Frrole Roots For Transparency, Discloses Everything From Equity Shares to Founders Salary

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This post is long due. But as they say, ‘better late than never’.

At Frrole, we take significant pride in what we build. Not just in terms of technology and product, but also in terms of the kind of business we are building, and in terms of the kind of organization that we hope to have one day. We think that transparency, right down to the very bones, is one of the hallmarks of the kind of org that we aspire towards, and we are going to be transparent in a way that people might, hopefully, benchmark against one day.

Before we get there, however, a cautionary note – while we are going to be transparent in an unprecedented manner, we are not going to be illogically or unconscientiously transparent. It defeats the very purpose, and changes a good to a bad.

That having been said, lets share some snippets.

Founders Equity

The founder equity before the seed round raise was divided as 60:20:20 between the three cofounders – Amarpreet, Nishith and Abhishek (Amarpreet had started, Nishith and Abhishek joined in later). 2.5% of it was issued to Rishab Malik, our lone advisor + part-time team member, before the seed round raise.

Seed Round

In the seed round, we raised $245K at a post money valuation of $1.065 million. It took us 4 months to get the money into the account (around end of March 2014) post the verbal agreement on the investment. I still continue to wrap up some last vestiges of the seed round paperwork and record-keeping, so one can say that funding rounds take a bloody long amount of time. (In all honesty, I must however add that partial responsibility for the delay post March lies with me)

Post the seed round, investor own 23% of the equity, 10% of it lies in an Options Pool, and the founders (+ Rishab) own the rest, in equivalent proportions.

Founders Salary

Post the seed round, the cofounders draw an annual salary of INR 12 lacs each (It works quite well for a single guy in Bangalore, and just about works for a family man).

Revenues

While monthly figures make a fast growing startup look a lot prettier, we believe that quarterly averages are more appropriate indicators of overall growth than monthly numbers.

Our Jan-March quarter revenue was ~ $8k, putting us at an ARR of ~ $30K. Our April-June quarter revenue was ~ $19k, putting us at an ARR of ~ $75K. Our July-Sept quarter revenue was ~ $21k, putting us at an ARR of ~ $85K. We had a bad quarter there, visibly, although it was largely expected (on account of the end of Indian General Elections).

Already a few weeks into the Oct-Dec quarter, we are seeing a clear resurgence with more than 80% of our pilot customers coming back to sign recurring deals, and we are looking at guaranteed revenues of ~ $60k for the quarter putting us at a worst case ARR of $240k, with half of the quarter remaining. Our goal for the quarter is to get really close to an ARR of $500k.

As time progresses and the pressures of running a growing business allow, I would continue to share more.

And if you are wondering about the ‘why’ of it all, well, we do believe that this would help us build a great culture, create a respected brand, attract the best people and inspire the trust and confidence of our customers and other stakeholders; but before all that, a lot before all that, we are doing this because we believe that this is just the way it should be done anyway.

I do have a hidden agenda too. If we think that we have the ability to be a public company (and we do think so if its not clear), then I would want ‘the boys’ (sorry, Azhar:)) to start acting like the founders and builders of a public company right from now. As they say on the race track, why go slow where you can go faster.

– Amarpreet

P.S. This post was first written before 30th Sept, hence leaves out a few recent additions. The big missing part is ‘the team’, where we have been uber-selective (much to the chagrin of our investors:)). We now have two phenomenal teammates on board, one offer made for later this year and two offers made for the next year. By all accounts, this would end up being the quarter when the team came together.