Data in this post is being shared with permission from VoxPopMe Board Chairman (Lonnie) and CEO, co-founder (Andy).
You’re about to learn:
- How Founderpath worked with a SaaS Board filled with VC’s to increase management equity stake by 10%
- Inside negotiations of Founderpath approving a $750,000 financing into a $8m ARR company
- Cap table management tactics
Lets dive in to a deal we just closed this year:
VoxPopMe is a tool that originally helped CPG brands do user testing.
Today, it also helps software CEO’s do UI/UX testing.
Andy (CEO VoxPopMe) founded his company with two friends in 2013. At the start, he owned 2% equity.
Your Co-Founders Left, VC Rounds Diluted You
Fast forward to 2024 and the two friends have left, the company raised $13m from VC’s, and the 6 person go forward management team was diluted down to under 10% equity.
The business had grown to $10m in annual recurring revenue (ARR).
Founderpath Aligns with Go Forward Management to Increase Equity
VoxPopMe submitted a $750,000 capital request to Founderpath.
As part of our review process, we like to see that the go forward management is properly incentivized to stick around, hustle hard, and grow the business.
With VoxPopMe, we believed management needed to be awarded more equity.
To get this done, we worked with Board Members to establish a new ESOP pool which carved out new equity for Andy and his management team.
Founderpath issued a term sheet so the board understood, if they approved this ESOP plan, Founderpath would be able to fund.
Growing to $20m+ in Revenues
I launched Founderpath in 2019 after interviewing 3,000+ SaaS CEO’s on my podcast, including competitors to VoxPopMe:
Usertesting: https://www.youtube.com/watch?v=w2SyLfrZlT4
Userzoom: https://www.youtube.com/watch?v=65TFzeKTKQ4&t=1s
I got familiar with both products. After taking the tour of VoxPopMe, it was clear that they had feature parity with these $100m+ ARR competitors. Others in the market just had stronger go to market motion which is fixable.
Today, we’re excited backers of Andy and his vision, and are thrilled to be partnered with the board to help the company grow without giving up more equity.
Click here to setup your Founderpath account and get indicative terms in under 24 hours.
Full interview:
Vox Pop Me: From Humble Beginnings to Revolutionizing Consumer Insights
In 2012, a passion for understanding consumer behavior through video laid the foundation for what would become Vox Pop Me. Founded by Andy, Dave, and Tom Williams, the company started with a simple yet powerful vision: to help large companies, including Fortune 500 firms, capture and comprehend consumer feedback in a dynamic and impactful way.
The Genesis: A Collaborative Spark
The initial spark for Vox Pop Me can be traced back to its incubation period within another startup-focused company. This unique environment encouraged innovation and the exchange of bold ideas.
The first lines of code were written in November 2012, signaling the formal beginning of their journey. Located in the heart of the UK, this nascent team operated with agility and precision, despite limited financial resources.
Through relentless effort and a commitment to excellence, the founding trio was able to carve out a niche in the crowded space of consumer insight providers. The vital ingredient? Video.
By focusing on video surveys, interviews, and focus groups, Vox Pop Me differentiated itself from traditional text-based survey companies.
Early Momentum and Strategic Growth
By leveraging their unique approach, Vox Pop Me managed to secure essential funding early on. Initially raising around $15-$16 million, they aimed to supercharge their growth trajectory.
Much of this funding came from a successful collaboration with Founder Path, which contributed $750,000 at a 24-month term. This critical boost helped structure equity in a way that incentivized the management team, and particularly enhanced CEO Andy’s equity stake.
In the first few years, the founders worked tirelessly to build a robust product that seamlessly supported video-based consumer insights.
Key strategic decisions, such as integrating with data analytics platforms and enhancing user experience, played pivotal roles in establishing Vox Pop Me’s reputation as a reliable and innovative solution provider.
Rapid Growth and Market Validation
The years following its inception saw Vox Pop Me achieving remarkable milestones, all while maintaining a lean and capital-efficient operation. By the time Lonnie joined the Board as Chairman in 2019, the company had already raised around $15-20 million.
Their Series A, led by Origin Ventures and supported by Mercia, brought in an additional $9 million, solidifying their financial footing.
One of the significant turning points for Vox Pop Me came from their partnership with In Moment. Lonnie, then President of In Moment, identified the potential synergy between In Moment’s customer experience platform and Vox Pop Me’s video solutions.
This collaboration not only validated Vox Pop Me’s market positioning but also opened new avenues for growth.
Leadership Transitions and Team Dynamics
A noteworthy aspect of Vox Pop Me’s journey is how the company navigated leadership transitions and founder dynamics. Initially, Andy had a modest equity share (around 2-3%), reflecting his role at the time. However, recognizing his unwavering commitment and vision, the board gradually restructured the equity to reflect Andy’s contributions better.
Despite the inherent challenges of managing co-founder relationships, the team remained resilient. Tensions arose as differing perspectives on the company’s direction emerged.
During the COVID-19 period, Tom left, feeling he had completed his contribution. Andy and Lonnie recognized the need to adapt to new market realities and continued to steer the company forward.
Launching New Products and Expanding Reach
In a strategic move to broaden their market appeal, Vox Pop Me launched a new UX tool targeting software founders. This tool offers cost-effective UX testing, positioning itself as a compelling alternative to established players like UserTesting and UserZoom.
By continually iterating on their product and responding to market needs, Vox Pop Me has successfully captured the interest of both existing and potential customers.
Solidifying Market Position and Future Prospects
As of now, Vox Pop Me boasts approximately $10 million in total revenue, a testament to their effective growth strategies and market relevance. Much of this revenue comes from Annual Recurring Revenue (ARR), highlighting the value of their subscription-based model.
The company’s efficient use of capital has been instrumental in its success. Founder Path’s funding not only provided financial support but also reinforced the management’s confidence. Founder Path’s Nathan Latka commended the team for their feature-rich product, emphasizing sales and marketing as the next major growth levers.
Cultivating Company Culture and Beyond
Lonnie has been a vocal advocate for nurturing a positive company culture. His transition from a long tenure at In Moments to becoming Chairman of Vox Pop Me’s Board before COVID-19 brought a profound understanding of the importance of governance and strategic oversight.
The board, which initially included around six members when he joined, has been instrumental in guiding the company through various growth stages.
One of the company’s admirable practices is the adaptation of employee incentives based on individual needs. By valuing cash over equity when necessary, Vox Pop Me demonstrates a deep understanding of its employees’ diverse motivations and circumstances.
Vision for the Future
Looking ahead, Vox Pop Me has set its sights on continued expansion and innovation. With a dynamic leadership team and a product suite that resonates with Fortune 500 companies, the future holds tremendous potential. The team remains committed to reinvesting in the company and exploring new global markets, ensuring that they stay ahead of industry trends.
As Andy and his team prepare for the next phase of growth, they do so with a sense of purpose and clarity. Under Andy’s more prominent leadership role, and supported by a forward-thinking board, Vox Pop Me is well-positioned to scale new heights and redefine the landscape of consumer insights through video.
In conclusion, Vox Pop Me’s story is one of resilience, strategic growth, and unwavering dedication to innovation. From its humble beginnings to its current status as a formidable player in the consumer insights space, the company exemplifies what’s possible when visionaries come together to create meaningful change.
As they continue to evolve and adapt, the market can undoubtedly expect big things from Vox Pop Me in the near future.
Looking for users to text your onboarding flow and other UI, UX items?
