The Unicorn Exit

Built To Sell Radio Episode #342

In 2001, Haroon Mokhtarzada and his brothers started Webs.com, which allowed anyone to build a professional website. Eager to grow the company, they decided to raise money from a venture capital firm – a decision Mokhtarzada would later regret.


They ultimately grew Webs.com to over 50 million users and sold it in 2011 to Vistaprint for over 10x revenue, totaling $117.5 million.


Hungry to start another company and learn from their mistakes in raising money for Webs.com, Haroon and his brothers began Truebill in 2015. The business was created to help people save money by managing their subscriptions from one platform.


Truebill snowballed, reaching $100 million in Annual Recurring Revenue (ARR) in just seven years. In 2022, Truebill was acquired by Rocket Companies – again, for over 10x revenue, totaling $1.275 billion.


In this episode, you’ll learn how to:

  • Avoid a fundraising mistake that cost the Mokhtarzada brothers close to $50 million

  • Find the right senior person for your team using one interview tactic.

  • Make strategic decisions that will improve your desirability in the eyes of an acquirer

  • Determine if venture funding is the right decision for you and your company.

  • Utilize mirroring to entice a buyer for your company.

  • Prepare for a long and strenuous diligence period.

  • Distinguish the difference between churn rate vs. churn curve.

  • Maximize the lifetime value of a customer.

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More About haroon Mokhtarzada

Haroon is a Harvard Law grad turned serial entrepreneur and angel investor. He was the founder and CEO of Webs.com, a popular website creation platform that grew to 50 million users before being acquired by Vistaprint for over $100M. After Webs, Haroon co-founded Truebill in 2015.


As CEO, Haroon grew Truebill into a leading personal finance app, topping 2.5 million members and over $100M in annual recurring revenue before being acquired by Rocket Companies in 2021 for $1.3 billion.


Haroon has a passion for technology startups, innovation, global change, and elegant problem-solving. He has personally invested in over 100 technology startups including early-stage investments in Instacart, Carta, Relativity Space, PlutoTV, and more.


Definitions

Preferred Preference: Preferred Preference means that amount equal to the sum of the Preferred Preference Per Share for all shares of Company Preferred Stock (including any rights convertible into, or exercisable or exchangeable for, shares of Company Preferred Stock on an as-converted, exercised, or exchanged basis) issued and outstanding immediately prior to the Effective Time, rounded to the nearest one hundredth (0.01) (with amounts 0.005 and above rounded up). Source


Participating Preferred Stock: Participating preferred stock is a type of preferred stock that gives the holder the right to receive dividends equal to the customarily specified rate that preferred dividends are paid to preferred shareholders, as well as an additional dividend based on some predetermined condition. Participating preferred stock can also have liquidation preferences upon a liquidation event. Source


LTV: CAC Ratio: The Customer Lifetime Value to Customer Acquisition Cost (LTV:CAC) ratio measures the relationship between the lifetime value of a customer and the cost of acquiring that customer. The LTV:CAC ratio is calculated by dividing your LTV by CAC. Source


Bogey: Bogey is a buzzword that refers to a benchmark used to evaluate a fund’s performance and risk characteristics. A bogey provides an index benchmark that can serve as a close proxy for comparing the investment scope of a fund. Source


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