Six loans totaling $2.25m from Founderpath, and the prepayment and draw fees to check before you borrow
Steve Benson · Badger Maps
Published September 1, 2022Steve Benson, Founder and CEO of Badger Maps, shares:
- Why they Took $2.25m from Founderpath over 6 loans
- What to watch out for on penalties and fees (prepayment, draw fee)
- getting Real about your life as a Founder
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Steven Benson explains how Badger Maps used debt carefully by accounting for uneven revenue, matching spend to cash receipts, and using smaller financing tranches before venture capital.
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“foreign but uh so over time I kind of gather experiences gather data about this industry and I forget exactly when this happened but Nate was in town in San Francisco where I used to live and uh we were shooting the [ __ ] about the debt industry and and he was really interested in it and poking around at it and he figured out that I had made basically a hobby of learning about debt for years he was trying to pick my brain and uh”
“uh and I had these you know four employees one of them I was having spent half his time like do like consulting stuff and that was me so we're making ends meet and then I got this 300 000 deal I've been working on for a long time and the I guess the question here is how do you get a large company to give you three hundred thousand dollars when you're like four Joker guys and we're working out of the back of a dentist office at the time we didn't tell them that”
“with I guess uh well the the more you can match your spend with the money that you're bringing in the lower your ultimate cost of capital is going to be because you're holding the money in your bank account for less time so you know in a perfect world you do a little loan every month for for whatever whatever you're paying for and the what I've always done with this with these loans which is not like you know the smartest thing to do with loans like the smartest thing is like oh I've”
“so so I think it's really important to that you you're selling this stuff before the product when the product comes online you you should have a whole bunch of people that you've already talked to and are all lined up saying not in there they've already nodded their heads and said yeah I would pay you and I would pay you that much money for this product if you can build it you can come back and be like hey here it is all built and they won't all buy it but some some healthy percentage should uh and and that's so as soon as the thing comes online you basically start selling”
“proceeds what I've seen is you can only use this to spend on marketing so you can only spend on ad dollars with this money and it's like well I'm already spending money on ad dot I don't I need them I I need the money for any money for I don't but that that's and they give you like a card I forget which one this was they gave you like they would give you like a card that you can only a credit card you can only use the number for uh marketing super annoying terms matter there's go through all the terms”
“Took $2.25m from Founderpath over 6 loans.”
“… always know how much I have available”
“In SaaS, VC’s generally want to see some traction before they invest.”
“Non-obvious HR / hiring learnings”
“Think about every area of a company as a process that has measurable results and can be improved.”
Video
How I hit $5m ARR, kept control using 3 different debt providers - Slide Deck
Steve Benson is the CEO and founder of Badger Maps, the #1 app for route planning and scheduling to help outside sales reps save up to 10 hours every week. Steve is also tthe CEO of Badger Sales University and the president of the Sales Hall of Fame. After receiving his MBA from Stanford, Steve joined Google. There, he became Google enterprise's top sales executive globally in 2009.
Steve Benson · Verblio
Adam Baker · Dealpad
Andre Cvijovic · Referrizer
Ari Salafia · Taxtaker
Armando Biondi · Breadcrumbs
Becca Kay · Dingus and Zazzy
Each slide with a short explanation of what it shows. Open the slide text for its exact wording.
30 passages
Sep 2022 Founder500 Steve Benson Founder / CEO of Badger Maps I Used 3 Debt Providers for $6 million in Debt over the last 10 years … here’s what to watch out for
The talk compares the company’s current debt with common loan risks and explains when debt can help accelerate a sales motion. Benson lists a $2.25 million balance from Founderpath, a 48-month repayment term, and a 16.3% APR.
Over the next 20 minutes: Took $2.25m from Founderpath over 6 loans. I’m going to show you CURRENT DEBT WATCH OUT FOR DEBT $0-5M ARR Pay back on 48 month term APR is 16.3% Short payback period Covenants (can restrict business) Penalties and fees (prepayment, draw fee) Sales motion first, then debt to accelerate My first debt deal was RBF back in 2016 My second deal was term loan in 2018
Badger Maps’ monthly recurring revenue rises steadily across the chart, with a brief plateau and dip before growth resumes. The slide reports $406,543 in MRR, with new and existing revenue contributing most of the total.
Badger Maps - MRR Growth This is pretty Smooth, why get debt?
Badger Maps’ revenue trends upward over time but fluctuates with annual and multiyear deals, seasonality, and the pandemic. Benson says debt can help cover cash-flow bumps such as December payroll.
Badger Revenue Growth Not So Smooth - Annual and multi-year deals, covid, seasonality. Debt smooths out the bumps and you make payroll in December.
A presold $300,000 deal illustrates how founder-led selling can create traction before a company has a repeatable sales team. The timeline places the deal in 2012.
Badger Revenue Growth Pre-Sold $300,000 Deal Founder always has to be first sales rep! 2012
The timeline compares an early revenue-based loan with a later term loan, showing how refinancing and price shaped the move between providers. It lists $888,000 across four tranches at about 18%, followed by $1.5 million across three tranches at 17% APR.
Badger Debt History Debt from Lighter 2016 Borrowed $888k over 2 years in 4 tranches. This was an RBF loan. interest rate worked out to about 18%. Had a term that we had to pay back all interest that we would have paid if we had kept the loan the whole time to refi them out. Did another traunch and renegotiated the term out. Then Refi’d to Scaleworks They would loan to about 4x MRR Debt from Scaleworks / Element Finance 2019 Borrowed $1.5m over 3 traunches Straight Line, 4 year, Loan at 17% APR I switched from Lighter because Scaleworks was cheaper debt and they would loan to 6x MRR
The slide describes a shift to Founderpath for a four-year, straight-line loan that Benson says was fast to arrange because it connected to company data. It lists $2.25 million across six tranches at 16.3% APR; the stated 8x MRR lending figure is explicitly uncertain, so it is omitted.
Badger Debt History Switched to FounderPath 2021 Borrowed $2.25m over 6 tranches. Straight Line, 4 year, Loan at 16.3% APR They would loan to 8x MRR (I think, Daddy Warbucks - Nate hasn’t said no yet) Very fast and painless because they built it all to connect with all our data, so they can make decisions right away
A product screenshot shows the capital dashboard alongside a deal list and a panel for estimating a requested amount. Customer names are obscured, while the interface illustrates how a founder can review deal status and available financing.
My Founderpath Dashboard
The annotated dashboard points to the available-capital panel to show that a founder can choose when to draw funds. The callout emphasizes visibility into remaining availability without relying on small interface figures.
Take $ whenever I want … always know how much I have available My Founderpath Dashboard
Loan terms can limit cash flexibility through liquidity requirements, performance covenants, early-payment penalties, or restrictions on spending. The slide recommends checking repayment length and comparing offers by converting them to APR.
Debt Terms to Watch Out For Liquidity: Make you keep $.5m in bank whole time? Debt “gotchyas” COVENANTS EBITDA and MRR min growth covenants Can they demand you pay back faster? PENALTIES Early payback penalty can be huge (negotiate this removed) Short term is dangerous. Go for 36+ months. Use of proceeds: Make sure you can actually spend the money where you want ! Terms Matter. Make sure No prepayment penalties There is a lot of BS in fintech and lending today. Just convert a loan to an APR to compare. Ultimately this is all good for the space, it’s a good time to be a revenue generating SaaS company PENALTIES TIPS
Building a company can consume time and attention, so Benson urges founders to decide which personal priorities matter most and focus on them. He frames the early period as demanding, with momentum becoming easier to sustain once the business is moving.
This is not a job. Successfully founding a meaningful company will likely take away most of your bandwidth to be a good friend, a good son / daughter, a good mother / father, be in good shape, participate in extra-curriculars or your community. You should probably forget about all your hobbies and what you think is fun. Ruthlessly prioritize and account for your time. You can still get your highest personal priorities done - so decide what those are. Identify the things that really matter, and do only those things. Now is Not a great time to have work life balance. Getting the Train out of the Station is hard, but once the Train is in motion, it’s Unstoppable. getting Real about your life as a Founder
Benson closes with a thank-you and identifies himself as Badger Maps’ CEO.
Sepr 2022 Steve Benson CEO of Badger Maps
This section introduces Benson’s non-obvious lessons from building Badger Maps to $5 million in ARR over 10 years.
My Non-Obvious Learnings Bootstrapping to $5m in ARR over 10 years
Benson frames his advice through experience leading Badger Maps and its sales training business, alongside a background in sales leadership and podcasting. The slide presents these credentials as context for the lessons that follow.
My background / biases / perspective Steve’s LinkedIn Steven Benson is the Founder and CEO of Badger Maps, an App for field salespeople for routing and mapping. CEO of Badger Sales University. After receiving his MBA from Stanford, Steve was named Google’s top sales executive globally in 2009 Hosts the Outside Sales Talk a podcast for Outside Salespeople where he interviews industry experts on their top sales tips, and is currently President of the Sales Hall of Fame.
Sales begins before the product is finished, and founders should lead early customer conversations before handing work to a process. Later sales hires need an owner’s mindset, not only an employee’s role.
Sales starts with a founder Before the product is built You shouldn’t hire your first sales-person But eventually you have to build a process and let go - but not completely If you don’t have this founder, you need to get them onboard. But they have to think like an owner, not an employee (which is harder than it sounds - most people are too entitled and don’t have the stamina to be a true owner)
The slide argues that SaaS founders with traction can use debt to fund further growth before considering venture capital. It also recommends comparing lenders by APR and loan length, based on the speaker’s experience switching providers.
Debt before Equity In SaaS, VC’s generally want to see some traction before they invest. If you have traction, you can get debt, you can use that debt to grow more before you bring in VC. So always do that. There are several great debt providers to SaaS companies. I used Lighter Capital first, then switched to Scaleworks (debt product now called Element) because it was a better deal, then switched to FounderPath because it was a better deal. Most SaaS businesses are not a good fit for VCs because of their business model. There is a lot of BS in fintech and lending today. Just convert a loan to an APR to compare. Length matters.
Outsourced, domestic in-house, and foreign in-house engineering can each work, but differ in speed, cost, quality, and ownership. The slide says foreign teams can be cost effective and high quality when managed well, while domestic hiring can be expensive for a bootstrapped company.
Outsourcing Eng vs Hiring Domestic vs Foreign In-House Any can work, can be combined, and there are Tradeoffs here that guide what’s best for a company Outsourcing is fast to get going, but probably hard to get the same quality / people caring / true ownership as you do in-house Domestic in-house is very expensive, so don’t do it if you are bootstrapping. Foreign in-house can be hard to set up, but very high quality and cost effective. You have to have someone awesome on site managing it.
A well-supported customer service team can reduce churn by answering recurring questions quickly and treating staff well. The slide recommends documenting common answers, setting a short response target, and expanding coverage as the team grows.
A non-obvious secret to reducing churn Pick a country with an inexpensive labor market that has a lot of people that speak solid english, even if it’s often with a serious accent. (South Asia, Philippines, Africa, South and Central America) Build a Customer Service team there. Treat them really well. Meaning health care even when its not standard, pay at the high end of the market, have a career path etc. 90% of your customer questions, complaints, requests, etc are the same 50, questions that you can answer in writing. Often it will be 2 or 3 of these questions in one request. Have this team answer those questions with an SLA of 10 minutes. Eventually staff up to do this 24/7/363 (no christmas and nye). Expand into phone support, phone outreach to existing and prospective customers, support your sales and CSA teams..
The slide contrasts founders’ appetite for risk with investors’ preference for experienced hires. It frames that difference as a reason startups may need to think carefully about which hiring signals predict success in their own environment.
Non-obvious HR / hiring learnings Fact: SaaS has grown at an unreal rate and so has its need for people Fact: every VC is risk averse (because they’re smart. We as founders aren’t risk averse enough) and encourages their investments to hire for experience - because they are smart and know it reduces risk.
Hiring for experience can be costly and does not guarantee that someone will stay. Benson cautions against job hopping and recommends considering whether candidates are likely to remain long enough to become effective.
Non-obvious HR / hiring learnings You can’t hire for experience without lots of cash, and they probably won’t stick around forever anyway. Don’t hire job hoppers, it takes a while for employees to get good at their job, and job hoppers are gonna hop. A lot of young people care about experiences more than value creation - they think that’s where personal growth comes from. They either regularly hop because they are always searching for the next thing, or because they keep getting pushed out. Both are bad
The slide recommends hiring promising people who are new to a role rather than relying only on conventional credentials. Benson argues that practical SaaS work often combines existing technologies to solve real problems, so a narrowly prestigious résumé is not always the best signal.
Non-obvious HR / hiring learnings Empower people even if they don’t have the experience and haven’t earned it - take the risk and hire inexperienced people. Right out of college or new to the role and industry. Some of my best hires would never have been hired by a VC backed firm. What most people base their hiring decisions on is only weakly correlated to success on the job. If you were a quantum computing company you might need the Stanford PhD who spent the last decade at Google to win. If you are a SaaS company, you are rarely revolutionizing the world with technology, you are usually solving a real world problem by combining and implementing existing technologies.
Benson argues that perfectionism can slow a startup when work is overbuilt, creative ambition takes priority over delivery, or fear of failure blocks action. The slide favors people comfortable with practical tradeoffs and imperfect outcomes.
Non-obvious HR / hiring learnings Fire Perfectionists. They have no place in a startup. A lot of straight “A” students that went to great schools are not cut out for startups because They do “A” work when “C” work would get the job done Startups can be too much of a grind where they want to be creative geniuses There is too much much risk of failure staring them in the eye - people who have never failed don’t like staring failure in the eye.
Teams should distinguish work that must be excellent from work that only needs to be good enough. The slide encourages fast, inexpensive completion for lower-stakes tasks while reserving higher effort for work where quality matters most.
Non-obvious HR / hiring learnings A startup founder and everyone in the organization needs to 80/20. Know when something is good enough to get the job done. Good is the enemy of Great, but a lot of things don't have to be Great, they have to be fast, cheap, and done. Know when something needs to be Great and adjust accordingly.
Around hire ten, the slide suggests grouping recruiting, office, and administrative work into one role before splitting it later. It also recommends practical legal support that can handle both legal and operational needs.
Some non-obvious early hires Around hire #10: Hire a HR / Recruiter / Office Manager / Administrative Assistant. Eventually you can hire someone else to split up the role with them, but this can all be rolled into one at first. Hire a lawyer who doesn’t want the big law career. This is easy because its a job that isn’t for everyone that goes to Law School, and there are a lot more Lawyers than there is work for Lawyers. They can do a ton of the operational and legal work and act more like a COO than a lawyer, but because of your saved legal bills this basically pays for itself. At least a legal intern from day 1 is a worth its weight in gold.
A bootstrapped company does not need to chase only the huge markets emphasized by venture economics. The slide cautions that large, ad-supported markets can be crowded and difficult places for a smaller company to compete.
Solve medium sized problems VCs will tell you that you are wasting your time if you aren’t solving Really Big exciting problems. This is likely because these are the only problems that make their economics work out. This has created an overinvestment in solving big problems and silly things that have great ad revenue. These are very competitive markets and there will often only be one winner - probably a bad place to bootstrap.
Medium and small problems can support valuable companies even when they do not fit venture capital’s preferred growth timeline. The slide contrasts billion-dollar outcomes in seven years with founder returns over a longer horizon, including $25 million, $50 million, or $100 million, or $10 million in annual cash flow.
Solve medium sized problems There are a lot of medium sized problems and a ton of small problems that no one has even started to try to solve. A lot of them won’t be a billion dollar business in 7 years like VCs need them to be. But they might be in 15 or 20 years. A lot of them the founders will walk away with $25 or $50 or $100 million dollars - or maybe they’ll just throw off 10 million a year in cash for a decade or so. These are outcomes that VCs consider a loss, but still make founders very rich - but only if they didn’t bring VCs onto the captable.
Founders should concentrate on a clearly defined ideal customer until they have meaningful traction. The slide advises limiting product and marketing expansion while tracking where acquisition cost performs poorly relative to customer lifetime value.
Focus your efforts Focus on your Ideal Customer (ICP) until you have meaningful traction there. Think hard about their sub-industry, size, buyer profile, geography etc. Until you are pretty big: Don’t build an android version - people with androids don’t buy things Don’t market to Europe or Asia - let them find you In general, pay attention to where your CAC to LTV ratio sucks and don’t spend money marketing there
Usage, referrals, retention, and lifetime value can reveal which customer groups are most valuable. The slide recommends using those patterns to refine pricing, customer profiles, messaging, and upsell priorities.
Focus your efforts You could go after several ICPs, and often there will be some disagreement who that is, and it will certainly change with time. Look at your usage rates and play with price points. Look at who is using your product most, giving most referrals, has the lowest churns and best LTV, etc Use current customer data (demographic/psychographic, usage stats) to create a profile of hobbies, interests, influencers, etc that will help your marketing messaging Identify “High Value” customers - easiest to upsell/best retention rate. Over time they will make up majority of your revenue
Treat company work as a process with measurable results that can be improved. Writing down procedures makes handoffs clearer as a growing team passes responsibilities between people.
Build business processes Think about every area of a company as a process that has measurable results and can be improved. Write how to do things in Google Docs and make it so the process can be passed cleanly from person to person. There is a lot of passing around when you are growing fast, so get good at it.
The final slide recaps the talk with “Be cheap, not stupid” and placeholder bullets under two section labels. Its visible takeaway is to control costs while applying judgment about where the company spends effort.
Over the last 20 minutes, I showed you: Be cheap, not stupid I’m going to show you ACQ. FOR PLG SECTION 2 SECTION 3 Be cheap, not stupid Be cheap, not stupid Bullet 1 Bullet 2 Bullet 3 Bullet 1 Bullet 2 Bullet 3