Ep 378 How to Keep More Equity by Getting Customers to Fund Your Growth with Premonition Founder, Brad Lorge - ARR vs. ACV, finding strategic acquirers, negotiation tips, fast-tracking an acquisition, considerations when rolling equity.

<p class="MsoNormal"><span style="font-size: 10pt;"><span style= "line-height: 107%; color: windowtext;">In 2015, Brad Lorge founded Premonition, a technology company that offers logistics s</span><span style= "line-height: 107%; color: windowtext;">oftware</span> <span style= "line-height: 107%; color: windowtext;">to streamline</span> <span style="line-height: 107%; color: windowtext;">a company’s</span> <span style= "line-height: 107%; color: windowtext;">delivery operations.</span> <span style="line-height: 107%; color: windowtext;">Rather than the traditional approach of financing their start-up through rounds of dilutive funding, Lorge asked his customers to pre-pay, allowing the founding team to retain 80% of the equity in their business. </span></span></p> <p><span style="font-size: 10pt;"><span style= "line-height: 107%; font-family: 'Open Sans', sans-serif;">By</span> <span style= "line-height: 107%; font-family: 'Open Sans', sans-serif;">March 2022, Premonition</span> <span style= "line-height: 107%; font-family: 'Open Sans', sans-serif;">had grown to $3 million in Annual Contract Value (ACV) which is when it was acquired by</span> <span style= "line-height: 107%; font-family: 'Open Sans', sans-serif;">Shippit</span> <span style= "line-height: 107%; font-family: 'Open Sans', sans-serif;">for</span> <span style= "line-height: 107%; font-family: 'Open Sans', sans-serif;">$20.5 million</span> <span style= "line-height: 107%; font-family: 'Open Sans', sans-serif;">-- an implied valuation of just under 7 times ACV</span><span style= "line-height: 107%; font-family: 'Open Sans', sans-serif;">.</span></span></p>