Helping a $15K-Per-Deal Connector Build His Back End

0:00Unternehmer/Gast You're just talking to it. >> Yeah. Okay. Great. Thank you. So >> So Alex, I >> Okay. >> What What do you talk about services product access? Remember that one? >> Services >> Product access and how you can service business, right? So what I'm doing is the access part. What we do is we connect cyber security vendors with CISOs at Fortune 1000 companies, chief information security officers. >> Okay, got it. I was like

0:25>> Yeah, sorry. At Fortune 1000 companies. So sellers and buyers, right? So currently they pay us $15,000 for 10 meetings. So that's the access part. Now I have to build the service part on the back end. What they told me they need is, "Can you help us beyond the introductory sales meeting with the entire sales process so that these CISOs don't disappear on us? Let us know how they actually think about the product. >> Sure. >> Give us that feedback, which is very valuable to them, right?

0:51Alex >> How did you get in the Fortune 1000? Cuz that's the hard part. >> Yeah, it is. I spent 10 years at Credit Suisse. I did investment banking. So many M&A deals. So some of them were on the cyber security side. So that's how I got to know these people. >> Okay. >> And based on these relationships I built over a decade, I got them into the network. >> Got it. >> So but yeah, but that's why they pay me all this money because they cannot get to them, right? >> Yeah, for sure. Yeah, yeah, understandable. >> But now I need for the LTV to CAC that 32:1 which struck with me from yesterday's discussion. >> Right.

1:17>> I need to get to there, right? I'm not there yet. So I need to build that consulting on the back end and get the recurring revenues. But if you were in my shoes, how would you structure the pricing and how would And also the other big issue is that this industry is very unique. There's 3,500 cyber security startups, but 220 billion is spent on cyber security. >> Mhm. >> So I always want to take a percentage of that percentage.

1:41Alex >> cry yourself to sleep every night. >> So tell me how how should I think about this? How should I price it and structure it if I offer the back end? >> I would I would think about cuz you have to maintain both sides, right? Because if you start sending them crap deal, you know, crap If you make intros to the CSOs, right, that are bad, they're just not going to want to take more intros from you, right? I see this cuz you came from the investment banking world, which is actually very similar. Like, ironically, unironically, basically you have all these sponsors, right? All these you know, private equity or institutional capital, whatever. And then you have to go get people who want to sell their companies to them, right?

2:17And they want to buy, too. So, it's a marketplace. And you're the middleman. And so, investment bankers get their percentage of the deal and they're structured whatever way. And so, if the majority of the economics, you can actually control both sides, then I think that you can probably get a percentage from the seller, which like the founder, which in this one instance would be the the guys who are trying to sell into the um the Fortune 1000, because on one hand it's like uh you know, it it it's this much to engage with us, but I think that from the service res perspective, think about it as we're going to try and get you a deal, but you have to vet them. Just like every banker doesn't take on every, you know, founder who says, "Hey, I want to sell my business." They're like, "Yeah, it's a piece of [ __ ] I don't want to I don't want to buy it, right?"

2:54Alex >> do that. >> Yes, we do. Right, of course. And so, I actually think that it's you're actually pretty uniquely qualified, which is kind of cool, for the business that you're in, because I I think it's deal making. Cuz especially at that level, it is all deals. There you know, cuz contracts, there's a whole a whole process to it. And so, I think it would make sense for them to pay an engagement fee with you, and then you get paid only on on success, right? So, then they'll know that you're incentivized to get a deal done. And I think you act more like a banker in this with the This is how I would I would think through it.

3:23With the people who are trying to sell into that distribution that you have. Um and then yeah, you get a percentage of the deal. And so, that's where these guys are signing these massive deals. And 2 to 4% same like a banker would. >> No, actually they're willing to offer me 10 to 20% >> of the deal, you're right. And so, they charge a monthly though, because they want the recurring part as well. >> You can I mean, you can. I don't like If you're getting a percentage of the deal, you can either ask for that percentage up front or just get paid on the back end as they get paid, you get that slice.

3:54>> Okay. >> Cuz I'm assuming it's going to be a massive number or for a lot of these companies. [clears throat] They're all multi-million dollar deals. >> Not all. >> Not all of them. Okay, well, some of them >> 250k and up. >> Okay. So, if you get, you know, so there there's 50 grand, so if it's 20% and that's on the small side, um and then above that, if you get 20% it'd be 200 grand. I mean, basically, I think making money is going to be the least of your concerns. >> Right.

4:19Alex Should I split the two offers to give the appointment setting for 15k for 10 meetings and then let your sales force deal with it? And then if you want me to help you, I can do it, or should I not do the appointment setting completely? >> I I would probably just I think in the long term it'd be better for you to just have the best companies. Because then you're going to keep both sides strong. Cuz if you just sell them, you know, 15,000 for 10 appointments or whatever, >> [clears throat] >> like you're going to it the uh incentives are are perverted.

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