How to Scale to $12M ARR: The Serial Founder Playbook for Vertical SaaS and Agentic AI

Summary

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Podcast Summary

Podcast: SaaS Interviews with CEOs, Startups, Founders
Episode: How to Scale to $12M ARR: The Serial Founder Playbook for Vertical SaaS and Agentic AI
Host: Nathan Latka
Guest: Matt Spiegel, CEO and founder of Lawmatics
Date: February 4, 2026

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Episode Overview

This episode dives into the remarkable growth journey of Matt Spiegel, a repeat founder in the legal SaaS vertical. Nathan Latka and Matt cover Lawmatics’ trajectory from inception to surpassing $12M in ARR with only $30M raised, tackling topics like customer acquisition, fundraising strategy, founder equity, team management, lessons from previous exits, and how agentic AI is reshaping vertical SaaS.

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Key Discussion Points & Insights

1. Founder Journey and Early Days

• Matt Spiegel’s Background:
  • Started as a criminal defense attorney and built his first SaaS, MyCase, while practicing law.
  • “Lawmatics was more built out of the experience at MyCase ... understanding what they wanted and where the industry was going.” (01:14)
  • MyCase sold to Appfolio in 2012.
• Exit Lessons:
  • MyCase has grown vastly since its sale: "MyCase was just recently valued at about $2.5 billion. And so I sold it in 2012. I did not sell it for $2.5 billion." (01:51)
  • He was fully out after the original acquisition.
• Pivot to Lawmatics:
  • Founded in late 2017.
  • Assembled a small, strong engineering team; not a 50-50 partnership—Matt retained about 80% at founding.
  • Product development took around a year; first customer in late 2018.

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2. Go-To-Market and Early Growth Tactics

• Customer Acquisition Strategies:
  • Relied heavily on founder’s prior reputation for initial inbound.
  • "It was a lot of inbound right away ... making a couple press releases about me launching a new company ... going to some partners ... and bringing them into us. We went to Google Advertising very quickly." (04:53)
  • Early ad spend: About $5,000 a month.
• Conferences and Paid Media:
  • Conferences mentioned: ABA Techshow (Chicago), Cliocon, and several practice-area-specific events.
  • Advice to early founders: "If you can spend between five and ten grand and get in there, it's usually pretty good opportunity." (08:14)
• Pricing Evolution:
  • Early customers: $60–$80/mo (still honored for legacy users)
  • Avg. ARPU today: $400–$500/mo, trending toward $5-6K per year.
  • Not a deliberate move up-market; more about value alignment.
  • Quote: “People who come to you early, early adopters, they should be rewarded. I don't, you know, see the need to increase their prices.” (08:24)

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3. Fundraising Strategy & Equity Retention

• Seed Round:
  • $2.5M, sold 15–20% equity at a ~$10M valuation.
  • No regrets, enabled faster hiring and growth.
• Series A (Dec 2021):
  • At a market “froth peak.”
  • Valuation: Over 15x multiple, "more than $30M pre-money."
  • “The A round was a really good valuation and valuations were frothy then.” (11:09)
• Subsequent Rounds:
  • Quiet Series A extensions, a $5M ‘series B’ not publicly announced.
  • Total Raised (as of 2026): Near $30M.
  • Founder Ownership: Matt still holds around 20%.
    • "Having the founding team be in that 20 to 25% range or thereabouts at a B is like a really strong position." (16:46)
• On Debt vs. Equity:
  • Matt is generally debt-averse, but open-minded as company matures, especially when profitability is within reach.
  • “I think as we get bigger, I think debt becomes more attractive. As we get profitable, debt becomes more attractive.” (22:23)
  • Nathan offers a hypothetical $5M credit facility—Matt shows openness, yet prudent caution.

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4. Scaling Teams and Founder Dynamics

• Team Size:
  • ~70 full-time employees, of which 23 in engineering at the time of cofounder’s departure.
• Cofounder Transition:
  • Engineer cofounder left amicably after outgrowing his role; was fully vested.
  • “A person who's really good at being a founder might not be good at being an executive leader ... we brought in a much more senior CTO.” (12:20)-(14:10)
  • Vesting schedules followed industry standards (four-year vest, one-year cliff).
  • Maintained a positive relationship:
    • “He sent me a text ... thanking me ... now I understand what you always meant by loving Mondays.” (15:01)
    • Matt: “As a founder, you gotta love Mondays.”

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5. Lawmatics Today: Metrics & Milestones

• Customers:
  • Serves ~2,000 law firms (16:00, 18:07)
• Revenue:
  • Over $1 million MRR, i.e., $12M+ ARR (18:17)
• Growth & Valuation:
  • All recent raises have been up-rounds, even in a tighter market.
  • Multiples tightening but dollar valuations growing, especially with AI expansion.
• Founder Ownership at Growth Stage:
  • Matt stands by his equity decisions, staying above 20% through Series B—"If you're ... in Series B range and as a founder ... founding team be in that 20 to 25% range or thereabouts at a B is like a really strong position." (16:46)

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6. AI Evolution in Vertical SaaS

• The Next SaaS Era: “Agentic AI”
  • “SaaS is dead. If you're just SaaS, your revenue is going to go to zero in the next couple of years. You've got SaaS plus AI ... then you've got SaaS with agentic AI. And that's where I think, you know, the real future is in our space.” (23:42)
  • Lawmatics launching “Qualify AI”—allows firms to build AI agents that handle lead qualification, deliver actionable insights, and incorporate feedback for ongoing learning.
  • Priority: Transparency in AI decisions—not a black box.
• Market Perspective:
  • Some startups raising at "insane" valuations are just “glorified ChatGPT wrappers”; Matt predicts a reckoning for these.
  • Lawmatics focuses on deep, industry-specific data and actionable automation—leveraging massive data sets (over 11 million “takes”).

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7. Founder Exit Philosophy & Lessons from the Past

• Exit Philosophy:
  • After leaving money on the table with MyCase, Matt emphasizes “multiple bites of the apple”—rolling equity into future growth phases.
  • “Our motto here now ... is bites at the Apple. ... By doing recaps and then continuing to build the value ... it's a really valuable approach.” (27:19)
  • Wouldn’t take $240M all-cash unless a substantial equity roll is involved:
    • Nathan: “If Clio or someone similar comes and offers you 20x all cash up front, so 240 million bucks to sell Lawmatics, do you take the deal?”
    • Matt: “No, not all cash. ... It's got to be at least 40% roll.” (26:56-27:09)

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Notable Quotes & Memorable Moments

• “SaaS is dead ... you’ve got SaaS plus AI, which is kind of table stakes now. ... The agentic is where I'm really excited and where I think we're going.” - Matt Spiegel (23:42)
• “People who come to you early, early adopters, they should be rewarded. I don’t ... see the need to increase their prices.” - Matt Spiegel (08:24)
• “Bites at the Apple ... that’s our strategy now.” - Matt Spiegel (27:19)
• “As a founder, you gotta love Mondays.” - Matt Spiegel (15:01)
• On founder transitions: “Sometimes you get to a point where a person who's really good at being a founder might not be good at being an executive leader.” (12:20)

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Timestamps for Important Segments

• 00:00 — Revenue, major acquisition “would you sell” question
• 01:07 — Matt’s journey from law to SaaS; founding story
• 04:53 — Initial customer growth tactics; inbound, paid, and conferences
• 08:05 — Pricing for early and current users
• 10:55 — Raising initial capital, founder equity approach
• 12:15 — Co-founder departure; team scaling and leadership lessons
• 14:20 — Vesting schedules, equity retention, founder relations
• 16:00 — Current team size, fundraising recap, founder share
• 18:07 — Customer count and current ARR
• 23:42 — AI strategy and “SaaS is dead” thesis
• 26:56 — Exit preferences and lessons from previous exit
• 27:19 — “Bites at the Apple” mantra

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Final Takeaways

• Lawmatics serves as a case study in focused vertical SaaS execution, balancing fundraising with founder retention and emphasizing operational discipline.
• The future of SaaS, especially for verticals like legal tech, will be defined by transparency and the adoption of AI agents that execute critical workflow automation—not just generic AI wrappers.
• Founder longevity, relationship management, and multiple liquidity “bites” outweigh short-term exits.
• Transparency in growth, equity, and culture plays a pivotal role in scaling a SaaS from $0 to $12M and beyond.

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To connect with Matt Spiegel:

• Lawmatics Website
• Twitter: @MattSpiegelESQ
• Email: [e-mail]

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Transcript

[A]

Are you more than a million a month in revenue?

[B]

Just a bit more than that.

[A]

If Clio or someone similar comes and offers you 20x all cash up front, so 240 million bucks to sell Lawmatics, do you take the deal? How little have you raised all in?

[B]

I mean, we've still raised a fair amount. We're not quite at 30 million, but I think we're pretty close to that amount. All in.

[A]

How much have you been able to hold onto the company considering that amount of raising?

[B]

So I'm still in a pretty good position, you know, 20%. Ballpark.

[A]

How many customers are you serving now?

[B]

Today we have about 2,000 law firms.

[A]

True or false? The extension you did in past this past year, in 2025. Higher valuation or lower valuation? Valuation?

[B]

Higher. Higher. We were a little bit of a victim of the times because we raised our a at a really, really aggressive valuation time.

[A]

I'm gonna make you an offer. We would do a five million dollar line of credit with somebody like you. Hey folks, my guest today is Matt Spiegel. He's a serial entrepreneur and formal criminal defense attorney, which means I have to be careful on this interview. Okay. Before Lawmatics, he founded My Case, a legal practice management SAS that was later acquired by Appfolio. Lawmatics today is a legal CRM for marketing automation, data, reporting, it, reporting, you name it, law firms use it. Matt, you ready to take us to the top?

[B]

Absolutely.

[A]

All right, now, did you start building this when you were still a criminal defense attorney for your like inside of your own law firm?

[B]

No, I started building my case, my first company when I was at my law firm. Once my case sort of took off and then I ended up selling a tapfolio. That was the end of my legal career, at least up to this point. So no, Lawmatics was more built out of the experience at my case and just, you know, spending years selling to lawyers and understanding what they wanted and where the, where the industry was going. And so that's really what ended up leading to Lawmatics.

[A]

And did you get super wealthy on the my case exit or was it an acqui hire? Can you maybe just talk about dollars there if you can?

[B]

Yeah, I mean, I can't talk specifics on dollars, but it was, it was a life changing event for me. I mean, you know, my perspective on it was. And it's a really interesting, I think, thought exercise because my case was just recently valued at about $2.5 billion. And so I sold it in 2012. I did not sell it for $2.5 billion.

[A]

What was my case ARR back when you sold it in 2012, you remember?

[B]

Yeah, yeah, I do. Because the multiple was pretty extraordinary. We were only at about 500,000 or 600,000 of ARR.

[A]

Okay. And what do you know what it's doing now today?

[B]

I don't know what the specific. My case piece because it's part of a much. You know, it's the biggest property in a bigger company. There are other pieces there, but I gotta believe that it's somewhere around 150 or 200 million of ARR.

[A]

Wild. Wild. And do you remember what multiple you traded for back then?

[B]

It was a lot, I will tell you. It was much more than like 25x.

[A]

Wow. Okay. Yeah. And so just to be clear, the reason I was going down this line of questioning, you were not like, you sold it to. To AppFolio back in 2012, and then AppFolio sold it for 193 million in 2020. You didn't get any bite at that apple. You were 100 out at that point.

[B]

That is correct. I was 100 out, yeah.

[A]

Wild. Okay. All right, let's go to Lawmatics. When did you launch the business?

[B]

2017. Very end of 2017. Took. Took about a year, year and a half to really build. And so we really started selling in Ernst at the end of 2018. Beginning of 2019.

[A]

Okay, so 2018, first customer. Is that fair to say?

[B]

Yeah, it was end of 20, I think, end of 2018 that we had first customer.

[A]

Okay, and how long. And you were working on it just basically for a year prior, coding it?

[B]

Yeah, that's right.

[A]

Okay. Are you the engineering founder? Did you hire a dev shop to do it? How'd that work?

[B]

No, so I'm not the engineering founder. I had another co founder and then a couple of people who were just there from day one who were on the engineering side. We had. We had really proper. A really strong founding engineering team. My co founder is out of the business. He left the business about a year and a half, two years ago. But the other original engineers that were with us then are still with us now.

[A]

Okay, so going back to the beginning, it was you and a co founder. Did you guys just split it 50, 50 at the start, or were you bringing a bunch of extra money? So you had more?

[B]

Yeah, no, it was really my deal. He took a smaller. A smaller split. Significantly smaller. I really, you know, it was one of those things where I was gonna build this company, kind of build it no matter what. I Thought that he would be. And he was a great person to start it with. On the technical side, very young, very, you know, first kind of first entrepreneurial experience. And so it was definitely not an even split, but we're talking.

[A]

We're talking more like a. You keep 80%, he gets 20% kind

[B]

of split in that. In that range. Yeah.

[A]

Okay, cool. So you guys get coding together. You get first customer in 2018. How did you get your first five or 10 customers? Do you remember the growth tactics?

[B]

Yeah, so I think it was a lot of. Thankfully for us, I had done this before in the space. Right. In my case, at that point was a pretty big company. So the idea of me starting another company was just something that I got a little bit of press and got a little bit of. It was relatively easy for us to get out there when we launched. So it was a lot of inbound kind of right away. Right. Just making a couple press releases about me launching a new company, about Lawmatics being ready, going to some partners, going to some people I knew in the space who had clients that they worked with in a tangential arena and, and bringing them into us. We went to. To Google Advertising very quickly.

[A]

How much were you spending those early months? Do you remember?

[B]

In early months? It was very, very small. We were probably, maybe we were spending, you know, five grand a month or something like that. It was, it was. We raised money very, very early. I mean, we raised money right away. So how much did you raise in the first year or two? It was probably 3 million bucks.

[A]

Okay, okay. So you raised 3 million between 2018, 2019.

[B]

Yeah. Or 20. Yeah, 2020, probably. So we did our first, like, true seed round at the end of 2020. So, okay, we had raised about three, two and a half or three million before that because we knew what it would take. We. We knew we were gonna have an opportunity to step on the gas pretty quickly. And so when we had the product ready for launch, it was all systems go. And we had, we had a go to market strategy, you know, a strategy that we had already deployed at great scale at my case. And so we knew what playbook to run.

[A]

Guys, remember, I am not just a YouTuber. I'm investing in my third fund. We've deployed $250 million into 550 software companies so far. Again, @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 [e-mail] 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 sounds like. I mean, I'm trying to identify the most successful growth tactic for your first hundred customers. Was it Google Ads?

[B]

Yeah, it was. It was online. I mean, I wouldn't say specifically Google Ads. I would just say it was, it was paid search and paid social. I think those were, those were the things that really got us going. Now for us in legal, we also went to conferences right off the bat. And though that is a very good growth tactic in our space, lawyers are required to do continuing education. So they tend to get those hours at these conferences that are put on all over the country. They're very well attended and they're very great opportunities for sponsors. So we went to those straight away as well.

[A]

Name one or two of those conferences.

[B]

So ABA Tech show is one of the biggest ones that's in Chicago every year. You now have Cliocon, Clio, one of the bigger companies in the space, my old competitor at my case. They have a fantastic user conference. It's probably the best in the industry. And then personal injury has a lot of each practice area. They have their own trade shows, their own conferences that are very well attended for those practice areas. And we attended those as well.

[A]

And so if someone else is listening right now, launching in your same shoes and thinking about spending money on these events, what would be too much to spend to sponsor some of these events? Earlier on in a founder's career, if

[B]

you can spend between five and ten grand and get in there, it's usually pretty good opportunity.

[A]

And what were those first customers paying you on average per month or per year?

[B]

Oh man, that's a good question. Very, very little. I know that because they are still paying that. And I just have a, I have a personal belief of not really raising prices on people for the foundational platform. People who come to you early, early adopters, they should be rewarded. I don't, you know, see the need to increase their prices. So we still have people that are paying like 60, 80 bucks a month for Lawmatics when, when now it's really costing people four or five hundred bucks a month. So yeah, it was, it was in that range.

[A]

Yeah. Okay, so just to be clear, new customers today, average ARPU is four or five hundred bucks a month.

[B]

Yeah, I think our average, our average revenue annualized is in that Five to six grand range, maybe it's going up a little bit more than that. Yeah.

[A]

Is that intentional? You're intentionally moving up market, so.

[B]

I don't necessarily see it as moving up market necessarily. I just think it's intentional in terms of our pricing strategy and extracting the, you know, matching their value to the value that our customers see. We are definitely seeing more upmarket trends, but the pricing is not necessarily intentionalized for that.

[A]

Okay, interesting. Let's keep going back to 2018. So first customers conferences, paid ads, 5k on Google. Earlier customers paying 60 bucks a month. This is sounds like it's working because you didn't did a seed round. It Sounds like in 2020, what was the size of that seed round we did?

[B]

That round was two and a half million.

[A]

Okay. Remember about how much you. So, I mean, back then, folks were selling between 15 and 20% of equity in their seed rounds. Were you in that same range?

[B]

In that same range, yeah.

[A]

Okay. Okay, interesting. Do you have any regrets about that now or. No, that was the right move.

[B]

No right move. 100%. We've probably raised more than I want because I would like to raise very little, but I have no regrets. I mean, we needed that money. It allowed us to do things, it allowed us to hire, it allowed us to grow faster, and I think we absolutely needed it. And I think the valuation was fair at the time. I mean, I think, you know, maybe we'll get to it. But in our Series A or, you know, that was probably worse timing because it was at the end of. It was December of 2021. So it was literally right as we were falling off the cliff, right before we fell off the cliff. And so we got an amazing valuation at that. And then the few years after, it was very hard to maintain that. So as we had to add money, it was more of like very small up rounds. Not. Not anything significant. So at the seed, though, no regrets about that.

[A]

2.5 million selling 15 to 20%. That puts you at that call around a 10 million valuation, you said.

[B]

Somewhere in that ballpark.

[A]

Yeah, yeah. You said Series A was, quote, an amazing valuation. I mean, can you quantify that at all? Maybe a multiple or an actual number if you're comfortable sharing.

[B]

Yeah, I mean, it was, especially at the time, it was a really good multiple. I want to say that it was in the. I mean, more than 15x.

[A]

More than 15x. Okay. And had you broken a million of ARR at that point?

[B]

Oh, yeah.

[A]

Okay. What was the first million year? Do you remember?

[B]

We hit A million of arrow. You know, I don't remember exactly. I want to say it was probably in 2020, 2021.

[A]

I don't remember investing the seed round.

[B]

Somewhere around there. It had to have been just thinking about where we were at generally when we did our A round. But the A round was a really good valuation and valuations were frothy then. Like that was the last, like that was literally the last couple weeks of these frothy valuations.

[A]

Yeah. And when you, I mean if you're doing around a million of 2 or 2 million in 2021 or 15x, that means maybe pre money you were like 30ish. Is that sort of the right range?

[B]

More than that. Yeah, it was more than that.

[A]

Oh, more than that. Okay, got it. Yeah. Interesting. Okay, well take us forward. Take us into 2024. Your co founder left everyone listening. People deal with co founder problems all the time and no one wants to talk about it. I'm see if I can get you to talk about it. Right.

[B]

Happy to talk about it.

[A]

Okay. Why do you leave? I mean, did you buy him out? Was there a conflict? What happened?

[B]

No, I think, I think it's natural evolution sometimes. So as founder roles evolve, I think sometimes you get into a point where a person who's really good at being a founder might not be good at being an executive leader. Right. As the company grows. So my co founder is one of the best engineers I've ever worked with, period. We could not have built Lawmatics without his capability. But leading a big engineering organization as a CTO is maybe not the strongest fit for him, at least at that moment.

[A]

Where were you at that point? Team size wise?

[B]

Team size? I mean, our engineering team was. Yeah, at that point was probably 23 people or something like that. So it required real structure and it needed a real cto. I think at that point, someone with real CTO experience. And it just wasn't the right fit. And sometimes that misaligns. Right. Where a founder wants to be that role, but as a CEO, that role doesn't fit. And so there's no real space for them at that point. Right. And that just happens. And so it was a mutual split. Right. It was an understanding that like, okay, I can't be in that role here. And the role that would be for me is I don't really want to do. I want to pursue more of a leadership thing. So I need to go somewhere where I can get that leadership experience and add that to my resume, which would be really, really good for. For him in this case. And, and it ran its course and we, we, we brought in a much more senior CTO, someone with, you know, 15 plus years of experience in order to, to kind of lead that organization.

[A]

The advice to startups today is listen, even if you love your founder on day one, still put everyone on a one year cliff and a four year vest. Were you guys both on that? Like what actually happened to it? 100% out.

[B]

No, I mean so at that point he, he had fully vested his founder shares.

[A]

Okay.

[B]

Because it was, you know, it was in 2000 and it was just. Yeah. To 2024 that he left. So yeah, we're, all of our investing schedules are always like you said, four year vesting, 12 month cliff. That's just standard with everybody.

[A]

He's still in the business myself, he still has upside.

[B]

He's still in the business. Yeah. And I wouldn't have it any other way. And be very honest. Like he deserves the equity that he has.

[A]

And his story checks out. He had great things to say about you when he announced his exit on, on, on LinkedIn. So it's nice to see that kind of these splits can happen in an amicable way I think is the lesson from this part of the story.

[B]

So it's funny, he, it's, it's, it's, it's funny. Nathan, he sent me a text message out of the blue like a few weeks ago just sort of thanking me for, for everything and also saying something which I believe in very strongly. So like I always, I'm always a Monday guy. Like I hate the weekends. As a founder entrepreneur, I hate the weekends because work isn't getting done. And I love Mondays because that's the first day that everyone's back and actually working on things, especially on an engineering side. Like I love when product gets developed and so I always, I love Mondays. I think that's like important as a founder, you gotta love Mondays. And he sent me a text message that says like I now understand what you always meant by loving Mondays.

[A]

That's awesome. I love that, I love that. Well that's great that you have a good relationship with them. So that's awesome. Let's go past that. So that was 2024, 23 engineers. 2025 was obviously last year. Give us an update on the business today. How many folks are full time?

[B]

So we are somewhere in the ballpark of about 70 people. We have not. The team has grown a bit over the last year and a half, but it hasn't grown a lot. And that's all again, I like bragging about that. Yeah.

[A]

So I should have. As small as your team. And how little have you raised exactly. How little have you raised? All in?

[B]

I mean, we've still raised a fair amount. We're not quite at 30 million, but I think we're probably closing in pretty close to that amount all in. But. But. But hopefully we don't need to raise any more.

[A]

How much have you been able to hold on to the company considering that amount of raising?

[B]

So I'm still in a pretty good position myself in that, you know, 20% ballpark.

[A]

Okay. So you feel.

[B]

Which I think is like, that's.

[A]

That's everybody, right?

[B]

It is. And I think, like, at this stage, if you're, you know, kind of in Series B range and as a founder, I mean, it depends on if you have a co founder who's kind of an even split. But I think, like, being. Having the founding team be in that 20 to 25% range or thereabouts at a B is like a really strong position. Yeah.

[A]

What am I? My research team, I think, missed something because we only saw a seed for 2.5 and a Series A for 10 million. I'm missing, like, like, 15 million of money raised. Where was that?

[B]

So we did a. We did a few. There's just a few things that were kind of quiet that we didn't feel the need to announce. To announce, but we had a few Series A extensions, some small increases, and then we just did a smaller. You can call it a Series B. We don't call it a Series B, and we weren't public about it, but we did put an extra $5 million on the balance sheet just at the end of last year at a pretty good valuation and designed to kind of get us to this next milestone. The business is growing at a really steady rate. Going to become profitable, if that's what we want to do. And so we decided to do a smaller round, not do a big round, because we may not need it. And we want to keep our options open. And I think that's an important thing for founders. Like, optionality is key.

[A]

Yep. And how many customers are you serving now?

[B]

Today we have about 2,000 law firms.

[A]

Oh, wow. Wow. Can I multiply that times that 400amonth number? That would put you at, like, what, 800 grand a month of revenue?

[B]

We're a lot more than that. Yeah.

[A]

You're more than that. Are you more than a million a month in revenue?

[B]

We are right at about. Yeah, that's okay. That's a Bit more than that, yeah.

[A]

The reason I asked that question, Matt, because I'm also going to ask you a tough. I'm going to ask you a tough question to answer because you've been really transparent. I'm hoping you stick that way. It's really hard for people that raised at mass evaluations in series A to keep raising because like most people, you can't get the valuation again. So, like, true or false, the extension you did in past, this past year, in 2025, higher valuation or lower valuation on a dollar than what you got? Higher was higher.

[B]

Higher. Oh, yeah, definitely. I wouldn't have done it. And I think, look, that's when I mentioned our series A. We were a little bit of a victim of the times because we raised our A at a really, really aggressive valuation time. And so you fast forward the years and evaluations have changed really hard to maintain that value. So we were very strategic about how we raised money over the last few years. And then this is like the business is doing really, really well. And so there was just no way that I'm going to be like, okay, well, we raised in 2021 at this valuation, the business is now significantly bigger than it was then. We're not going to accept anything less than an up round. And so we did. So we raised at a higher valuation. Kind of reset.

[A]

Tighter multiple, but higher dollar valuation.

[B]

Definitely tighter multiple. But I'll be honest with you, I think as we look to 2026, 2027, and we might, maybe there's some type of transaction we look to do, whether it's a really, really significant raise or a recap or something like that, there are opportunities that always present itself. And given where we are in the market now, and especially with some of the stuff with AI, I think we actually will get back to or we have the opportunity to get back to a 12 or 13x multiple on business. If we look to do something. Hey, give me.

[A]

This is a selfish question, but whatever, it's my show, so I'm going to ask it anyway. Right. We actually Talked back in 2020. You were at like 50k of MRR back at the time you ultimately had too much money because you, you raised a bunch of money. Let's say you're now at like call it 12 million of ARR. You know, we're doing 5 to $10 million debt checks and a company's doing 10 to 50 million bucks of ARR. How would you think about over the next 12 months funding the business with more equity versus considering debt?

[B]

So we have this conversation a lot and I've been very transparent. I'll continue to be very transparent. I've always been somewhat debt averse because for a lot of reasons.

[A]

Tell me what scares you about it.

[B]

I think the idea that like, well, like if things go really bad, that debt is still out there. And you know, being an entrepreneur, you're taking a lot of risks. I've seen people get, you know, I think in venture debt and this type of debt situation it's not as you're not, there's not a lot of personal guarantee, there's not a lot of, of individual responsibility that's getting put on some of the debt. But it's, it's also, there's a cost, right? There's the debt service, it's going to increase, you know, it adds to the balance sheet. And so, you know, I've always been of the mindset that I'm going to give up equity. My equity is really, really valuable. But that's how it goes. I'm going to have strategies to keep myself in a reasonable range, kind of the range I want to be in for equity. And that might mean being re upped at rounds, having options given to me, earning those options through equity plans. My board is generally debt averse as well. There are a couple people on my board who want debt. And so we've had this conversation at every step of the way. In fact, we just had it at the end of last year with this money that we raised. There was a voice on our board who wanted us to add a few million dollars of debt as an option. And I'm not opposed to it. But my thought there was I'm not willing to pay for debt that I'm not going to use. I don't want to just add a cost onto the balance sheet for debt that I'm not going to access. And so ultimately, you know, we, we have a board meeting next week and we're going to be really kind of hammering it out. But ultimately my thought was that we don't need it at this point. We have so much cushion, we're going to get profitable. I think as we got, as we get bigger, I think debt becomes more attractive. As we get profitable, debt becomes more attractive.

[A]

Yeah, well listen, I'm going to make you an offer because I'm allowed to because it's my show, so you can take it with you. My offer, just so you have in the back of your head, we would do a five million dollar line of credit with somebody like you. That's under 60 leverage against your ARR, 50 leverage against your ARR. It's a line of credit, so it can sit there and you pay nothing. Right. So to your point, you don't want to take it if you don't need it, but if you take it, then we'll do no warrants, there's no personal guarantee. The interest rate would be something like 14% paid back over four years with a two year extension. And we could even do like a one to three year IOP, interest only period. So take that $5 million offer with you and if you want to engage after the board meeting, like, let me know. I'd love to get.

[B]

So. So you will get an email from my finance director, Brett, probably by the end of the day today.

[A]

Okay. Yeah, we. I love getting creative from a financing perspective with firms like yours. Uh, I hate that you're already down at 20%, but, you know, you're not down to 1%. So let's keep as much for you and the team as possible.

[B]

Yeah, yeah, it's true.

[A]

I love that. All right, Matt. Well, you were, you were like so transparent. This is amazing. I got to give you a little time just to opine on the future of your space. We see Harvey raising it crazy valuations. We see Spellbook, these sort of, hey, automatically redline your legal documents in word using AI. What are, what is Lawmatics doing related to AI? To help folks, you know, do marketing automation better, do data reporting better, etc.

[B]

Yeah. So, I mean, look, my general thought on this is SaaS is dead. So if, if you're just SaaS, your revenue is going to go to zero in the next couple of years. You've got SaaS plus AI, which is kind of table stakes now. Right. And then you've got SaaS with agentic AI. And that's where I think, you know, the real future is in our space. I think, you know, it's. Again, you got to have the AI in there. That's going to be table stakes, you know, generative AI copilot, experience, that type of thing. The agentic is where I'm really excited and where I think we're going. Yeah. Qualify AI is our first agentic AI product. You can create agents, as many agents as you want, who will learn about your data, learn about your practice area, learn about what makes really valuable cases for you, and qualify them, but not just qualify them with a score, it will actually give you an action. Right? Like, tell you what to do with this lead. Like, you should refer this lead. You should chase this lead. We're very, very transparent with our. And this is what I think is really important about our space. Too many solutions in our space are like the data goes into a black box and just something comes out and you don't know what's happening in there. We pull back the curtain on everything happening with our AI model giving you feedback, giving you the why the AI is making this decision, allowing you to give really, really detailed feedback on those decisions and then take that feedback into account for the model and help it learn. So, you know, the world is going to this agentic. You've got platforms like Harvey, which are amazing using the wealth of data that's out there. I think you're seeing so many of these inflated valuations for companies that ultimately are just doing what someone could do in ChatGPT by themselves. And so I do think we're going to see. My guess is that we see a little bit of a reckoning on some of these crazy valuations on some of these companies that are again, just glorified ChatGPT wrappers. So I think we'll see a little bit of a crash on some of those companies. But the companies like Harvey, like what Clio is doing with, I think it's called Vincent, is really extraordinary. It's using the data, it's using every case that's ever been decided in the US Right, and beyond to help you make decisions, to help you, you know, analyze how valuable your cases might be and what, what success rate you might have or what to do as a lawyer in order to get the case ready. Those are things that are really, really interesting from our perspective. We're on the front end, we're on the lead management side, we're on the get more clients, we're on the marketing automation side. So for us, using our data of like, this is what makes a good client, this is what works to convert a lead to a client. We have done like over 11 million takes. We have an incredible insight into what works, what messaging works to a client, what, you know, what email gets them to come back to your office for a consultation, like all that sort of data. And that's where we want to really build these agents that can help you maximize your own lead efforts.

[A]

Matt, I want to get a sense in dollars of how excited you are about the future. Here's the right way to ask this question. If Clio or someone similar comes and offers you 20x all cash up front, so 240 million bucks to sell Lawmatics, do you take the deal?

[B]

No, not all cash.

[A]

That was a quick answer.

[B]

Yeah. No, I mean, that's the answer. The number is really, really big. If it was going to be all cash 20x, I'm doing it. But it's got to be at least 40% roll.

[A]

Interesting. So you learned the lesson with my case. You don't want all cash up front 100%. You want to do maybe like a 60% majority recap. Hold 40% roll into the next thing.

[B]

Or the opposite, maybe 40% and hold 60. I mean, our motto here now, and actually we've been. One of my big investors who's a close friend is kind of putting this up. He kind of coined it and he's putting it up in his office as like a mantra, but it's bytes at the Apple. I think that's our strategy now is like you can kind of strategically get a company set up to have multiple bites at the Apple by doing recaps and then continuing to build the value and keep, you know, getting more and more and more. And I think that that's a really valuable approach. And from my perspective, someone who never wants to leave the business, I'm having too much fun. It's a really attractive way to do it.

[A]

Yeah, Matt. All right. It's a great, great story. Great vision. If people want to follow along, where can they find you online?

[B]

Yeah, so easy to find me. I'm on Twitter. Think I'm Matt Spiegel esq, Something like that on Twitter, on all the socials. But our website, lawmatics.com you also. I'm always around. Email me mattlawmatics.com if any listeners, they have thoughts, questions, feedback, advice for me. Want advice? Email me. I love, I love chatting.

[A]

Guys. Matt's doing about 12 million bucks of revenue today, but didn't start that way. He sold his first company, My case, back in 2012 after he scaled it to 500,000 bucks of revenue. It was a big win at the time, but now that company's been bought and sold many times. It's doing hundreds of millions of revenue. And Matt goes, wow, maybe I should have stayed on a little bit. 1 or 2% kept it. But anyways, in 2017, he moved on, got a co founder, kept about 80% of the new business. Lawmatics in 2018, got his first customer. Those first 100 customers really came from, you know, 5K a month on Google Ads, a couple key conferences that they went to, spending 5 to 10k, ultimately doubled down in 2020 with a $2.5 million seed round where he sold caught between 15 and 20% of the business, broke a million of ARR around this time, then did a $10 million Series A at quote a really good valuation, higher than a 30 million valuation in 2024. He the company outgrew. His co founder who Left is about 23 engineers. But he scaled nicely today, increasing ARPU from about 60 bucks a month from earlier customers to 400 bucks a month today serving thousands of customers 12 million of ARRs. They continue to scale with their team of 70 in the world of lawyers. Lawmatics.com check it out. Matt, thanks for taking us to the top.

[B]

Thank you, Nathan.

[A]

All right guys, you won't believe this. CEOs revenue. Click here to watch the next episode. Right now.