OnBoard Meetings founder Paroon Chadha has engaged in a little bit of everything since his last interview with Nathan Latka just a year ago. The savvy founder focused on creating the best board meeting experience, raised capital, acquired one company, and divested another. All in a year’s work for the formerly bootstrapped founder who initially launched his company in 2003 and passed a million dollars in revenue a year later.
When Chadha recently visited with the GetLatka team, he shared why he divested one company and acquired another within the same quarter, how his ARPU skyrocketed, and his cash vs. stock rule of thumb when negotiating acquisition deals.
- $35m ARR
- 3000 customers
- Team of 275 with 70 in sales and marketing
- On track for 50% YOY revenue growth
OnBoard: Adding 80-100 customers per month to 3000 total
After hearing that the board meeting SaaS expanded past 3000 customers and is adding roughly 100 new customers a month, Latka asked Chadha what makes managing a board meeting so hard. The founder explained that every CEO says there are 3 versions of a board meeting: the one you have in mind based on the agenda and preboard discussions; what actually happens; and 2 days later, what you realize you should have done 2 days before. “It’s hard because it’s structured, time is precious, and you make many important decisions there. It’s tough and difficult to nail,” explained Chadha, adding, “our objective is to help CEOs and boards make all 3 meetings the same.”
Acquisition complements core while 5Xing ARPU
Just after his last Latka interview, the founder acquired an existing company from Toronto called eScribe Meetings. Unlike OnBoard Meetings, which predominantly focus on private and public sectors, eScribe is squarely focused on local government: towns, cities, special dispositions, schools, and government-funded boards and committees. Chadha shared that before the acquisition, their ARPU was $5,000 per year, helping manage 2-3 meetings annually for clients. “eScribe manages higher value customers because their audience has more subscribers and meetings, like city council meetings,” explained the founder. As a result, the ACV for eScribe sits at a $20-25,000 ARPU.
Tech, talent, transactions, Toronto increases meetings from 70 to 100 new customers per month
Chadha described the eScribe acquisition with a multitude of superlatives that reinforced the perfect fit with OnBoard Meetings. “We really liked some of their tech. We like the transactions (with a slightly different but complementary target audience at 5X ARPU). We liked the talent of their team of 200, and we like the expanded geographical footprint we get in Toronto,” espoused the founder.
eScribe lands US customer 2 weeks ago in Laguna Beach
Chadha revealed that from his current location in Laguna Beach, they just closed another US eScribe customer. “We just signed Laguna beach,” the founder excitedly shared. Chadha restated the synergies of the deal: talent access, market expansion, rounding out their portfolio, and covering all meetings, from the public sector to private, publicly listed, and non-profits. At the time of acquisition, eScribe had roughly 400 customers in Canada, doing $5-10m in revenue.
August marked the 1st anniversary of acquisition, divestiture
After receiving a $100m round at a $400m valuation when he last spoke to Latka, Chadha quickly took action in acquiring eScribe and also divesting OnSemble Software. At the time, the employee collaboration company was doing under $10m, representing roughly 20-25% of OnBoard’s revenue. During his journey, Chadha realized that “Extranets like board collaborations are easier. Intranets are harder.” Since Ncontracts was already doing employee collaboration, Chadha sold OnSemble to them in November for 8-figures.
Swapping talented OnSemble for superstar eScribe
In Chadha’s mind, the acquisition and divestiture are connected. “When we swapped for eScribe, it actually put us ahead. It’s like trading a player that’s done well but isn’t a great fit for a superstar that we can get behind and build a championship team around,” explained Chadha.
Breaking down $100m round
When Chadha last spoke to Latka, he had just closed his $100m round at a $400m valuation. Chadha clarified that less than 50% of that $100m was secondary funding. The balance was for transactions and operations. Because he had already done due diligence on eScribe, the founder quickly acted to close the eScribe deal with a portion of the $100m funding.
Accelerate scaling and growth
“We knew eScribe would give us a chance to expand geographically, get great talent, and be a full-spectrum solution to expand quickly,” Chadha restated. Although eScribe closed at the tail end of the hot SaaS market, he has no regrets about multiples, as he also sold OnSemble in the same “crazy valuation market.” Chadha wanted a team that could help ramp up and scale quickly. He added, “Our growth rates are justifying the spend.”
Negotiating the eScribe deal terms: targeting 50/50 cash and stock
Latka asked Chadha to describe the eScribe deal terms concerning cash vs. stock. Without discussing particulars, Chadha shared that the core group at eScribe was fully vested, and some cashed out, while others took some chips off and stayed for the new mission. The founder shared that his rule of thumb is to target 50/50 so that long-term employees and founders can take some chips off the table but still have the opportunity to get vested in the new company.
Fell short of 50% stock swap target
In the end, Chadha admits that the talent didn’t quite hit the 50% stock option he was hoping for, but he holds no grudges. “We are an evergreen company. In the past, we didn’t have many opportunities for people to cash out. This represented an amazing opportunity for early employees and founders. Some took chips; some are re-upping for the next stage. I was open to 50%, but it didn’t quite shake out like that,” Chadha shared.
Closing in on 50% growth, $35m run rate
Like the year before, OnBoard is closing in on a 50% growth rate. Latka recalls that last year the company was at $24m, and Chadha shared that they’re past $30m and looking to hit $35-37m by the end of their year. “We are building our foundation for long-term success. We are keeping scaling in mind and leveraging all opportunities, including having talent available at every step,” explained Chadha.
Bootstrapped OnBoard hit $1m a year after launch, profitable for 15 years, bought out 2 partners
Chadha launched his business in 2003 and hit $1m in revenue a year later. He reiterated that the company was bootstrapped early on, which protected his dilution. The company was profitable for 15 years before taking on debt to manage the changes in the business. Chadha explains, “I had 2 partners early on. That worked well as we took dividends for 7-8 years. One partner wanted to move on, so we had to take on debt. I saved up and bought back his shares between 2010-2014. Then the other partner, a credit union that lent me the money to buy out the partner, also wanted to get bought out. I converted their equity to debt. So, then there was no cap table when I owed it all, and there was some debt.”
Now expanded to 4 geographic markets with 2X the sales and marketing team
With the acquisition, the OnBoard team is now serving the US, Canada, Australia, and the UK. The sales and marketing team has grown from 20-30 to 60-70. “We had a CRO start last year. We doubled our number of AEs and SDRs. Plus, we added a demand gen and partnership management team,” calculated Chadha, who says they now employ about 275 total.
Skip hop jump method for a 20-year journey
Founder Chadha reflected on his 20-year journey, saying that he has had a wonderful journey where early investors made money. By being bootstrapped early on, he could use his skip, hop, jump method to take capital when needed to think bigger, scale, and get higher growth rates. The founder now sees the company in M&A mode. Although “the math is complicated,” Chadha admitted that he still owns a substantial portion of the business. He reflected, “This is my 20th year. The secret is to think that I am going to continue to build for another 20 years. Investors will come and go, but keep building like you’re going to own this forever because you just might.”
Famous 5 with Paroon Chadha
OnBoard Meetings Founder Paroon Chadha shared that his favorite business book today is Eating the Big Fish by Adam Morgan. “It’s all about how smaller companies can challenge the category leaders,” explains Paroon. When asked about any CEO he’s following, Paroon said he spent a few days at the Warren Buffett annual conference recently and loved how Buffett presented the concept of a company’s long-term value. Paroon sleeps 5-7 hours per night. He is 47, married with a 5-year-old child. “My wife and I have been together for 20 years, like the business. I have lots to be thankful for,” concluded Paroon.