Peter Peter - Founder, UserActive

From Bootstrapping To Pre-Seed Funding with Denis Pondelak

From Bootstrapping To Pre-Seed Funding with Denis Pondelak

In this interview, Peter speaks with Founder of DDD Invoices, Denis Pondelak, about the journey from bootstrapping to pre-seed funding while building his company which is revolutionising global electronic invoicing for businesses.

Denis shares some insightful takeaways on how to:

  • Craft a Winning Pitch Deck: Discover Denis’s journey from refining a pitch deck to effectively communicate a complex solution and captivate investor interest.
  • Seize International Market Opportunities: Denis’s strategy for expanding DDD Invoices across new territories and capturing the growing B2B electronic invoicing demand.
  • Master the Art of Fundraising: The experience of transitioning from bootstrapping to pre-seed funding, including insights on investor conversations and pitch deck evolution.

Gain invaluable insights into scaling a SaaS venture, conquering compliance challenges, and securing pre-seed funding in this 15 minute interview!

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The Journey From Bootstrapping To Pre-Seed Funding

[00:00:04.950] – Peter

Okay, so I’m here today talking with Denis Pondelak from DDD Invoices. Denis, welcome. Can you please introduce yourself and tell us a bit about who you are and what you do?

[00:00:15.170] – Denis

Yeah, thank you, Peter, for having me. Yeah, so, at DDD Invoices, we are building a global electronic invoicing platform that allows software providers like ERPs, CRMs, different B2B, SaaS, POS Systems, etc, to comply with global invoicing regulations, but locally. So when they scale, they don’t have any problems with invoicing regulations as they’re a subject to change quite regularly, especially in Europe where we started.

[00:00:48.780] – Peter

Great. Okay, cool. So are you a solo founder or you have a co-founder in this business?

[00:00:53.920] – Denis

I have a co-founder. Actually, the whole business is actually a family business. My parents started the company many years ago and now actually DDD Invoice is a spinoff of DDD solutions. DDD Solutions is focusing more on the general software projects. But just recently, around two years ago, we basically started to grasp the concept of electronic invoicing and then also started exclusively to work on DDD Invoices that is actually now a spin off utilising what we’ve built at DDD Solutions now to be able to provide a comprehensive solution on a global scale.

[00:01:40.540] – Peter

Okay, nice. Can you tell us a bit about your team size, where you’re at in terms of revenue, burn rate? A little bit so we understand where you are with the business.

[00:01:50.340] – Denis

Of course. Yeah. So I started the company, this spin off, together with  Dušan, he’s been into the ERP industry for around 30 plus years. So the whole technological aspect is done by him and his team. We are about eleven people, seven on the technological side and four on the marketing and the sales side. So the whole platform actually started as an integration platform in the cloud, as an integration platform for businesses. And then it kind of switched to electronic invoicing platform since we grasped the idea and found out how big of the electronic invoicing actually is in the general scale.

[00:02:47.380] – Denis

The whole business is actually quite interesting because in order to operate our system, we have seven people working on the technical side. But we differentiate between the technical side and the configurators of our system because really we don’t need any developers in order to configure the platform itself because of the way it was done. So when I say seven technical people, I mean four actual developers. But the three configurators are actually non-technical people by education, but they can still operate the operations that would be normally required by the developers itself.

[00:03:28.240] – Denis

So that leaves us quite… We can expand to other countries faster, we can employ people that don’t have technical skills and they’re easier to get on the market. In terms of the size of the business. I said we are eleven people. We are currently at the beginning of the DD Invoices process, making around one 100K per month and we have around 48 integrators into… This will be the software providers.

So our clients range from different local ERPs. We are also working with different SaaS providers like rent-a-car software providers or parking system providers that require fiscalisation for example. But we are also able to integrate into the enterprise’s own ERPs. So for example, we have one integration into the SAP system in Montenegro as well as one bigger company and their own integration to their own ERP. Also on the lookout for more companies now when Poland and Romania are moving to B2B electronic invoicing.

[00:04:35.060] – Peter

Cool. Okay. What did you say your MRR is? Denis?

[00:04:38.980] – Denis

So month revenue is around 7.6, a little bit short of eight with the integrators and I didn’t count into that. So before starting, we were developing a normal web application just for a user interface for invoicing. Right. That of course has all the abilities of the platform. So in the platform we are adding new countries, new electronic invoicing, new fiscalisation support and this web app, all these features and we are doing around 4000 more of that one. But this is like a separate brand of DDD invoices.

[00:05:19.540] – Peter

I see. How long have you been operating the business?

[00:05:24.500] – Denis

So we incorporated this thing actually just recently in April 2023. I have been doing electronic invoicing for around 2.5 years now. Started as the marketing for the web app and then in September last year we kind of grasped the idea of the global electronic invoicing, realised there is a very big potential here, started the company and also incorporated and now expanding the team.

[00:05:59.600] – Peter

Cool, okay, that sounds great. So you’re working towards profitability. What was your current burn rate?

[00:06:11.140] – Denis

So it’s quite a lot still since we needed a lot of development in the beginning, we are currently burner is I think about 23,000 per month.

[00:06:28.200] – Peter

It sounds like most of that is going into product development and software development but also marketing now.

[00:06:35.840] – Denis

Yeah, correct. So the whole platform itself, of course it needs maintenance and what we are also doing is expanding or adding the new country’s standards into our platform. So this is where most of the funding is going. I wouldn’t call it product development, I would just call it basically maintenance and expanding because the product itself, it’s already live, it’s already operating and there are not any new features being added at the moment. But yeah, the other thing is then of course reaching out. Also we are talking with different companies to employ an infield sales team. So yeah, I would say around half into marketing and half into the product maintenance thing.

Navigating the fundraising journey: Refining the pitch deck for funding

[00:07:26.210] – Peter

Okay, sounds good. Okay, so what’s really interesting at the moment is that you’re currently looking for your pre-seed funding. So would you like to tell us a little bit about how you’ve been approaching that, what things you’ve learned and what have you learned about seeking your first round here.

[00:07:44.900] – Denis

Yeah, I won’t lie, it’s a stressful project that we started. In terms of the fundraising. Yeah, I actually spoke with around 30 investors in the last two months and it’s the first time I’m doing that. Also the whole company’s first time fundraising, everything till now was bootstrapped. But now we want to basically scale this thing and have a bigger market, get the bigger market quite faster. In terms of the fundraising experience, it started with a really bad pitch deck that we improved with every conversation. Of course we also went through the accelerator. That helped us a lot with getting the intros. But now kind of we have quite a good pitch deck already. 

It also helps we have some revenue, so of course the investors are more keen to talk to us. And with every investor you learn something. We are still kind of grasping the whole concept of how to properly speak to them. But I would say we are close to getting a deal. We want to get the funding in the next couple of weeks and we have a couple of promising conversations lined up. And here I would just say that reach out to as many people as you can and also learn from every conversation as you go. Note to self, as well, yeah.

Strategies for Securing Pre-Seed Funding: Communicating with Investors

[00:09:37.340] – Peter

Denis, what was your biggest learning that you changed in your pitch deck after speaking with some of the investors?

[00:09:44.830] – Denis

Easy. Every founder loves their product, right? Every investor loves the opportunity. So speaking about… It’s a tough mental change you need to do because even though some investors… Also our product is quite hard to grasp because we are not directly into the consumer, we are talking with the software providers that have consumers and we are actually solving a problem for them. So this is for some investors, that they are not in the space, hard to grasp and hard to explain, eloquently in a short period of time that you have in those couple of minutes. So yeah, switching from finding the way to easily explain what you do and then, once they understand what you do, talk about the opportunity for them. This is the key here.

The Future: Pre-Seed Funding Plans

[00:10:39.720] – Peter

I see. Hey, that sounds really great. Sounds like you shifted your mindset from thinking about the product to learning to pitching the opportunity and painting a picture for investors that they can get interested and excited about. Yeah. Good. Okay, so what’s next for you? How do you think you will allocate the pre-seed funding? What would you look to be spending that on and what do you think it will do for the business?

[00:11:05.460] – Denis

So with the preseed, what we are able to do is we’re able to allocate most of these resources to the sales and marketing. So now it comes down to execution as well as keeping, of course, the whole platform ready. We are already, I would say 60% to 70% already incorporated the Polish and Romanian standard into our platform. So in that regard, we did our job and now it comes down to basically selling, doing the proper marketing.

[00:11:41.040] – Denis

After the end of August, we will also be launching our new website and then doing the whole inbound campaign as well as start with the proper outbound campaign from September to December as quarter four is coming to the finish. But with the older funding, all the preseed, this would basically give us the whole runway for another twelve months. For the whole twelve months, we are looking basically to cover the whole of Poland and Romania, get the clients there and then start to shift the focus to the next countries that are going to mandate B2B electronic invoicing. It will be France, Spain and Belgium. So at the end of that period, we will be starting to look for the new seed round to attack the next countries.

[00:12:41.520] – Peter

Hey Denis, thanks for sharing all this. It sounds fascinating. I wish you all the best on your journey. And with your seed round, how can people follow you and also check out DDD invoices?

[00:12:53.690] – Denis

Yeah, sure. So I’m on LinkedIn, so you can just type my name there. It should pop up as well as on dddinvoices.com. I’ll be happy to have a chat with you if you find our solution would bring you some peace of mind and get you back to solving the core of your business. And stop focusing on the compliance part. We handle the boring things.

[00:13:16.120] – Peter

Cool. Okay. Sounds like you’re doing something really useful and valuable. Okay. Thanks again, Denis. Great to speak with you.

[00:13:21.380] – Denis

Thanks for joining.

[00:13:23.280] – Peter

Okay, see you later. Bye.

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