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SaaS Interviews with CEOs, Startups, Founders
How TitanX Hit $9.7M ARR After Buying IP for $200K
00:15:40
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- [00:00]
A
What did you spend on the IP?
- [00:01]
B
1 million 200 grand up front. 800 grand seller note.
- [00:04]
A
What's revenue today at Titan X?
- [00:06]
B
Today we're sitting at the time of recording this, we're at 9.7 million ARR.
- [00:10]
A
What's your largest customer pay you per
- [00:12]
B
year today one just expanded to 406 ARR. Three year contract.
- [00:16]
A
Oh wow. Okay, so it's a $1.2 million contract. Did you get creative on this acquisition? Was a 10 million acquisition, a million upfront or how do you structure it?
- [00:23]
B
Yeah, it was a $13 million acquisition. We put 7 million up front. We went growth equity, so we raised 27 million and then 10 million went in our pocket as secondary cash.
- [00:31]
A
Zoom. Henry Schucket's info came and offered you $200 million all cash today to sell the company. Do you take it? Hey folks, my guest today is Joey Gilkey. He's a serial entrepreneur and the founder of Titan X, a sales intelligence platform that created the phone intent category. He famously bet his entire net worth on the company shutting down three other cash flowing businesses to focus on a proprietary model that predicts who will actually answer your cold call. Under his leadership, it's grown to millions of revenue and they just recently raised a Series A. Joe, you ready to take to the top?
- [00:58]
B
Let's do it, brother.
- [01:00]
A
All right, so tell me first, how did you get into this space? Are you an ex sales guy or when did you launch?
- [01:04]
B
Yeah, man, I've been in the enterprise sales world my whole career, so started off in the fortune world.
- [01:09]
A
Okay, so tell me about that. When did you acquire that piece of IP? What year?
- [01:12]
B
That was August of 2023. And I acquired it for a different reason than it turned into. So I seemed like a brilliant, more just like a brilliant idiot thought how I was going to use it was I was going to build it for my, my fractional business is going to be the moat around that services company. We started using it in like a licensing model at the fractional company. And then I realized pretty quickly that it was, it was like dark magic that was heavily expensive and very slow. And if I can get my hands on it, I can throw money in R and D and optimize it. Plus I knew where a lot of the bodies lived when it comes to where does unique telco data live and fraud detection data and all that kind of stuff.
- [01:50]
A
So why, what did you spend on the ip? Did it, you know, was it millions
- [01:53]
B
of dollars or 1 million on the dot cash, 200 grand up front, 800 grand seller. Nope. So I turned $200,000 into what is currently valued at 100 million. You know.
- [02:05]
A
Okay, well now we have to like, I got to figure out where to jump around. I'm curious about so many things. So I guess why did you feel like you needed to buy the IP versus just build it from scratch and or the million bucks just bought you so much time.
- [02:16]
B
It bought me a ton of time for one, for two. A lot of my competition again the goal is to, to both build the moat and pull the drawbridge up from competition. So a lot of F in my space were starting to, to look at it, see it, use a little bit. And there are some big behemoth competitors like memory blue, abstract marketing and things of that nature on the like outsourced sales development world that were starting to get their hands on it. And I was like, if I'm going to protect this and have a unique value prop, I got to own it and I'm going to dictate who can use it.
- [02:45]
A
What was, I mean, I interview a lot of folks that tell me they have proprietary data and then when you dig under the hood, all they're doing is buying other people's data, they're running an ETL process on it and then selling it back to customers. What was the actual proprietary data set here? Was it a process or actual data set?
- [02:58]
B
It is both. Right. So and it's been built upon dramatically at this point. So when I bought it, it was a tech enabled service. So there's a lot of like technology enabling humans in the loop to power it. And so for us it was more about how do we make this scalable without having a deprecation of the quality of the outcome. So if anything it's actually gotten faster, it's gotten cheaper, it's, we can do it at scale at this point and it's more effective in terms of the, the data we're able to find now.
- [03:24]
A
So fast forward today you've grown this thing. You bought it for 200k cash plus 800 sellers.
- [03:28]
B
Note what's reven at Titan X. Titan X is sitting. We just did a, a small acquisition. We paid low eight figures for that and that is in the dialer space. So we acquired a company called Frontspin at the time of this going out that will be very public. So Frontspin was built for high velocity dialing. Not a very sound business, but an incredibly sound and scalable technology can scale to a million users. And we've been power users of Frontspin in a lot of different ways. It actually powered the call center in the early days. That's how we know so much about it. It excels in call deliverability. So anyways, today we're sitting at the time of recording this, we're in early 26. We're at 9.7 million ARR.
- [04:07]
A
That's post acquisition, right?
- [04:08]
B
Post acquisition, they're contributing about 2 million. So excuse me. Wow, old school. Titan X is sitting at about 7.7.2, 7.4 and front spins at 2.1.
- [04:21]
A
And did you get creative on this acquisition? If it's, you know, what is it, 10 million acquisition, a million up front or how do you structure it?
- [04:26]
B
Yeah, it was a $13 million acquisition. We put 7 million up front. We went growth equity, so we raised 27 million, 10 of which is primary. So that's for growth. A little bit more than10.7 million went towards the acquiring Frontspin. Six million of that from Frontspin CEO got rolled in and then 10 million went in our pocket as secondary cash.
- [04:47]
A
Because I want to. First off, it's very rare to find a founder that's as transparent as Joey, so I'm going to really push on this. One of the things that I see founders, they're just making a mistake right now is, you know, when you go out and raise external capital, people say, Nathan, you just hate vc. That's not the. That's not true. What I actually am saying is if you're going to go give up control, take cash. Cash as well. Don't give up control and cash. So, like, Joey gave up some control here with the Series A, but he also got paid. He got his first bite. I mean, I don't know, Joey, what your personal net worth is, But I imagine 10 million secondary is meaningful for you.
- [05:13]
B
Yeah, I mean, it, it certainly adds some padding. I mean, I've done well in my career, but it. I did bet my net worth on this. This. So I'm basically just replenishing a lot of capital at this point. But yeah, it helped.
- [05:24]
A
So let me ask you a question. You raised the 27 million at what valuation?
- [05:28]
B
Just under a hundred. 90 something. 92. But since then we've grown. We've added. We've added about a million two in the past month since the acquisition finished. So we're well over 100.
- [05:41]
A
The reason I'm bringing this up is this is a really cool arbitrage here. Mostly public companies do this, but you're doing it in the private markets. What I mean by that is when you did the 27 million round at what is called 100 million post money and you're doing 7 million of ARR. That's about, about a 14.3x multiple. At the same time, you use that money to go buy front spin, which was 2 million of revenue. Right. For call it. I think you said 7 million. Right? That's right. Is that right? That's 4x13. Oh 13. Okay. Still though, you're still in the money.
- [06:08]
B
And so I wanted to give them a piece, put them on the cap table. Obviously it's earned. And so I had a lot of criteria I want to control. I wanted to steer the ship. Don't touch my culture. Respectfully. Go F yourself if you want to. And they were like cool. We believe in that. That's great guys.
- [06:25]
A
Up in, you know, Founder Path, my main gig, it looked very supportive. Joey's deal, I'll just put it that way. So update. You'd also, I guess Joey say good things about updata. Oh, they're awesome.
- [06:33]
B
You know, that was the biggest thing is I need a partner that believed in our vision, knew our market. Like when they showed up for the first management meeting, they'd interviewed customers, done deep market research. Like they came prepared.
- [06:44]
A
Whenever you're ready though, I will convince Trey and eventually you to take a $5 million term loan from Founder Path with a, with a four year IO period and an all in interest rate in the 12 to 14% range. No warrants, no PGs, no nothing. Click that.
- [06:57]
B
There we go. All right.
- [06:58]
A
Hey, so where do you do you keep running this playbook over and over. I mean you effectively could buy your way to 100 million bucks of reven just doing the same thing over and over.
- [07:05]
B
Yeah, I mean I look at again this the buy versus build risk quadrant. For me it's, it's more along. What's the timeline? What's our goals? When's our recap timeline of when we're actually recap this thing again. I plan on rolling this thing two, three times in terms of rolling equity over. I just really believe in the vision. It's always going to be about the partner. It's going to be about the valuation, clearly and what the secondary looks like on those deals. But we have, you know, with where Titan X lives today, we are an intelligence layer that lives between where people get their data from. So think ZoomInfo, Clay Apollo cognizant and where they dial that. Right. So that goes through Salesforce SCPS and then eventually makes it to Nooks and Orem and now Frontspin well, we, we captured the bookend there on frontspin with, with having the, the dialer and the intelligence layer built in. What is what I do believe is the future. I don't want to be a data provider in the sense of I'm not trying to compete with Zoom Info and those guys. I think data is a comm. It's. How do we manipulate that data? How do we use AI to really help inform better decisions? How do we close the full feedback loop of. Here's how I built a list. Here's how it's scored with Titan X, here's how it performed in the dialer. What does that tell me about the next list for my reps? So I think we'll probably play an MMA play there. I've got a couple targets in mind I can't necessarily talk about. I know you're going to ask on that front end of the bookend. How do you know?
- [08:24]
A
How do you know I'm going to ask. Will you listen to the show?
- [08:26]
B
I haven't listened. I read your book back in the day actually, when I was broke. Oh, nice. Yeah, that was actually arbitrage a few things. I arbitrage the Chrome extension back in the day off your. Yeah, I went and bought a Chrome extension. Look at terrible reviews. Yes. The unique part about us is there's, if you think about our whole model, we've got 70 plus signals that we're pulling in or sources, most of which are either compliantly scraped in some ways or purchased on the private markets or it's public data. And then there's. There's human elements to what we do that's impossible for AI touch. Outbound dialing is regulated by FCC's TCPA guidelines, so you can't touch that. And that's a very small micro thing. But we have a lot of other things.
- [09:09]
A
No, I think that's extremely relevant though. I mean you just give a perfect example. When someone comes to me and says, Nathan, you should, you should invest in the company. We have proprietary data. If they can't give me an exact answer like you just gave, I say guys like the foundation models are just going to scrape this and anyone can get this easily. What's your ip? So that makes a ton of sense. It's super interesting. Guys, remember, I am not just a YouTuber I'm investing into my third fund. We've deployed $250 million into 550 software companies so far. Again, at founderpath.com if you're interested in capital, I would love to cut you a check because I know you're investing in your education. You watch my show. So sign up@founderpath.com and when you get the onboarding email, I reply and I see all those, just reply and say, nathan, I found you through YouTube and I'll make sure to prioritize you. I would love to cut you a check. Check out founderpath.com the question I've got for you, how are you getting customers today? Because when I put Titan X and Ahrefs there's like no traffic. I think he maybe did a recent rebrand. How are you getting customers today?
- [10:01]
B
I would say right now we're 45% inbound organic or about 9%.
- [10:06]
A
Wait, where is that though? Look, I'm not seeing any. I'm seeing very little inbound organic here.
- [10:12]
B
That's.
- [10:12]
A
Is it a different website you're getting traffic from?
- [10:14]
B
No, Titanics I.O. is correct. I mean we get about 9,000, 10,000 uniques a month.
- [10:20]
A
So maybe Ahrefs is just full of it.
- [10:22]
B
It's full of it. Yeah.
- [10:24]
A
Interesting.
- [10:24]
B
No, we probably, we probably generate, you know, in our average tick we have different customer bands. Right. So we have 3 to 10 reps, 10 to 30 reps, 30 to 50, 50 plus those kind of corre to a price range of 24k, 50k, 90k and 250k. 45% is coming through inbound organic. That's about 140 meetings a month just from the website. With high ACV, outbounds are bread and butter. Clearly we use our own product and so about 38% comes through outbounds sourcing phone only. And then I would say the rest is a mix of paid referrals and affiliates. We're building the referral affiliate market right now. It's, that's a really underutilized channel for us, but it's powerful.
- [11:01]
A
What's your high, what's your largest customer pay you per year?
- [11:03]
B
Today we're sitting at well one just expanded to 406 AR 1006000 a year, three year contract.
- [11:13]
A
Yeah, that's great. Okay, so 406 per year over that,
- [11:17]
B
three years AR one year each year.
- [11:20]
A
Oh wow. Okay, so. So it's a 1.2 million dollar contract.
- [11:22]
B
Yeah, we have one right now that's they're, they're a publicly traded company. They're currently at a quarter million, but they're about to expand like 1.5 ARR
- [11:29]
A
in a 3 year sales team be able to drive that upsell revenue. Is it number of dials, number of seats, product Based upselling something else.
- [11:36]
B
Yeah, it's so we're. We're unique in the sense not that unique. We're. We're consumption based. So it's a credit model and so we're very hands on. Account management technical account management technical solution consultant. We have a VP of customer strategy that comes from this space and so when we jump into an org like the one I'm talking about they we got in at 250. We've only got one team currently there's six teams I can expand to. So a lot of it's moving to different teams and therefore adding credit consumption. Their credit allotment goes up but then there's also different plays. You can go up, down, sideways. You can get into their partner side, you can get into their go to market inbound side. So six is the outbound side but then you have other channels that are other departments we can crawl our way through 300 over consuming. Therefore it's an expansion opportunity. Are they under consuming? It's a churn flag and then we're just looking for different ways. And now naturally that we've acquired the dialer. Now we have a whole another product line that will be able to add on. It gives us a whole nother level of intelligence and signals for how they're using platform.
- [12:27]
A
Interesting. If as we wrap up here, finish your revenue story. You launch in 2023 with the acquisition of IP. What was 2024 ending? ARR.
- [12:35]
B
Well we didn't have one because I didn't launch this till June of 24. So I acquired in 23 as the IP to be the moat around the services company. I made the decision in early 24 to sunset the services company again. It was doing mid seven figures and then June 1st of 24 is when we took our first dollar beta launch. 200 users. It was like we're trying to do a PLG model like the first month or two I realized that's for the birds. And so we ended up going 0 to 1.4 million at the end of 24 and then 1.4 to whatever 6 ish 6 something end of 25. And then now we're with the combined acquisition and the growth of 26 so far about 9.7.
- [13:16]
A
Really fascinating and all that early again going from zero to six minute revenue that quickly. I just want to make sure I'm not missing any learnings from you. Was there any like customer acquisition strategy you used in those early days?
- [13:26]
B
Yeah, I mean like one, we do have a superpower in our tool. It's like why we have our retention is why our NR is out the roof. It's why our Magic numbers are 4.1 the last quarter.
- [13:34]
A
What's NRR?
- [13:35]
B
The net revenue retention. Oh, it's a.
- [13:37]
A
What is your. I know.
- [13:38]
B
1.36.
- [13:39]
A
Come on, you know me. You know I know what NRR means. But you're at 136. Okay.
- [13:43]
B
Yeah. Gross dollar retention is a little low. It's like 92. We're fixing that. And then our. Our magic number was 4.1 q4 versus.
- [13:51]
A
Why do you say you're fixing the 92? I mean, that's not terrible. On this Segment, I have 92 gross, but 136 net yet.
- [13:56]
B
I want to see us at 97. It's my goal.
- [13:58]
A
Yeah. Interesting. All right, well, hey, finish up with a prediction here. What do you guys think you'll finish 2026 with?
- [14:03]
B
2026? 18.7.
- [14:04]
A
If someone came, if Zoom. If Henry Shucket Zoom Info came and offered you $200 million all cash today to sell company. Do you take it?
- [14:10]
B
Absolutely not. That's why so quick? Well, I have. You know, part of my growth equity deal is I throw in some kickers I need. Tell me what you mean by that. If we 2.5x, I get something back. If we 3x, I get something back. If I 3x on a certain timeline, I get something, something, something back.
- [14:24]
A
Like you set up an esop pool and that gets distributed revenue targets.
- [14:28]
B
Yeah. Bonus structures. I get equity back points back. So on.
- [14:31]
A
Super smart. This is awesome. I've learned a ton here. Joey. If people want to follow, follow you online, learn more from you, where can they find you?
- [14:37]
B
I'm Pretty active on LinkedIn. LinkedIn.com Iron Joe Gilkey and Ty next
- [14:42]
A
IO guys, really interesting founding story. Had a seven figure agency in 2023. He said, you know what, I'm using this one tool. Let me go buy the IP. It's called phone ready leads. Spent about a million bucks to do that. 200k cash up front. Rest was a seller note. Ultimately took that 200k and turned into a $9 million AR business. 9.7. Now today it started off with 200 beta use. Call it June 2024. He then killed that model, moved towards enterprise and broke 1.4 million bucks at the end of 2024. Scaled to 6 million into 2025. Again now today, scaling nicely. Just did a series A of 27 million bucks at around 100 million post money valuation of which there's a large secondary component of 10 million bucks. The rest went to his first or second, really. Acquisition of a company called Frontspin doing 2 million of ARR. Bought it for 13 million bucks. Creative deal structure there as well. Now focused on breaking call at 14, 15 million bucks here in 2026. Titan X, if you're doing outbound and you're using phone numbers, test them out. Joey, thanks for taking us to the top.
- [15:32]
B
Thanks, man. Appreciate it.
- [15:33]
A
You won't believe this. CEOs revenue. Click here to watch the next episode right now.