Transcript

Jason Kirby: Hey everyone, welcome back to Fundraising Demystified. Today we have with us Lloyed Lobo from Boast.ai. Welcome to the show, Lloyed.

Lloyed: Excited to be here, Jason. Thank you for hosting me.

Jason Kirby: Now we're excited to share your story. You've had a lot of success raising a substantial amount of capital, $23 million Series A and $100 million debt warehouse to go along with it. It would be great to give the audience background on your entrepreneurial journey—what led you to starting Boast.ai?

Lloyed: Definitely. My co-founder and I have been best friends since university—partners in every project. We studied engineering together. Fast forward 20+ years: he’s my daughter’s godfather, I’m his daughter’s godfather. After engineering in Canada, he entered Johnson & Johnson’s engineering leadership program (they picked two per country). I moved into startups. I asked an entrepreneur what skill I should build if I wanted to start a company someday; they said sales. No one would hire me in sales, so I took an entry‑level cold‑calling role at a small startup. My parents—immigrant expectations—were losing it: “You have a software engineering degree and you’re cold calling?”

Lloyed: Today, that skill has served me most. Everything is selling—from figuring out what to build, to early customers, to convincing investors, media, and employees. I worked at startup after startup. At one in Philly, running GTM, the CEO believed everyone had to be “on” all the time—hustle culture. I’d been in the office till 9–10pm. My wife was in residency at Drexel, working 100 hours. I started going home at 6pm for a week. I got an email: “I liked it when you were in the office till 9–10. Your wife’s working 100 hours. What’s causing you to go home?” My parents were visiting and I hadn’t seen them in a year.

Lloyed: Alex called me and said, “We should do this.” His path: after J&J, he did a startup that failed. He felt he lacked accounting and finance skills, so he studied them. That unique combo led him into R&D tax credits—part finance, part engineering. At Big Four firms, he wrote applications for tax credits, interviewed CTOs, parsed documentation, wrote reports, and defended audits. He called me: “This process is broken.” I said, “Bro, I don’t care what we build. If I can build a company I want to work for, I’m in.”

Lloyed: We worked on several things: Boast; a 2013 chatbot on Zendesk called Automatically (too early, it failed); then a Bessemer-incubated AI sales assistant (raised $6M on an idea; also failed). Meanwhile Boast started as a consulting firm. I’m a big believer in bootstrapping. The best way to bootstrap to millions is to sell a service. People say services are low-margin and unscalable, but services teach you customer acquisition and success, and show you exactly what to build. Over time you automate the process, with maximum control and minimal dilution.

Lloyed: After those failures, we noticed a massive industry: hundreds of billions in government incentives with a broken application process—prone to audits and delays. We decided to automate it. We knew the process from doing it manually. Our first MVP stitched Zapier with Zoho Creator, then we built real software. That got us to $10M in revenue. In parallel, we built a community: our ICP is tech CEOs. Why do they want tax incentives? To fund growth. So we brought them growth knowledge—small meetups, pizza nights, tactical talks on “first 100 customers,” “first sales team,” etc.

Lloyed: Outreach shifted from “buy my stuff” (and “why not use Big Four?”) to “we’re hosting a tactical event with X speaker—10 spots.” People showed up. One day 200 people packed a coworking space: “This isn’t a pizza night; it’s a conference.” That became the Traction community: ~120,000 subscribers today, a podcast, and a big conference—speakers from Uber to Atlassian’s president. Before our $23M round we had a chart showing events directly correlated with revenue. We had zero marketing headcount to $10M.

Jason Kirby: Let’s unpack bootstrapping in a market that just exited “growth at all costs.” You highlight examples of massive bootstrapped companies and the idea of building profit to fund product. Let’s talk about your Series A—it wasn’t traditional, and you were already at $10M ARR. What was your strategy, your goals, and what happened?

Lloyed: I wrote a post about the best way to raise money—bootstrapping while building a community. We weren’t planning to raise. Alex, based in Vancouver, was anti-raise: you give up control and play someone else’s zero-sum game. I’m in San Francisco with a different view, but my track record was failed startups; my physician wife said if we raise and fail, she can’t keep supporting the family—I’d need a big‑co job. That fear was real.

Lloyed: During the pandemic we turned our canceled 2020 conference into weekly live AMAs (webinars → YouTube → podcast). Audience grew. We hosted an in‑person event during a brief reopening window. A partner from a growth equity firm attended, asked who ran it, and later pitched me on being a scout. I declined. They asked about Boast. Reaction: “You’re selling $100 bills for $20.” They probed margins, growth, funding. They wanted to invest. I said we weren’t looking for VC. They said they were growth equity—not boom/bust VC, not PE—investing in capital‑efficient companies with solid margins and growth, including founder liquidity.

Lloyed: That perked my ears—de‑risk personally and still play the long game. We back‑channeled. It made sense. We also sensed the 2020–2021 boom wouldn’t last; interest rates would rise; many would miss projections in 2022. We chose sustainable growth and founder de‑risking over trying to go from $10M to $30M in a year and breaking the machine. More die of indigestion than starvation.

Jason Kirby: Being in position to accept the right capital partner was the outcome of building a great business. It avoided growth-at-all-costs traps and unnecessary dilution. More founders should consider this path.

Lloyed: Exactly. Our four steps to bootstrap: (1) Hone ICP and talk to customers. (2) Offer a manual service and map the workflow. (3) Automate: pull data via APIs, normalize, apply workflow. (4) In parallel, build a community around your ICP so you aren’t relying on luck. An audience becomes a community; a community driving impact becomes a movement; movements create iconic brands. Without community, you rely on HAPN—hoping anyone pays notice.

Jason Kirby: You also raised a $100M debt warehouse. Strategy? How did it come about?

Lloyed: We met the debt provider through our community—another proof point. We identified the broader customer outcome: enable innovators to change the world. Every $1 in innovation returns ~$20 to society. Many Fortune 500s vanish because they can’t innovate. Our vision: bring funding and know‑how to innovate faster. R&D credits take time; the debt facility lets us advance cash now. Because our applications had ~99% accuracy and are tied to government‑backed incentives, lending against them was attractive. Lending also gave us richer financial data to tie R&D to business outcomes—fueling future analytics products.

Jason Kirby: For listeners: how do they take advantage of this credit? Is it cashback even if they’re not profitable?

Lloyed: R&D broadly means product development—new products or improvements. In the U.S., you can get up to ~20% of product development dollars back. If your company has less than five years of revenue, you can take it as payroll tax cashback. Otherwise, it’s an income tax credit. In Canada, it can be up to ~64% of R&D spend as cashback. UK, Australia, France, New Zealand and others also offer programs. It’s powerful non‑dilutive funding.

Jason Kirby: Once you secured the $100M facility after the equity round, what did it do for growth? Key learnings?

Lloyed: Startups are built in phases. (1) Validation: get 10 paying customers. (2) PMF: drive retention—leading indicator is engagement. (3) Product‑channel fit: find a scalable, repeatable channel. (4) Scale: one ICP getting one value through one channel—put ~75% fuel on that fire and ~25% into testing adjacent products, markets, and channels. That’s how we used the capital: expand lending, build R&D analytics, explore new markets/channels—without starving the core.

Jason Kirby: What are you working on now?

Lloyed: I’m writing a book on community‑led growth. Reflecting on my journey—from being a Gulf War refugee helped by community to investors coming through Traction—community is the through‑line. In 2023, marketing costs are up and generative AI floods channels with sameness. Consumers are tired. The old game was company brands; the new game is people and communities. Iconic companies were built on community—Harley‑Davidson, Apple, HubSpot. Community prevents commoditization by keeping you close to customers. The book distills 13 rules from interviewing hundreds and our own path.

Jason Kirby: Where can people learn more about you, the book, and Boast.ai?

Lloyed: I’m most active on LinkedIn: Lloyed (with an “e”) Lobo. The book is From Grassroots to Greatness (fromgrassrootstogreatness.com), with a foreword by Jason Lemkin. Boast is at boast.ai. For our Traction community, visit tractionconf.io or search Traction Podcast on YouTube or Spotify.

Jason Kirby: Lloyed with an “E,” thanks for sharing an alternative path for founders—focus on building a great, profitable company that creates options. Appreciate you being on the show.

Lloyed: Final thought from entrepreneur Jafar Awani: don’t build someone else’s definition of success. Ask: What’s your personal definition of success and the bank balance you’re aiming for? Is there a version of the company you wouldn’t want to work for? How long do you see yourself running it? What’s the argument for raising vs. not now? Align values before taking capital. Thanks, Jason.