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​Podcast, YouTube, Blog​

Dear founder,

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Two months ago, I started tinkering on a new business. A few weeks ago, I created a company for it. A few days ago, I signed a document. And yesterday, a massive wire arrived in a (less-than-a-day-old) bank account.

Podscan is now a real company that has been funded by the Calm Company fund — with a 6-figure amount. 🚀

Enough to allow me to press the proverbial NITRO button in the equally proverbial racing car that is this B2B SaaS business called Podscan.

​🎙️ Enjoy the blog post and the podcast

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Today, in celebration of this massive milestone, I will dive into why I got funded, why I said yes to it in the first place, the risks, my fears, my hopes, my strategies, and what all of this means for someone who has been talking about self-funded entrepreneurship for years.

First things first: am I still an indie hacker? Can this still be called bootstrapping?

I believe so, yes, on both accounts.

The biggest problem in traditional VC funding is a power imbalance between investor and entrepreneur. Too often, raising millions means inviting a voting party into your cap table that ultimately has other interests than you.

But the Calm Company fund is something entirely different. If you listen to my conversation with Tyler Tringas on The Bootstrapped Founder Podcast 304, you’ll learn that the fund isn’t looking for unicorns but instead wants to be the rising tide that lifts all the boats. There is a way to fund bootstrappers without taking away their agency, and Tyler and his team are making it happen.

I should know — I’m invested in the Calm Company fund myself, which makes me a mentor among great founders like Patrick McKenzie, Michele Hansen, Kevin McArdle, and so many more. And now, in a weird twist of fate, I am both mentor and mentee. And I love it — the people around me are all successful and experienced bootstrapped SaaS founders. They do what I want to do.

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And what I want to do won't happen without help, let me quickly highlight my sponsor for this week. We all need to hire, so keep an eye on Paid and their offerings. You will need this sooner than later!

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But —for now— am I still independent?

Well, we’ll dive into the specifics of the funding contract later. Let’s just say that right now, nothing changes for Podscan, other than turning the data platform ingestion system up to 11.

That, by the way, was the whole point of me even contemplating getting funding.

Let me share the story behind the decision, the offer, the signing, and everything in between.

The Decision to Accept Funding

Tyler and I have had crossed virtual paths for years now. He was the first person we called back in 2019 when we had someone interested in acquiring our SaaS business FeedbackPanda and we wanted to check if they were legit. Tyler had sold his own businesses StoreMapper to the same Private Equity company, so we rang him up and chatted with him about his experience.

It worked out well for us, and we kept in touch ever since.

I even co-hosted a podcast with Tyler back in the day when we explored creating a Calm Company course product together.

It probably is no surprise that when Tyler came knocking with an offer to potentially fund Podscan after I’d been building it in public for a few months, I at the very least was ready to listen.

It certainly wasn’t the first offer. I’d gotten a lot of DMs of people wanting to throw money or themselves at the project and myself. That’s very flattering, but not always aligned. Particularly with strangers who I hadn’t dealt with before, it felt dangerous. And several offers of people I have existing relationships with just didn’t fit just yet.

But Tyler didn’t come with money: he came with a plan — and, most importantly, a clear understanding of the potential of Podscan. He understood that what makes the project more valuable is the ever-growing backlog of transcribed podcast episodes, searchable, ready to be analyzed and data-mined. That is the actual costly part of operating Podscan. I can serve thousands of users without breaking a financial sweat when it comes to handling real-time alerts: there is only a finite amount of new podcast episodes being released on any given day. Doesn’t matter if I have to check 10.000 podcast episodes for ten alerts or a thousand — it will only ever be 10.000 new podcast episodes.

But slogging through the backlog? Getting back to 2015 when podcasts became huge? Learning patterns, finding trends, observing journeys? That needs computation power that scales with the money spent on GPU instances.

And that’s the offer on the table. Speed up the time needed to build Podscan into the most comprehensive full-text-searchable database of podcasts to ever have existed. This isn’t just runway money. It’s a time machine.

Of course I said yes.

Particularly as Tyler explained how the Calm Company Fund very recently streamlined their investment process. They used to have a Shared Earnings Agreement, which allowed the fund to participate only after founders paid themselves in dividends or some kind of liquidity event —raising a round, selling the business— happened. But they found it could be even simpler.

So, fortunate as I am, I’m one of the first founders who gets to enjoy the new construct, which Tyler very recently wrote about on their blog: a SAFE with a side letter. The SAFE, a Simple Agreement for Future Equity, is just what it says: if there ever is an event that touches or converts equity, the Calm Fund gets their respective ratio of shares. Until then, shares are fully owned by me. If I never sell, they never own any part of the business — and that’s where the side letter comes in. In that, the shared earnings component is clarified. After a certain time, any dividend that I pull out goes in a small part to the fund. Think somewhere around ten percent-ish. And here’s where the founder alignment is clearly visible. Not only does this only happen when I choose to take money out of the business, it even includes a substantial six-figure salary I can pay myself before I have to pay the fund.

It’s obvious that the Calm Company wants founders to run a calm and revenue-centric business. This isn’t a unicorn hunt. It’s a grazing ground for regular workhorses.

Tyler’s offer came in a few weeks ago.

At that point, Podscan was a personal project.

But if you sign a SAFE, you need a real company with real shares, a real name, and a real bank account. So it was time to act.

Company Formation Insights

This isn’t the first time I had to create a new legal entity for a project. My SaaS PermanentLink was started as a Wyoming LLC because I didn’t want to shoulder the liability of hosting links to other people’s content.

Podscan is no different. I needed a structure that works well with funding, would look serious and legitimate to my customers, and make it easier to work with all the wonderful SaaS solutions I’d need.

Opening a Delaware C-Corp was the best path here: Delaware makes it easy and fast to open a business, even for Canadian residents like me, a C-Corp would make executing the SAFE easier when times comes, and having a US company serves as a trust signal.

There are quite a few services out there that facilitate founding such a company. I went with FirstBase.io because that worked for me last time — and because they’re also a Calm Company. I remembered them being super fast the first time I used them, and they were quite quick this time around, too.

Within an hour, all my documents were dispatched to the authorities. Within 24h, their arrival there was recognized. Then the Easter week happened, and on Easter Monday, the registration documents arrived via mail, were immediately scanned, and allowed me to open a bank account with Mercury.

That’s all I needed to receive the funds. Mere hours after my new account was opened, the wire hit the account. Seconds after that, I was pre-approved for a credit card, which would be mailed to me but was already virtually available.

With the financial power of the investment, I started ramping up my GPU resources. And every day, I add a few more, making sure my data backend scales with the compute power I have access to.

That’s the technical side, the business side, and the legal side.

But let’s dive a little into the emotional rollercoaster of all this.

I can tell you one thing: I thought raising money would feel a little different. I mean, it clearly is cause to celebrate and massive validation of my entrepreneurial efforts, but just like when we sold our last SaaS business in 2019, the moment of the money hitting your account is both transformational and hilariously uneventful at the same time.

That’s likely because funding is fuel, not reward. I need to make the best of this money, so I immediately went into action mode. Where can I best apply it? How should I budget? That stuff.

But I want to step back and reflect on what this means for me as a founder. I hinted at this in my very first question: am I still a bootstrapper? Am I an indie hacker? Or a venture-funded entrepreneur? Am I still allowed to wear T-shirts? Should I get a Patagonia vest?

The strange is that nothing changed, yet everything is just a little bit different. All I truly know is that I’m extremely protective of my own agency to do things the way I think they should be done. In some way, this funding added a little bit of pressure. Even thought no part of the contract will punish me for potentially failing, the meta-contract between the fund, Tyler, and me pretty much forces me to give this my best. And that creates some sort of expectation within me, not wanting to disappoint my friends, peers, and heroes.

But it certainly released a lot of pressure around the shaky phase of any B2B SaaS business: the post-revenue pre-profitability stage. Now, I can operate for a good few years without having to shuffle my personal finances too much. Podscan is pretty particular here, with the scalable ingestion expense to build the historical backlog. With my other businesses, Permanent.link and Podline.fm, I probably would not have accepted funding. There just is no need or even potential use for a 6-figure financial injection. I wouldn’t know where to put it. But as I’m nearing almost 2 million hour-long podcast episodes being ingested into Podscan, I understand how dealing with massive amounts of data is not necessarily a common thing among indie hackers.

Special requirements, special solutions.

And special dedication, too.

Impact of Funding on Current and Future Projects

With the funding comes one requirement, and that was something I wanted to clarify with Tyler before I signed: the fund invests not only in the specific idea you go to them with. Their money goes to a founder, a business, an agent of entrepreneurial effort. Which means that any substantially similar side project or new related business idea that crops up in the first year or so has to belong to Podscan. If I build a podcasting side project that uses the Podscan API, it’s a Podscan-owned business. Or a SaaS that serves the same customers.

The rational here is that the fund provides fuel for a founder who is still exploring where they’re actually going to be driving. And since we never exactly know where that is, it’s only fair to let the fund participate even when we pivot early on.

What this means to me is that I’ll be focusing my efforts over the next few years primarily on Podscan or whatever it might run into. Of course I’ll still run the podcast and the blog and the newsletter —existing projects are excluded from that clause— but I’ll probably chill on the new side project front.

Podscan, besides all the funding, is already extremely promising. It would be a waste not to give it my full attention. I’ve found validation for this business idea through several channels: Podscan has paying customers, excited investors, and I personally have connected with the most amazing founders and operators in the podcasting world. I even established early technical partnerships and opened communication channels with founders in the same field who are eager to build lasting marketing partnerships.

Stuff is happening, and I’m in it to win it.

In the end, this business can and likely will be massive. Today marks an important day, for sure, but now it’s on me to make it happen.

I’d love to know how you feel after me sharing this news. Are you excited? Confused? Amped up? Let me know on Twitter, or send me an email at arvid@podscan.fm — and if you know someone who could benefit from social listening and media monitoring in the podcast world, send them to Podscan.fm as well. Every user, every customer, every helpful founder checking it out is a person I truly truly value.

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I'll share a few updates about my SaaS on the pod, and I'd love to know what you think about them! Please leave a voice message at podline.fm/arvid 🥰

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And if you want to track your brand mentions on podcasts, check out podscan.fm!

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Classifieds

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