Signals Fintech Founders: Decimal’s Matt Tait on Fundraising During a Downturn

Hola Fintech Friends! You may be wondering, who is this Dez guy? And why the hell is he in my inbox? Great! I have answers for you.

I’m in your inbox because just like all of you, I’ve fallen into the world of fintech. I first got exposed to the fintech ecosystem when I went to work on Cadre’s Biz Ops & Growth Team back in 2019. In 2021, I joined FirstMark Capital as an investor where I focus on investing in fintech businesses building in highly fragmented, vertical markets. In addition to that, I started a Substack called All Things Venture where I interview entrepreneurs, operators, and investors doing the work to support the early stage venture ecosystem, as well as share the occasional hot take.

And the most exciting part? I’m joining the TWIF team as a Staff Writer to bring the most engaging, relatable, and informative insights from a diverse array of fintech leaders to Signals. So to be more succinct, I’m in your inbox because I love writing, I love the startup ecosystem, and, specifically today, I have an awesome interview to share with all of you.

Today’s interview is with Matt Tait, the CEO & Co-Founder of Decimal. Decimal is building software to solve accounting operations for small businesses. As readers of This Week in Fintech are well aware - solving problems for SMBs can be lucrative (i.e Hubspot), but extremely challenging (i.e Brex). I recently had the opportunity to interview Matt Tait, the co-founder and CEO of Decimal, to get his understanding of the competitive landscape of AP products, his tips on building a remote first company, and how a little serendipity can lead to snagging a highly coveted single word domain name in 2020.

BUT. Before we get into today’s interview. Let’s play two truths and a lie. Ready?

Okay, great.

Those were the two truths and the lie. I’ll let you all grade yourselves on if you guessed the lie correctly, but in any event - I’m excited to share today’s story about Decimal. Let’s dive right in.

Matt! Could you tell us a little bit about yourself? Tell us about Decimal, and tell us about the problem you're trying to solve.

Yeah, so I mean, I'm from Indianapolis, my co-founder, Jacob, he lives in Boston. Now, one of the benefits of running a remote only company is that we embrace that ourselves. And we love the ability to work from anywhere and have that as part of our business. Jacob and I are repeat entrepreneurs and we grew up around entrepreneurs, so we've seen firsthand in a lot of ways what's hard about running a company and where there are problems. And so, with that in mind, we started Decimal in January of 2020 to solve accounting operations for small businesses, because if you're a company today, you actually need three types of accounting to survive. You need somebody to file your taxes, somebody to give you high level strategic advice, and then you need somebody to pay your bills, get paid, and track it all. And the thing with accounting operations is, everybody hates doing it and your choices are basically, do I hire a bookkeeper who's really expensive and probably terrible? Or do I hire an accounting firm, also very expensive, and definitely terrible?

So you don't have a good option and you hate this area of your company, and it's way harder than it should be. So that's how we got into doing accounting operations. And another thing important for us was, with as crazy as tech has been the last couple of years, we said, “Hey, we want to build a scrappy bootstrap company that doesn't need any fundraising.” So we did that for two years, we got it up to about 30 people, and our goals were we always want to be profitable. We always want to have the ability to be profitable, and to be a well run company. Part of that is influenced because like I said, we grew up in the heart of the Midwest with traditional companies. The companies we serve, they don't have the opportunity to go raise money. They have to stand on their own profitability. So we said, “Hey, let's do that, let’s be like them,” so when we went out to raise we were profitable.

We talked to 42 venture funds over the course of three weeks. We opened and closed a round in like three and a half weeks. And we said, “Hey, we don't need you, but we'd like to go faster and we're looking for a great partner to do it with.”

Could you give some additional context for other founders on what your focus was on in those two years of building toward profitability?

We really lucked out with Decimal. Like doing accounting operations for a startup, we picked a market that you have to do to survive. If you don't do accounting operations, you go to jail, and your business goes under. So we didn't have to convince people they needed accounting operations. They already knew they needed it, which meant that they already had pre existing spend and that pre existing spend is in the category of like a $60,000, $70,000 a year employee. So we can help them solve that at a dramatically lower price, which is still an $18,500 ACV which is extremely high in the SaaS market. So we're like a lower mid market enterprise SaaS price point. But the alternatives are multiples upon multiples of that spend. So we looked at it that way.

The other thing was, we did it ourselves for a while. Like Jacob was doing accounting operations and building the platform at the same time. I'm selling and trying to get people interested and for a while it was just us and we learned a ton by just rolling up our sleeves and getting it done.

And then we started hiring, and every time we profited - we hired. We profited. We hired, and we just stair stepped our way up.

How do you think about the competitive market? There's a lot of software companies looking to own the accounts payable and accounting software stack. How do you think about competing with Bill.com, or Quickbooks? Where does Decimal fit?

So that's a great point, because if you're running accounting operations for a small business, you need somewhere between 5 and 15 different software tools to do it. You need QuickBooks, you need Bill.com, you need Ramp, and that number just keeps going. You have to operate on all these different platforms.

So for us, our platform combines workflow communication and financial data into one place. So all you have to do is work in one place and it pushes to those point solutions. So we've got a good friend who runs Routable, a bill pay competitor to Bill.com. And as we've gotten to know him over the years, he's always laughed. He's like, “Hey, what you guys are doing is absolutely needed. It's just way too boring for me to want to do.” So we're like that boring thing that glues everything together and brings the noise and chaos into one place. Because no one else is doing it. QuickBooks is a good hub. They built an amazing platform where they want bill solutions to integrate into, payroll solutions to integrate into, credit cards to integrate into. But all of the workflow, all of the communications, all that financial data, if you want to pay one bill you're going to three different places just to do it. It's better than writing a check. Bill.com is way better than writing a check, but it's still very boring, and you have not great people doing it.

And so that's where Decimal comes in. We create a single source of truth to simplify the noise.

What’s it been like building a remote first company in Indianapolis? Is there a growing tech ecosystem there?

You know Indianapolis is a great place for me. I've got three little kids and my wife works. So I've got three acres of land and during the pandemic that was glorious. All my buddies from New York were like, “Can I fly down and just camp out in your yard?”

But yeah we’ve been really lucky because over the course of the last like 15 years, we've had a couple of major exits, the biggest one being Exact Target to Salesforce, which dumped a lot of money on the entrepreneurs in the tech market. The foundational base of tech is here; it's definitely not New York, or Austin or San Fran. But it's a good kind of hub. But for us, we chose to be remote, which I think a lot of people want. Not everybody though, and we screen for that pretty heavily in the hiring process. We like people that actually did remote only work before the pandemic because they made that choice before they were forced to make that choice. But I think, I think, a lot of people are gonna end up in more of a hybrid type situation. For us, we’re  remote only, and to be successful we have to be very intentional and intentional about every interaction. Intentional about mental health, intentional about checking in. What we did when we were six people is different than we're doing now that we're 60.

For the other founders that subscribe to TWIF, what does that look like? What do you do differently now that you’re a 60-person company and have raised $9.2 million dollars?

The biggest change is that Jacob and I are no longer the people checking in on everyone. We have to train and teach our team to check in on their team and we have more than one team now. We expect every manager, every team leader to bear the responsibility of creating their own culture that is a reflection of our general culture. And so, we do a lot of teaching on what is Decimal. Who are we at Decimal? What is important to Decimal, what are the behaviors, we want you to embody it Decimal? And then we rely on our team to do that. And then we also rely on our people.

Being intentional has been a big focus for us, and a lot of times I’ll just cut my entire day and I’ll say “Hey, I’m gonna spend the back half of Monday, just like randomly slacking and zooming people.” We use this tool called TeamFlow and I’ll just pop over to their desk and be like “hey what’s going on? How are you doing? How can I make your life better?” I think that’s important, and I would have done that if we had an office, I just have to be a bit more intentional about it now.

What role does serendipity play for you as a founder? I think what I found as an operator, and now definitely as an investor, some of my most magic moments have been entirely the product of being open minded to new things.

If you would have told me in January 2020, that there was a pandemic coming up in 60 days, I probably wouldn't have started Decimal. But the pandemic turned out to be the perfect time to start testing, and it turned out that it was a really good, lucky chance. The biggest chance that Jacob and I have related to serendipity is at the end of 2020, we didn't want to make a profit. So we were looking for some things that we could spend money on, and we randomly figured out that there was a fintech company in Australia that was going bankrupt that owned Decimal.com. We bought it for eight grand. As far as domain names go, that was a great deal. So, if everything goes under, if Decimal folds, we joke around with ourselves saying we can at least make money selling that.

And the last question, one of my favorite questions is what advice do you have for any aspiring entrepreneurs?

I would say you have to build a plan and be willing to throw the plan out the window 100 times. And that's just the nature of when it hits the enemy in the marketplace. You just need to roll up your sleeves and work at it and do it yourself, there's absolutely no substitute for knowing what you learned doing it yourself. I think doing it yourself and being willing to adapt is really important as an entrepreneur.