How Document Crunch Reached Hundreds of Construction Customers and a $9M Series A

Guys, bet on yourself. Documentcrunch.com. He started tinkering around with this caught five, six years ago in 2018. He was at a cushy corporate job, but his line out of his door in terms of general contractors and changes to contracts and hard hat folks going, I need to I need to edit here was through the roof. He said, gotta do something about this. In 2021, he went full time building Document Crunch with his two other cofounder. They

split equity about evenly. Today, they're serving, quote, hundreds of customers. Their minimum price point is $4,000 per year, and there's a clear path they charge, you know, couple $100 per project. So you can do the math. Right? If they're doing thousand... One contractor doing thousands of projects, you quickly get to the 200, 300, $400,000 sort of contract ranges. They're growing their team 55 today. Heavy outbound motion with... Especially with AEs and inbound six quota carrying reps

just recently closed a $9,000,000 series a as they look to continue to scale and hopefully grow 200% year over year. Hey, folks. My guest today is Josh Levy. He's the CEO of Document Crunch, and he cofounded the Contract Intelligence Platform to leverage his extensive con... Construction law expertise. With a background in leading a billion dollar departments, his mission is to empower the construction industry by raising contract standards through innovation and risk mitigation. Josh, you ready to take us to the top?

I am. Good to be here, Nathan.

Yeah. Yeah. Tell me the tell me the pain that you experienced sometime in your history where you said I've gotta fix this. Was it like a $100,000,000 deal that blew up because the contract wasn't signed the right way or the IP's time stamp wasn't attached or what was it?

Yeah. I mean, really, I certainly was very aware of the the issue in the construction industry that there just aren't a lot of lawyers out there and construction is super risky. So, you know, understanding and setting contracts up the right way and negotiating that that was important. But that... Because so because so many companies just don't have those types of resources and it's risky. But the moment, Nathan, really was, you know, I was in house at

a large contractor where they did make the investment to have me there full time, as their in house lawyer and I've been doing all this legal work that you would expect or, you know, negotiating contracts. But every single day, I would have a line outside my office, you know, folks out there hard hat in one hand, a piece of paper on the other hand. It wasn't about setting up the contract or negotiating the contract. They knew

I had that. What it was about is construction is so dynamic and there's so much risk that happens every single day in the field, but things happen that change the time or money for performance. And these folks wearing hard hats need to comply with the contract in order to keep money in their pockets. And if they don't comply with the contract, then they lose money. And so I was looking around saying, oh my gosh. There's this massive industry and there's like this many of me, like a tiny, tiny, tiny fraction.

What year was this, Josh?

This was about six years ago now.

Okay. 'eighteen timeframe. And then Yeah. Because when did you take the leap then and jump out of that cushy gig and say I wanna solve this?

Yeah. Well, right around then, I started reading a lot about how legal tech was being used to speed up lawyers work. And so, again, I was like, that's interesting. That'd be cool for me, Josh. But I was like, Where is the technology that's helping all the non lawyers out there? And more importantly, construction has so many of them that I know exactly what they would need day to day. And so six years ago, had this real

moment where it was like, AI is awesome but nothing is helping all the non lawyers. And so we started building this in Stealth about really like I mean get like late twenty eighteen now. So yeah, going up on six years, I'd say like five and a half like would be closer probably to when we actually started doing it. We were thinking about it six years ago, started doing it about five and a half years ago. Did

it for a few years kind of in stealth quietly. You know, had some friends in the industry start trying it out and like it. And then three and a half years ago, I took the plunge and went full time and it has been the experience of a lifetime ever since. I just never could have imagined that the world would have opened up to this idea this way and that I would have been so fortunate to have just brought in such an amazing team that's actually taken this, like, vision. Yeah.

And just just to jump in just to show a lot of unpack and and quick and quick show, let me just dive in here. So you went full time 2021. You keep saying we. Was it just one co founder or how many co founders?

No, I had two co founders. Actually a lawyer who I spent a lot of my career practicing with in the construction industry was one of my co founders. And then also just a third party kind of entrepreneur that was in my co founder's network that helped kind of set up the business and initial product dev and things like that.

And Josh, do you guys just split it equally at the start? 33 each or no? You worked it out differently?

Yeah. I mean, high level, that's kind of, you know, what it what it looked like. We, you know, just kind of... Yeah. We all we all were contributing, kinda just split up the pie.

Yep. Yep. Okay. I wanna foreshadow a little bit and then get the full story of 2021 to 2024 when you when you started full time to where we are today. But let's again foreshadow a little bit today, what's the average customer paying you to use your technology per year?

You know, it's not something that we disclose publicly but I can tell you that that price has like more than tripled in the last two years because of the the increased jobs that we're automating every single day for the industry.

Can you give me some sort of range though? I mean, the reason I asked the question is because understanding a PLG motion bottoms up low ARPU but high volume is very different than an enterprise led motion, a million dollar So where are you?

Yeah. That's a great... That's a better way to think about it, Nathan. Well, there's plenty of SMBs that come inbound to Document Crunch. We're really building our product for the middle market of the industry and up into that enterprise. So we have so many very large contractors using us as well because the full expression of our product is not just that simple, Hey, need to understand what's in my contract before I negotiate the job. But it's

actually enabling project teams across the whole portfolio to reduce their risk. So you think about our product, we're really starting to be priced on a per project basis for these large enterprise projects. I mean, just to put things in perspective, we've got numerous customers that are using us on hundreds of projects and now we've got folks asking to use us on thousands of projects. So, could do the math even in a small per project price. Well, yeah.

Let's say I was signing up today and I said, hey, I'm a GC. Gonna do it. I need... Josh, I need a contract for a thousand projects per year. What am I gonna pay on average probably?

Like, you know, several $100 a project based based on the current suite of services that we have.

Okay. So if I'm a thousand projects at $300 a project, that's a contract value of something like $300 a year or something like that?

Yeah. Like, again, you're starting to get into like the general ballpark of how we see the world.

I see. I see. Obviously, you have to grow into that level. Right? Selling those larger contracts, driving the volume up based off per project stuff. Do you have quota carrying sales reps to go target those big contracts or no?

Of course. I mean, we've got, again, like, many of the largest construction companies in The USA already already like onboarding onboarding onto our product. I mean, this is... This has become the standard in our industry, Nathan, which is really cool because it's such an important problem and you start to think about the relative value on a per project basis. I mean, it's a great... It's just... It's it's frankly one of the best ROIs for like this use... Commercial uses of AI that I could think of like how we're disrupting the construction industry.

Mhmm. Mhmm. I wanna go back and understand how you grew to this point. Can you give us some context though today? I mean, are you working with 10 enterprise accounts or 10,000 SMBs?

No. You know, we're in the hundreds of customers now and it's a pretty good mix right now. SMBs come inbound every single day from kind of for that original use case I talked about. But, yeah, we're working with very, you know, large amount of of of large contractors as well.

What is that bottoms up? I know you have obviously an outbound approach for the big ones, the big GCs. But if I was an SMB just come and no touch to the website, what's the lowest price point I could get started at? Is it a $100 for one project?

No. You know, it's still in the in the, you know, thousands of dollars, you know. Yeah. It... Per year. Yeah. Like it's an annual contract generally. I mean, again, we're automating some pretty important jobs to be done and it's still, you know, could be a lot of, you know, in that case, you have like a back office use case. You may not be buying us on a per project basis at that point in time, but, you know, imagine that we're, you know, still charging a good amount of money even for that back office use case.

Yep. 2021 today adding hundreds of customers, not easy. Right? A lot of companies try to do that. They never do it. Talk talk me through your first 10, 20 customers. What was your go to market motion in 2021, 2022?

I mean, you're looking at the best sales guy from 2021 and 2022 right here. Right? It started with me, founder led. I of course had a very good understanding of the product space and and the problem that we were solving for. And our original users were really legal departments of some of these large contractors. But that was because of who I was and who I was able to call. That was never the vision. Right? The vision

always was it was the non lawyers that needed this the most in both big and small companies. And then, you know, as we started iterating, the nice thing is that, you know, the legal departments can tend to be or the legal users can tend to be the most discerning users. And so, getting the product to a point over time where we saw that we were providing regular value just very organically within this very relational industry, started

getting referrals, Our brand started becoming well known, conferences, that whole circuit. And now, we're the standard in our industry. And so, it was hard fought and hard won, Nathan, in terms of it takes time and it takes quite a bit of effort, but we've remained very empathetic to the industry and we've built a product that the industry loves.

Hey, folks. If we haven't met yet, my name is Nathan Latka. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and one... Went on to create founderpath.com. I raised a large fund to do non dilutive deals with b to b software

founders. So far, we've invested in over 400 software founders totaling a 150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to get your offer. Alright. Let's jump into the interview. I like, obviously, the excitement and, hey. We are the de facto standard, but I always wanna push people to quantify that. Right? Because it's not

fair to competitors potentially in the space. So when you say you are quote the de facto standard, are you measuring that by number of projects you process per year, number of GCs that use you? How... Why do you say make that statement?

Certainly, we're the market leader and we don't have any true competition, Nathan. I mean, no no one is no one is thinking about contract compliance across the project life cycle like we are. Of course, there's features. Copilot, you could say could be a competitive feature to some of what we do. But legal tech companies could process construction contracts for the back office. But when you think about automation of jobs to be done across the project lifecycle,

We're the only folks that are doing this across the board. So that's one. And yes, we're the market leader because of that. But more importantly, Nathan, it's just become very much like we're synonymous with best practices for our industry. You know, like there was a point in time where construction used to be considered an unsafe industry. Right? I'm gonna use a very rhetorical example. And at some point, a hard hat was handed out and said that

this is economically viable and there's some real risk management benefit to wearing it. And now you don't step on a construction project without a hard hat. You're seeing that type of an attitude toward a very clear cost effective gap that we're now able to fill that it's just candidly negligent to not be using our product if you're in the construction industry.

Why would someone pick you over ContractSafe or LegalOnTech or HyperScience, some of these other folks that play the DocMe, etcetera?

I mean, I guess if you only had a back office use case, maybe there'd be... We go deeper into construction than anybody. But if you only had a back office use case, I would say that legal tech would be something that could compete with us. But none of... I don't even know some of those companies you name, but what I'm certain of is none of them are being distributed and automating jobs to be done for people in the project trailer wearing hard hats right now. Mhmm. That's the

biggest saying is you're... You've so clearly defined your niche. There's no one else delivering as much value to this very clear specific niche that you're carving out, and that's why you feel confident saying, like, you are the market leader. There's a bunch of qualifications. Market leader for hard hat wearing folks, you know, these kinds of GCs doing these kinds of projects, this kind of back office plus legal tech.

Yeah. And knitting the back office to the field, which are people in job trailers right now. That's exactly right.

Mhmm. Okay. I'm with you. I'm with you. Talk to me about how you fund the business. How have you capitalized the business? Bootstrapped or raised?

Originally bootstrapped, but now we've gone through, you know, we closed our series a round of financing. So we've done a couple of of price rounds venture backed over the last... Since I've become this... Since I have been the CEO, we've raised about I think $19,000,000 in total. The

most recent one I think was earlier this year, 9,000,000 from Navitas Capital. Is that right?

That's right.

This is obviously very... Not to know know... Nothing to do with you. Just in general, the market, it's very tough to raise today. What did you see when you put the pedal to metal, run the process in February?

Yeah. I mean, look, I've raised in the best of times in my seed round and then the worst of times, my a. What I saw is it is tough. Right? Macroeconomic conditions certainly change venture appetite. Things like interest rates or, you know, just general notions of what's playing out in the economy. But here's the one thing and I'm gonna just gonna come back to it, Nathan. Like, at bottom, we are solving an extremely real and easy

to understand problem for a massive industry and that has been a huge anchor for me through the best and the worst of times because this is a very clear and easy application of a great product to a really big problem space. So, that's when I look in the mirror sometimes in the worst of times, I remind myself, I have a product on the streets right now that our industry loves. There's something very powerful in that, Nathan,

and that I think has given a lot of enthusiasm to the investors that have made their bets on us. But certainly the climate in December when we closed the round was much different than two years ago when we closed our a.

Mhmm. Mhmm.

Or I'm sorry, our seed, should say. Two years before that.

Yeah. So I guess the series a that you did, it sounds like you closed it December, not earlier this year, but, know, call call it eight, nine, ten months ago. Most folks are like I've heard right now series a's are selling on order of 10 to 15% of the company. Were you sort of in that same range?

Yeah. Again, we're not gonna disclose the the dilution of the round that we consider that to be a confidential matter. But yeah, all of our all of our rounds, would say have been well within market norms at the various stages that we've raised. So

on that note, I mean, dilution is important. Right? So if you sold 10 to 15%, obviously, then your exit opportunities decrease because you have liquidation preferences, etcetera, which means you must have really wanted this capital. There's a very real reason for it. Why did you need this money to grow the business?

There's just no doubt. I mean, we are the essence of what a venture backed opportunity looks like. We have a massive market. We can't go fast enough. We can't sell fast enough. We can't build products fast enough. In fact, even with the a, we're still experiencing that. It's unbelievable to see the pull that we've gotten from the market. That is why venture capital exists. And so we need the growth capital. We needed the growth capital and we still need the growth capital. You know, we're gonna three x for our fourth time in a row.

Sorry. But Josh, that didn't answer my question. Where are you investing the money? Is it on outbound sales reps, engineers, something else?

Yeah. You just like... I... We're investing the money in two areas primarily deepening our product to automate more work because there's more value for each job to be done that we automate. But then also, yes, truly building out now a scalable sales team which we've increased tremendously this year.

What's the total team size today?

We're at 55 employees today.

Okay. Wow. And how many of them are quota carrying reps?

We have... I'm just gonna talk. I mean, we have business developers and marketing folks, but I'm talking, you know, AEs. We have six account executives on the team and we're about to hire seven.

10% of the company. Okay. That's actually... That's a lot. Yeah. That's a lot. There's enough leads to feed all of them. They're all hitting quota. They're all... You're all feeling good?

We have just... I mean, we... Well, keep in mind we've scaled up the sales team quite a bit. We had three at the beginning of the year. So a lot of these these are recent hires but they're all coming in and closing business right away. Our pipeline has really blossomed. In fact, the big development this year has been outbound has now become... Mean, our marketing pipe has always been a huge strength of ours, but yeah, I mean outbound is now crushing it. We're about to double our BDR team because of how impactful outbound has become as well.

Can you I mean, can you quantify that? I mean, how many new leads are you getting per month?

I don't have that information off hand, but we're you're seeing increased lead velocity. You're seeing ACVs that have, as I said tripled in the last year and that's a recipe and you're seeing closed one rates go up. And so what you're... That's a recipe for you. We've got a scalable sales motion now and we... You know, I wouldn't be surprised if the next time we talk, the sales team was double what I just told you it is today.

Well, yeah. But we don't celebrate team growth. That's just expense structure. Right? We like to look at, obviously, revenue growth and increased revenue per employee. I mean, going back to the top of funnel question, though, I can't figure out where you guys are getting leads from. Because when I look at Ahrefs, your backlink profile is a 40, which is really low. And the organic traffic I'm seeing, it's like 400 clicks per month. So there's not a lot of inbound happening there. Is there some other channel you're using to sign folks up?

I don't know what what metrics you're referring to Nathan, but we've got a tremendous amount of inbound that has exceeded our plan.

Where they come from though? Are they searching a specific term on Google and that's where it's coming from?

What is not it's not it's not SEO. It's based on leads to our website. I mean, SEO is a part of it. But far and away our biggest lead source is just leads coming through our website and field marketing for industry events and stuff like that. Okay. It's again, Nathan, what it is is us being known as the standard and people coming straight to our website and signing up.

Yeah. Josh, I get... I I know I get... You keep saying it. We're the standard. For my audience, understanding how you became the standard is more important than you just saying we're the standard over and over. And we'll have competitors listening going, he's not this. We do this better. We do... I'm so trying to really dig into the meat and bones. Right? So when you go, I guess what was the last conference you went to field marketing that worked really well for you? And what was the response you got at the beginning?

We're at field marketing and mid conferences. I mean, I'm not at... We go to so many now that I couldn't even tell you the last one we went to but we're at all the major industries and now we're rolling out much more local related industry events and conferences as well. But from the day we started this, the booth response has been tremendous for us. That was the original engine of what drove our inbound and now that's

leading to, again, I know you don't wanna hear that I think we're the standard but I think the general awareness of the industry is leading to the website, our website being the biggest magnet to inbound that we have more so than even the conferences at this point.

Got it. Let's move forward with the new ground that you raised. You obviously have a board, you're setting growth projections. What would make you happy this year in terms of a growth rate? Are you targeting 200%, 100%, 300% year over year growth?

Yeah. We're looking to be at again 200% ish for the for the fourth straight year.

Mhmm. Mhmm. Okay. Got it. So 200% in... You... We're reporting this in September. There's a couple months left in the year. You on track to 200% ARR growth this year?

We're right on track.

Yep. Awesome. That's exciting, man. Alright. Hey, let's wrap up here with the famous five. Number one, what's your favorite business book?

The Messy Middle by Scott Belsky.

Number two, is there a CEO you're following or studying?

Yes. There's a few CEOs that I'm following and studying. Let me think of the best one that I could give you off the top of my head.

I am more of... I'm a first time founder and I haven't operated before. So I'll just say that, like, the operational chops of of Jeff Bezos to me, is something that I admire quite a bit. And fun fact, we went to the same high school. So...

Very cool. Number, and only only if you gave a, you know, a couple equity points to everyone at the high school to Amazon, you'd all be sitting in a hurry right now. Right?

Right.

Number three, what's the what's the online tool that you use the most to run the business? Online tool?

Yeah. Oh gosh. I mean, there's a lot of online tools. You're talking about me personally?

The that you use the most to run the business?

I would say Salesforce.

Yep. Number four, how many hours of sleep do get every night?

As of this year, over seven because it was my New Year's resolution and I'm adhering to it.

That's great. And what's your situation? Married, single, kids?

I'm married with a wife and two girls, and, they're very important to me, and me sleeping is not just good for Document Crunch, but good for them as well.

I agree. I agree. How old are you today?

I turned 42, nine days ago.

Oh, congratulations. Happy late birthday.

Thank you.

Take us home here. Something you wish you knew back when you were 20.

Bet on yourself. Guys, bet on yourself.

Documentcrunch.com. He started tinkering around with this caught five, six years ago in 2018. He was at a cushy corporate job, but his line out of his door in terms of general contractors and changes to contracts and hard hat folks going, I need to I need to edit here was through the roof. He said, gotta do something about this. In 2021, he went full time building Document Crunch with his two other cofounder. They split equity about evenly.

Today, they're serving, quote, hundreds of customers. Their minimum price point is $4,000 per year, and there's a clear path they charge, you know, a couple $100 per project. So you can do the math. Right? If they're doing thousand... One contractor doing thousands of projects, you quickly get to the 200, 300, $400,000 sort of contract ranges. They're growing their team 55 today. Heavy outbound motion with... Especially with AEs and inbound six quota carrying reps just recently closed a $9,000,000 series a they look to continue to scale and hopefully grow 200% year over year this year. Josh, thanks for taking us to the top.

Thanks, Nathan.