracy Osborn:
Yeah, I know, but you are.
Alex McQuade:
… tell her, “Come on over.”
Rob Walling:
You are. Yeah. I can see it.
Alex McQuade:
But I’ll answer. I do want to steal you, Paula, but my answer I think will both be useful for anyone else that’s in this situation. If you’re in this situation, if you’re based in Europe, I would highly suggest applying for the EMEA program. And the reason for that is because the EMEA program was made to be convenient for people who are in the EMEA region. Our calls are on European time zone, business hours.
Obviously, our retreat that we were just talking about, that’s going to be in London this year, so that’s going to be easier to get to. The other founders are in the region. It’s just more convenient overall here in that region. Of course, you can definitely apply for Americas, but I think it will be a better fit for you. So, Paula, if you want to reach out to me, let me know your company name, I can switch that over.
Tracy Osborn:
Let’s switch that for you. I will say whatever one you’re applying for, by the way, it can totally be changed. We’ll have these discussions with you during the application, or excuse me, during the interview stage, so we have a “don’t know” option in the forms. You can also choose that and then we definitely will reach out. And if you’re a good fit for TinySeed, we talk about which program works better for you. Essentially, they’re the same program. The time zone our calls are scheduled on are different. So, Alex’s calls are going to be, like you said, convenient for folks who are in the EMEA regions. The calls that I schedule are very convenient for Americas. Anyone in the world can apply.
Folks in the APAC region, we don’t have an accelerator just yet for the APAC region. So, folks in Australia, Japan, New Zealand, they have been joining TinySeed generally on the Americas side of things, and then the calls are at really inconvenient hours. We have people who are joining us at 5:00 AM if you want to join. Sunday, we’ll get there.
Rob Walling:
They’re watching the recordings.
Tracy Osborn:
But we have the recordings, yes. Everything is recorded and nothing is mandatory to join. So, even folks who are in the Americas batches that are super busy, they can not attend the calls live and just review the recordings afterwards. So, all of that works for us, but really, if you want to attend the live calls, which we recommend because they’re really fun, then that’s where the differences in the program really lies.
Alex McQuade:
Yeah, and I just remembered, too. I know you mentioned, Paula, that you’re incorporated in the US. I think just to mention, that’s fine as well. You can be part of the EMEA program and incorporated in the US.
Rob Walling:
For sure. Ryland on YouTube asks, “Do you expect successful applicants to focus all their professional resources on the company, on their startup? In other words, can candidates still have day jobs?” Alex? Tracy?
Alex McQuade:
Yes.
Tracy Osborn:
I was going to say yes. [inaudible 00:27:08] focused.
Alex McQuade:
Well, one of the things we ask is that if you’re accepted into TinySeed that at least one founder in the company is full-time in the business by the time the program starts. Hopefully, one of our hosts with the funding that that will help take care of any financial concerns you have. But really, we believe that the program will be able to better serve you if you’re able to focus solely in your business and really dedicate all of your energy to it. We’re going to be giving you a lot of information, a lot of resources, and you’ll be able to grow faster if you’re able to dedicate that energy.
Rob Walling:
With all the info we give you, if you work on nights and weekends, you’re going to be overwhelmed. You’re not going to be able to keep up. So, we do tend to fund, it’s not a direct formula based on the number of founders, but if you have one founder go full time and one not, you will get less money. You will get a lower valuation than if both go full time. And we have had all those situations happen where we’ve had one founder go full time and one not.
Adam on YouTube-
Tracy Osborn:
One last thing, just apply, even you’re not in a situation. If you’re not full-time, feel free to apply. And we’ll have that conversation with you. We’ll learn your plans and then we can talk about what the schedule should be for you and your company if we give you an offer. So, yeah, definitely apply. If you’re part-time, definitely apply. If you’re not working full-time, anything like that, definitely apply.
Rob Walling:
Adam on YouTube asks, “What is the process once you have shortlisted the most suitable applications?” Tracy, what do we do with the shortlist?
Tracy Osborn:
Let me do the full rundown of the process. So, all the applications come in and then the four of us, Alex, Tracy, Rob, Einar, we all go through and re-rate them, internally. And then that kind of helps us determine the folks who move on to the next stage, which is an initial interview with either Alex or myself. And so, of course, I take the ones that are going in the Americas direction and Alex takes the ones that are going into the EMEA direction. And we kind of split the folks who are aren’t sure.
After that initial application interview, that initial interview, then for folks who are still a good fit, then they move on to the call with Rob and Einar. And after that call, we are generally able to make a determination between the four of us of folks who are good fit for TinySeed and will receive an offer. Anything I missed?
Rob Walling:
There it is.
Tracy Osborn:
Okay.
Rob Walling:
I think you’re good. Let’s see. I don’t know, did we disclose this? Tracy Slav on YouTube asks, “How many AWS credits does the AWS partnership provide?”
Tracy Osborn:
We don’t disclose it. I don’t think we can due to our agreement with AWS. But I will say that if you look up if there’s public AWS credit programs, ours is higher and that’s why we can’t say it.
Alex McQuade:
So, people are usually pretty happy with the [inaudible 00:29:55].
Tracy Osborn:
Yeah. Exactly.
Rob Walling:
Amir on YouTube asks, “I’m doing AI automation for E-commerce operations. Are you still investing in the E-com space?” Alex McQuade, are we investing in the E-com space?
Alex McQuade:
As long as you’re a SaaS, yes.
Rob Walling:
There it is.
Alex McQuade:
There you go. I mean, straightforward.
Rob Walling:
Absolutely. David, on YouTube, “Do you back solo founders who are building part-time due to go full-time soon?”
Tracy Osborn:
Yes, yes.
Rob Walling:
That’s right.
Tracy Osborn:
We love solo founders.
Rob Walling:
Loves them.
Tracy Osborn:
Alex, we’ve mentioned that quickly. There are some other accelerator programs out there that are like, “You must have a co-founder.” We’re not that one. We love solo founders. We love multiple founder teams, of course, as well and that’s actually another part of that blog post I keep mentioning. The one that’s best fit startups for TinySeed. We talk about the number of founders. So, solo founders are awesome. If you’re at four founders and up, then we might have more questions for you.
Rob Walling:
Starts to be a lot. Yeah. But we-
Tracy Osborn:
Yeah. There’s some things there. But solo founder is great. If you’re going to go full time at some point, that’s great.
Rob Walling:
Yeah, and I think if I were to guess, I’d guess 60 or 70% of the companies we have funded are single founders. And I think-
Tracy Osborn:
I think this is the value of the program, because like I said, the number one value of the program is that community that’s within other founders. And as a solo founder having a community of fellow founders is hugely valuable. It’s a great benefit for the program because it’s really lonely being a solo founder.
Rob Walling:
Right, and it’s also-
Alex McQuade:
That’s what I was thinking, too, yeah.
Rob Walling:
It’s also the MicroConf community as a whole. We do the state of independent SaaS and it’s somewhere between 50 and 60% of MicroConf TinySeed type companies are single founders. And that’s very different than the venture capital landscape. Yeah.
Julius on YouTube asks, “If a business was built on using a current white label SaaS platform, would that be considered too much platform risk to apply?” What do you think, Alex?
Alex McQuade:
That’s a tough one. The business is built on our current. I might hand that to you, Rob.
Rob Walling:
I love putting Alex on the spot. It’s my favorite thing.
Alex McQuade:
Yeah. I think it’s a little… let me re-read that one.
Rob Walling:
It’s not too much. If in doubt, fill it out.
Alex McQuade:
Yeah, definitely apply.
Rob Walling:
We will-
Tracy Osborn:
I think it depends on the program, the platform, too.
Rob Walling:
Yeah, it does. We should just call that out in your application, please, so that we see it. Don’t try to hide it. Don’t make us dig it up. Just say, “This is built on this white label platform,” and then we’ll have a conversation about it. In my opinion, it is not too much platform risk to apply. We’ve had folks with as much more platform risk who have gotten into the program. And it’s just about managing that and understanding that risk is there and figuring out ways as you grow to mitigate it.
Jacob on YouTube, “What’s the difference between TinySeed and a traditional VC firm?” That is one of my favorite questions. You want to kick this off, Tracy?
Tracy Osborn:
All right. I’m grabbing it. I’m super excited.
Rob Walling:
All right. Do it.
Tracy Osborn:
The number one difference I think is the optionality that you get with TinySeed as compared to a traditional VC firm. Folks coming into TinySeed, if you want to continue bootstrapping after taking our investment, that’s totally great. A lot of VC firms, they want you to go in and raise money from them and then make plans for your seed, and make plans for your Series A, and then make plans for this. And then you’re like you’re on this constant accelerator-
Rob Walling:
Extra wheel.
Tracy Osborn:
Accelerated a process of always raising money. And I think, what is it, 60 to 70% of the companies that go through TinySeed go back to maybe semi-bootstrapping. Or still being like you say in indie state of mind while taking TinySeed money and then not raising for money. That does mean that there are some companies that go on and raise further investment. That’s awesome, too. Einar VoIlset is your partner in crime if you want to raise more money and he will walk you through that process and help you out. And we have resources within TinySeed to help people raise the next round of money if they want to do that.
We’re also totally happy if your plans is to go big and sell. That’s great. Let us know that. I want to emphasize the go big part. So, if you want to come into TinySeed and sell as fast as possible, there might be some issues. And Rob, do you have a better way of explaining that part?
Rob Walling:
Yeah. I mean, basically, venture capitalists-
Tracy Osborn:
You have to be ambitious, yeah. Go ahead.
Rob Walling:
Yeah, we have to be. You want to be an ambitious bootstrapper. I mean, if you want to build a half a million dollar ARR company and that’s amazing, you should go do that. But TinySeed can’t invest. We want you to shoot for at least $1 million, $2 million in ARR and frankly, to not sell too early. If you want to sell for $2 or $3 million, that doesn’t provide an adequate return for our investors.
We are a two-sided marketplace. We have LPs who invest and they’re taking a big risk by funding B2B SaaS companies in the early stage. And then we have founders who are giving the money, too. And so, basically, but here’s the difference. If you take venture money, they pretty much won’t invest if there’s not a potential for you to be a billion dollar outcome. Half a billion, a billion.
I like to think of our minimum as around a $10-million exit if you decide to sell, $10, $20s, that works. We’d love to see $50 million. But yeah, if you sold for 10 million, nah, all right, cool. That’s good for you and good for us. If you did that as if you raise venture money and do that, they’re going to be mad. That’s not the outcome they’re looking for.
Tracy Osborn:
Yeah. Exactly.
Rob Walling:
Right?
Tracy Osborn:
Mm-hmm.
Rob Walling:
So, the outcome is one. We also allow our companies to run profitably if you wanted to run profitably for a decade and pull out profits. That’s an option, right?
Tracy Osborn:
Mm-hmm.
Rob Walling:
Completely different. No venture fund would let you do that. We also run this year-long accelerator with all the support we’ve talked about. Venture funds do not do that. They write you a check and then they sit on your board and they’ll give you some advice. But the amount of involvement we have is 10 times what you’d get from a typical VC firm. In addition, venture funds in the US fund, Delaware C Corps. That’s it.
If you want to be any other entity, don’t bother. You have to convert. We fund C Corps, we fund LLCs, and we fund a select group of, I’ll say, non-US entities like London, or not London.
Alex McQuade:
UK.
Rob Walling:
But UK Limited. There’s a couple of countries that we have.
Alex McQuade:
Germany.
Rob Walling:
And that is not the case with venture. They will do Delaware C Corp. So, I think those are the main differences.
Tracy Osborn:
Yeah. I mean, in addition to everything else, like the program I think we talked about a lot. But if the plans you have as a company, I think, you have a lot higher, like larger range of options with TinySeed.
Rob Walling:
Good question coming up from Caloyan on YouTube. “What does the access to mentors look like? Do we do calls? Do we have direct communication? Can we send emails? How much are the mentors involved?”
Alex McQuade:
Mind if I steal this one?
Rob Walling:
Do it.
Alex McQuade:
Because I love to gush about our mentors. So, there’s two ways that mentors are involved. One, in our batches and two, one-to-one, so I’ll cover the group aspect first. After we finish the playbook part of the program in the first six weeks where every other week we’re covering a different topic that is essential as SaaS growth. Those are hosted by Rob and Einar.
Tracy Osborn:
We’ll say it’s more in six weeks because it’s every other week. I think it’s like three or five.
Alex McQuade:
I’m sorry. I say six sessions every other week, yeah.
Tracy Osborn:
There we go.
Alex McQuade:
We move on to mentor calls. And so, continuing, every other week, Tracy and I will be scheduling calls with one of our mentors who will come on and talk a little bit about their subject of expertise, but also, answer questions from the batch. So, this is a great time to come with a long list of questions. Maybe, it’s a marketing mentor and you can share issues you’re having with your marketing plan, hypothetical questions and kind of get some feedback.
Tracy Osborn:
Yeah. Like yesterday, I did a call with April Dunford, who’s the author of Obviously Awesome, and the premier positioning expert. So, she came on yesterday and was able to take positioning questions from all Tennessee founders and it was awesome.
Alex McQuade:
Yeah. And the groups are a great way because hearing other founders questions is super useful. Usually, things come up that you may not have thought of on top of your head, but is definitely useful in the future. But on top of that, you also have one-on-one connections with the mentors.
Usually, what we recommend doing is using this part of the program is when you’re facing a specific challenge, maybe a roadblock or you’re taking on a new initiative within the business. And you need some insight from a mentor that will help you boost ahead and save all the weeks, months of figuring it on your own, that’s a great time for it to reach out to Tracy or I and we’ll hook you up with a mentor. Often, they’re calls. Sometimes, they’re emails. It depends on the mentor and their availability. Of course, who are mentors are-
Tracy Osborn:
Yeah, so some folks on our Slack, they’ll do DDMs, yeah.
Alex McQuade:
Yep. Our mentors are all volunteers. They’re also running their own businesses, so we try to facilitate based on their availability. But they’re super generous of their time and they’ll jump on and provide advice, feedback. And the goal there is, like I said, to help you save time and not have to go through so much of what you normally would have to do on your own.
Tracy Osborn:
Yeah. Alex and I, one of our top role, both of our roles is really to make sure that founders get the information they need. And so, we’ve built a whole slew of systems to juggle these really amazing mentors. Making sure that that folks have really quick access to all the mentors when they need it. Ways to redirect requests if there’s a mentor who’s not available at that time because the folks can be busy because we have such really amazing mentors. The processes that we have built for this are quite extensive. And it’s also, we can make sure that the founders have the best experience possible.
Alex McQuade:
Yeah, and you don’t even need to know what mentor you need. You can just come to Tracy and I and say, “I’m struggling with this. What should I do? Who should I talk to?” And we’ll take it from there. We’ll connect you with the best, resource the person, who will help you move forward.
Rob Walling:
Right. And that’s one of the big benefits that I think people maybe don’t understand is how deep our mentor network is. And there has not been, I can’t think of a topic that we haven’t found someone for them to talk to.
Tracy Osborn:
And some niche ones.
Rob Walling:
Really niche.
Tracy Osborn:
We’ve all had, as a team, the four of us have had to put our brands together, and really work through it.
Rob Walling:
And sort. And that’s the thing is as a founder, don’t underestimate how many weeks or months the right advice at the right time can save you. My sales, I’m not closing as many sales demos.
Tracy Osborn:
Shortcuts.
Rob Walling:
Exactly. It’s this cheat code. It’s like, “Oh, well, send me a video of your demo, we’ll review it. Oh, well here’s like four things you’re doing wrong.” And it’s like boom, changes the trajectory of the business. It’s stuff like that. Copy. There’s design. Tracy, I know you did design teardowns. All kinds of stuff. Questions are coming in faster than we’re answering, so we’re going to lighting round it a little bit.
Tracy Osborn:
Right. Lighting, yeah.
Alex McQuade:
We always worry about this.
Rob Walling:
I know. So, Jacob on YouTube asks, “If we are accepted into the accelerator and are successful, are we eligible to come back and raise through the syndicate in the future?” Absolutely, yes. You’re eligible to raise through the syndicate now if you wanted, assuming you meet our requirements or if you’re a TinySeed company…
Tracy Osborn:
That’s a great path. We have all sorts of systems.
Rob Walling:
… that’s the point. That’s one of the points, one the reasons we started the syndicate was to be able to help you with following funding.
Shakat on YouTube asks, “Would you accept an application for a B2B SaaS where the business and the customers are outside of the US? It’s a health tech app and the US has laws and similar product already, hence, we are targeting APAC customers in the business outside of US.” I’m seeing nods of agreement.
Alex McQuade:
Yes.
Rob Walling:
Absolutely.
Alex McQuade:
The reason why it’s [inaudible 00:41:38].
Rob Walling:
We have done that.
Tracy Osborn:
Yeah. I mean the challenges you’re going through in building your own company in terms of finding customers and working on your pricing and learning the sales process and going enterprise sales, that’s all at universal for B2B SaaS.
Rob Walling:
The question from Rebo, and it’s a two part question. Well, they ask it as one part. They say, “Hi, we recently received a grant, but our MRR is less than $500. Could we apply to TinySeed and get through?” And I want to break that into two questions. If you have received a grant and you want to apply to TinySeed, yes, we have actually funded companies that have non-equity grants. Basically, from their government, from a competition or whatever, so yes.
If you’re less than 500, I’d say, and you want to apply, apply. The odds of you getting funding through us are a lot lower. We generally encourage people to be $500 and up, but you can certainly do it. We have some folks who apply for the experience of applying. You actually learn stuff about your business.
Tracy Osborn:
Yeah. One of the questions we asked is if you applied before, and what Alex and I do is go and find your previous application and link them, so we have that full set of history. So, if you applied before, very likely we’re going to get an email saying that, “Not right now.” But then you apply again, when you’re there, we have that history and arguably it can tell a really good story.
I’m not going to say it’s going to increase your chances of getting in, but we’ve had, was it Tony Chano of Cloud Forecast applied four times, I think before.
Rob Walling:
Three or four?
Tracy Osborn:
Three or four times before getting in. And because we can see that journey that he took and the progress. And then at that last time, it was like, “We can’t say no. This is great.”
Alex McQuade:
Yeah. I think some people worry that having applied again is a negative in our mind and it absolutely is not, it’s not.
Tracy Osborn:
A huge bonus. Yeah.
Alex McQuade:
Yeah. We love to see it. So, if you’ve applied before, do not hesitate.
Rob Walling:
Yep. We have funded many, many companies on their second or third or maybe even some fourth, I mean, so yeah, do it.
DJ Enzo asks, “Any chance of the APAC accelerator starting this year?” No chance of that, DJ. I’m sorry.
Tracy Osborn:
The economy didn’t go in the right direction for that.
Rob Walling:
It’s not. Yeah, there’s so much to be done there.
Tracy Osborn:
We want it, but not there yet.
Rob Walling:
Yep. Web Developer Ninja asks, “Any Azure credits as part of your perks?”
Alex McQuade:
I was just researching this. I don’t remember the number off the top of my head, but we have a link to that in our perks.
Rob Walling:
So, we do have perks, Azure perks?
Alex McQuade:
Yes.
Tracy Osborn:
I think Alex, you just set that up, right?
Alex McQuade:
Yeah. It’s a universal. I can share more information, but yes, you would qualify for Azure credits through, yeah.
Tracy Osborn:
If you go to tinyseed.com/perks-overview, it has logos for everyone we have in our perks page. It probably is missing some, but there’s a lot, which is why I was saying of like, “Do we have that one?” Because we have so many perks at this point, I’ve forgotten who we have.
Rob Walling:
I don’t remember. Yeah.
Tempest Media asks, “We are larger than your 50K MRR sweet spot. We are growing 50% a year. We are very interested in the accelerator portion of the value. Our company is greater than 40 or 50K still accepted?” Absolutely. We have accepted companies. Again, we accept an company accelerator at 100. We have it several in the 70 to 80,000 range. There is no cap.
Tracy Osborn:
I think our average is 18 and our median may be lower, but it’s all over the place, yeah.
Rob Walling:
It is. And so, yes, please apply. We’d love to chat with you.
DJ Enzo, “Do solo founders or founder startups with awards get an edge?” I don’t think either of those would give you an edge. We like solo founders, but if you were a one-person or a two-person team and you’re have the same numbers and the same business, to me, it’s all the same. And awards don’t care for me at all.
Tracy Osborn:
We don’t ask for that. I don’t think I’ve ever asked anyone about awards. I mean, it’s great. It tells a great story. It’s an award, especially if say it’s an industry award for something that you’re building and that could be proof of your company is growing at so and so. But then you have this award and it really shows that your industry is really into what you’re building. That could be a factor in our decision.
Rob Walling:
Paolo asks, “Our company is an infrastructure as a service provider. Since TinySeed is an Amazon partner, they are our biggest competitor. Are we still eligible?” That’s a funny question.
Tracy Osborn:
That’s a funny question. Well, Amazon has no insight whatsoever in what we’re doing, especially any big company. I only know they know we exist. Other than the fact that they have a perks program and they email me.
Rob Walling:
That’s it. Yes, you are eligible. Please apply. Chris. We might end early on this one. We’ve got a good lightning round going.
Tracy Osborn:
It’s too lightning.
Rob Walling:
Chris Bach on YouTube, “Do you take post revenue startups, so bootstrapped and have revenue that really need more connections and advice?”
Tracy Osborn:
Yes. That’s why we’re here.
Rob Walling:
That’s one of our big value props, yes. But what we’re not going to do is, we get this question now and again, “Can I go to the accelerator and not take any funding?” And it’s like no, because we’re not a nonprofit. We’re not a charity. You know what I mean? Part of this is that we need to have an upside.
Tracy Osborn:
We’re that two-sided marketplace.
Rob Walling:
Exactly.
Tracy Osborn:
Like you said.
Rob Walling:
Exactly. We need to have an upside. And so, we give you six figures in US D in order to have a bit of equity. But absolutely, connections and advice, mentorship, these are-
Tracy Osborn:
I will say shout out to MicroConf because we have MicroConf Connect, which the program’s take a read on the MicroConf side of things, the MicroConf conferences. So, if you want to have access to something that’s similar to TinySeed in terms of the advice and the focus, MicroConf is the way you can get that without having to go through the accelerator or get investment.
Rob Walling:
Goku Madon asks, “Do you have any companies that have applied to TinySeed in the past that are only enterprise sales? Or does TinySeed even make sense for a pure enterprise SaaS app?” Yes, indeed, we have.
Tracy Osborn:
We love enterprise.
Alex McQuade:
Yeah. Please, apply. You sound great.
Tracy Osborn:
A lot of-
Rob Walling:
High touch, low touch as long as we’re going to be-
Tracy Osborn:
Yeah. We’re not going to push people into what they don’t want to do. But I will say a lot of folks come into TinySeed and then they start their enterprise program, because there’s a lot of value in enterprise.
Alex McQuade:
Yeah, that’s a good point, yeah.
Rob Walling:
Yep. I would say it’s part of it. I was going to say it’s a big focus, but look, we also have low touch, no-touch funnels, that’s great, too. We service, we’re funneling [inaudible 00:47:55]-
Tracy Osborn:
But it’s like overwhelming, which is why there’s a lot of information there in terms of how to run enterprise things. So, there’s just so much to learn, so we have a part of the program that focuses on helping people. Launch those programs and know how to do it right because it can be a huge value add. In terms of once you move your contract values upwards, it makes a lot of things easier when you’re with your business.
Rob Walling:
Web Developer Ninja asks, “Do you fund teams that use offshore engineering talent?”
Alex McQuade:
Yep.
Rob Walling:
Alex?
Tracy Osborn:
Nod.
Alex McQuade:
Yeah. And also, a good clarification here, too, is a side question we sometimes get, you do not need to be a technical founder or have a technical founder. We’re fine with non-technical founders as well.
Tracy Osborn:
We do ask like one of the questions on the application is who’s the coder? We’re just curious about how it works in your team. A totally acceptable answer is offshore development team.
Alex McQuade:
Yep.
Rob Walling:
Now, I will say personally, see, again, we all have our own criteria, there’s four of us. I prefer if you have a technical founder, you have a slight edge in my rankings. But we have funded many folks without.
Tracy Osborn:
And it has to do with the speed at the which the business can execute. When you have a technical founder, it’s a lot faster to get things done than if you have to go through an offshore team. But we do have companies in TinySeed who go that path.
Rob Walling:
LJ asks, they ask, “How do UK residences register their SaaS company?” That one I would say go to Chat GPT or Google and type that in because I don’t know. I have never done it. Most people, companies who apply already have an entity, but there’s a chunk that don’t and they incorporate. We make an offer. They incorporate in their local region or in whatever, locally.
Tracy Osborn:
You don’t have to be incorporated before applying. You do have to be incorporated in order to accept the investment.
Rob Walling:
It’s nice.
Alex McQuade:
And if you haven’t have it, if you don’t have it set up and you don’t have contacts, we have gone through and researched like lawyers and things. We will have some things to help you out in terms of to make sure that deal gets done. It’s not like a part of the program as the incorporation aspect.
Rob Walling:
And LJ asks, “Can you help with an AI business?” If you’re B2B SaaS and you have some component of AI, I mean, yeah. B2B SaaS is B2B SaaS. It’s still solving a problem. Finding more customers who meet that problem and all the other stuff, all the blocking and tackling around that. So, AI or not, it doesn’t matter.
Tracy Osborn:
Yeah. Our spring ’22 batch had a lot of AI. And this is actually before the big AI really exploded, what, six months ago. So, we actually did this whole round of investing in a bunch of AI businesses before it went really big, which I think was good on us. We were already going in that direction. But yes, they are all at the core though B2B SaaS.
Alex McQuade:
We were into AI before AI was cool.
Tracy Osborn:
Yeah, exactly.
Rob Walling:
Kenneth from LinkedIn asks, “We’re incorporated in the US, but activities in Africa, in Nigeria.” So, I’m assuming that’s where their customers are. “Which will be the best program to apply to?” Alex, you go.
Alex McQuade:
Kenneth, I think it’s based on where you’re located.
Rob Walling:
Time.
Alex McQuade:
I was talking a little earlier about that, if you’re in the US, I would recommend applying for the Americas program. If you’re anywhere in the Europe, Middle East or Africa region, so in Nigeria, if you’re located in Nigeria, then please apply for EMEA.
Tracy Osborn:
Yeah, wherever you want to spend your time, time zone wise, I guess, with our education and our calls.
Rob Walling:
Code Shark asks, “Hey, guys. I hope you’re having a good morning. Do you fund applications in the marijuana space?” And I’m going to say we have not, but I believe we can. I don’t know. I would honestly have to talk to our legal and look at our own documents. We’re not opposed to doing it. It would only be if there was something in our charter that says we can’t fund.
Tracy Osborn:
We have heavily considered one in the past.
Rob Walling:
That’s right.
Tracy Osborn:
And I apologize to that company, if they’re watching this, that they know who they are, that we’ve got very close and then it didn’t work out. But it wasn’t due the fact that…
Rob Walling:
That’s true.
Tracy Osborn:
… it was a business in the cannabis industry. It was due to other factors.
Rob Walling:
Right, so I guess, that’s a yes then. All right. Ron Ma asks, “We collect revenue on behalf of our clients. They are other SaaS providers and we offer additional services like consultation and onboarding. We are evolving a traditional system. Could we be considered?” Not sure I fully understand that, but if it’s mostly-
Tracy Osborn:
Maybe they’re consulting now and then they’re starting to build their SaaS side.
Rob Walling:
A product?
Tracy Osborn:
Mm-hmm.
Rob Walling:
Okay. It depends, honestly. We are going to judge the SaaS part you have. So, if don’t have anything that’s software revenue that people are paying for a tool, then we’re not going to fund a consulting agency or a consulting firm or whatever. But if consulting is 70% of your business and SaaS is 30% and that 30% SaaS is up to $1000, $2000, $3000, that’s what we evaluate that piece of it. And it’s a nice bonus that you have, a consulting revenue because that is runway. So, that’s where it depends how far along the SaaS piece is. If in doubt, fill it out.
Craig, on YouTube, “I’m building a Euro travel tool to help people plan trips and I also want to have a tour guide marketplace. Does TinySeed work with travel-related startups?” So, there’s two questions here because yes, we will absolutely work with travel-related startups as long as you’re a B2B and you’re a B2B SaaS. If you’re two-sided marketplace and you charge a subscription to businesses, we would consider it. If most of your revenue or your focus is on B2C and it’s on consumers planning their trip, the odds are lower, much lower than we would consider.
Tracy Osborn:
And again, it’s because of the program. You’re not going to get as much high of the program because we don’t have any focus on the consumer side of things. So, it’s not like we don’t think your business can’t be wildly successful. It absolutely can. Absolutely, it can be wildly successful. Huge chance of that kind of business. It just doesn’t make sense for the program.
Rob Walling:
We have such a focus on that. But I would say, Craig, if you’re in doubt at apply and put this in a-
Tracy Osborn:
Lots of people are planning on building a B2B side of things, anyways.
Rob Walling:
We have funded a couple of B2C focus where they had started the B2B side and gotten enough traction that it was like, “Oh, that business is interesting to us.” And then the B2C revenue is a nice bonus because it’s runway. It’s much like having consulting and pivoting in. Thanks for that question, Craig.
Fahad on YouTube, “Is there a downside to incorporating in the US as an international founder and targeting a global market such as, for example, taxes?” I don’t know. You would honestly need to… it depends on what country you’re in and how they treat it. And I would say talk to a lawyer. I don’t know that I can give advice on this.
Tracy Osborn:
There are upsides. Upsides, in terms of incorporating the US as a C Corp. I’m not an expert on this. What is it? QSBS is a huge upside for, and I forget why. I just know that’s the word that people bring up when they say C Corps. I don’t why that’s a… yeah.
Rob Walling:
C Corps, you don’t pay taxes if you hold it for five years. There’s some stuff around there. If you want to-
Tracy Osborn:
Yeah, and then there’s also selling.
Rob Walling:
Yes. So, if you want to exit later, so many more buyers will consider a US entity. And raising any type of follow on funding, it’s much more difficult if you’re not a US entity, but those are the trade-offs you’d have to make.
All right. Kareem asks, “I wanted to ask, what do you think about cybersecurity in the SaaS business? Do you fund such platforms?” Yes. We funded several security-related. Again, if you’re full on consulting, a lot of security companies that apply are consulting companies that want to get into software. And if you have zero software revenue, then we’re not going to fund a consulting firm. But we have funded several that are a mix or that are fully blown security, cybersecurity SaaS.
Deliver Tech asks, “Do you fund startups that finance vehicle assets for logistics and transportation?” If you are B2B SaaS, we will. We have funded.
Tracy Osborn:
We have so many niches.
Rob Walling:
Yes. Go to tinyseed.com/portfolio and 105 companies, 170 companies. We have funded in so many niches. Yes, yes, and yes. If you’re a B2B SaaS, yes. It doesn’t matter.
Tracy Osborn:
Yeah. I was talking with April. With our call with April Dunford yesterday, and she specifically called out how she loved all the different CRMs that we have, like a CRM for this and a CRM for that, and a CRM for this. And it’s because there’s so much opportunity in each of these individual spaces. But we have such a range already in TinySeed and yes to B2B SaaS, you’re good.
Rob Walling:
That might be another way that we’re different than a traditional venture firm is a lot of venture firms focus on something, right?
Tracy Osborn:
Mm-hmm.
Alex McQuade:
Mm-hmm. That’s true.
Rob Walling:
They focus on network effects and they only fund network businesses or they focus on biotech or something. Our focus is B2B SaaS, which is very broad. And so, that does give us the opportunity to invest in these SaaS companies. Deliver Tech had another question, but it was basically, it was similar. “Do you fund startups that do X, Y, Z?” Brett asks, “If we are applying to TinySeed for a second time, is there a way to get a copy of our prior application?”
Tracy Osborn:
It’s a great question, actually. Yeah, send me an email or at hello@tinyseed.com or tracy@tinyseed.com. Send me an email and I can get that to you.
Rob Walling:
All right. I think at the sound of the bell, that was our last question.
Alex McQuade:
Twelve minutes.
Tracy Osborn:
I love how it was a wrap up right at the moment. Yeah. It’s cool.
Alex McQuade:
I didn’t think we were going to pull it off, but we did.
Rob Walling:
I know. It’s worth it. It was great.
Tracy Osborn:
Talk faster, guys.
Rob Walling:
We’ve been down this road before and we always make it. So, thanks everyone so much for joining us.
Tracy Osborn:
Yeah. Well, hopefully, you got a feel for us. One of the reasons why I like doing these things is that, I don’t know. I feel like the TinySeed brand is that we’re a serious professional people with a large, healthy, heaping amount of goofiness. We’re dorky weird people. And I think this is a great way to get to know us as a team. Not to mention get to know the program. I think the TinySeed team, itself, we are really wonderful friendly people and I hope you feel for us as well.
Alex McQuade:
Send us an email if you have any questions. We’d love getting emails.
Rob Walling:
Hello@tinyseed.com. It’s amazing.
Tracy Osborn:
And say hi to Alex because he takes care of the address.
Alex McQuade:
I’ll probably answer it. I love it.
Rob Walling:
Yes, indeed. So, thanks for joining us today. Looks like we had a great turnout. Lot of great questions. It was amazing. Obviously, feel free to ask follow-ups. Hopefully, you apply this time or maybe next time. But we look forward to checking out your application and getting to know you a bit more. From me, Alex, and Tracy, thanks y’all. See you next time.
Alex McQuade:
Ciao.
Tracy Osborn:
Bye.