July 2022 - Traction Capital

B2B sales company, Saltbox, has received a $500,000 investment from Traction Capital to finish out their $675,000 raise. The Minneapolis-based company is revolutionizing the way B2B organizations improve the buying experience of their customers. As Saltbox continues to grow, Traction Capital looks forward to working closely with their team.

Saltbox is a Salesforce startup that helps to digitize, personalize and automate a B2B consumer’s buying experience. With their extensive knowledge of Salesforce, they are able to improve storefront experiences and purchases, in addition to streamlining order management. As B2B buyer personas shifts, B2B buyers are expecting more B2C– like experiences and Saltbox assists organizations in identifying and catering to that shift.

“The investment and partnership from Traction Capital will play a pivotal role in helping Saltbox accelerate our mission of helping B2B companies reimagine the buying experiences of their customers through the use of Salesforce. I’m also excited to bring Traction’s experience as operators to our board of directors, as their guidance will be just as important as their capital as we look to scale the business and capitalize on the tremendous opportunity for rapid growth that the salesforce ecosystem provides,” says David Blue, founder of Saltbox.

The company strives to deliver engaging, frictionless, B2C-like buying experiences to their customers. Unlike their competitors, Saltbox specializes in B2B commerce and order management, with capabilities spanning the entire Salesforce platform. Their expertise and ability to serve end-to-end buyer transformation use-cases also helps them stand out. Saltbox’s three main industries of focus include manufacturing/consumer goods, high-tech/software and medical devices/pharma.

For the immediate future David’s focus will be expanding their software, growing their team, and continuing to innovate within the company. They are currently hiring a Salesforce Account Executive, multiple positions within the delivery organization, and will continue to post as more positions become available. Check out their LinkedIn for more details.

Both experts in their field, Traction Capital and Saltbox are eager to join forces. “We are excited by David’s extensive experience in the field and his ambition to make Saltbox succeed. Traction Capital looks forward to helping Saltbox grow their team and continue to innovate with the implementation of EOS. Our Traction team believes Saltbox has what it takes to transform the way B2B organizations interact and we are eager to help them accomplish that,” says Shane Erickson, founder and Managing Partner of Traction Capital.

By Ellie Pigott

Over the last two years we’ve watched as Covid has turned our world upside down. Virtually every industry was affected, and Venture Capital was not an exception. In an attempt to keep the economy moving while the country was at a standstill, the Federal Reserve pushed more money into the U.S. economy than ever before. Families received stimulus checks, student loans were put on hold, and even the Venture Capital world got a boost.

This led to a record-breaking raise in the VC world. Thanks to the increased amount of corporate bonds purchased by the Fed, many investors were left with an influx of cash. This was re-invested in a variety of ways, one avenue being through VCs.

With the boost of investment money, the obvious assumption might be that VC’s would be investing in more businesses. This is partially true. The number of businesses they invested in rose but not proportionally to the amount of money they raised. According to the Q4 2021 PitchBook-NVCA Venture Monitor, the total number of deals grew to 17,054 in 2021. Up 40% from 12,173 the previous year. For context the total amount of funding almost doubled during this period (330 billion raised in 2021 compared to 166.6 billion in 2020).

This enormous gap in capital and deals can be explained by hockey stick growth in startup valuations. However, as we see the light at the end of the covid tunnel, many are left wondering what is in store for valuations in 2022? While nobody can say for certain, we are already seeing startup valuations trend down. The money that helped VCs achieve their record-breaking capital will still be in their circulation but the rate new capital is being raised will slow dramatically due to the Fed taking a step back.

Valuation data is showing consumer tech and enterprise tech taking the biggest hits, while Fintech, Biotech and Pharma remain steady. Although we shouldn’t expect to see a complete drop off from the 2021 high, valuations will gradually start to dip. However, they are still expected to remain higher than pre-pandemic.

Regardless of which way the market is trending, the importance of an accurate valuation remains constant. With a valuation too high you risk getting turned away from investors before you even set foot in the door. On the contrary, with a valuation too low you risk losing money you didn’t know you had. To help improve your valuation or ability to raise funding, there are a few things to keep in mind.

Well Thought Out and Defined Use of Capital
IP or Protections
Barriers to Entry
Experienced Team
Clear Objectives and Plan
Thoughts Around a Future Exit
Aggressive but Attainable Projections

When presenting to any source of potential investment money, whether it be VC or not, it is extremely important to clearly define your use of capital. It needs to be visible that there is both a need and an effective use for the funds. The best way to demonstrate this is through your budget. Show your revenue, costs, variables, and any extra expenses that you foresee as your company grows.

Going hand in hand with your use of capital is your clear objective and plan. Not only do you need to show where you’re putting the money, you need to show how you’re going to make it work. Do you already have set goals and milestones you want to achieve? How will you stay on track and ensure you meet those quotas?

Consistently measuring how you stay on top of these things will be critical to your success. Part of this approach will also need to include any barriers to enter the market and any potential exit strategies you might foresee. All of these reenforce the idea that you need to be the most educated person on your industry, this will help to back your valuation.

Another important thing to keep in mind is your team. Each individual’s knowledge, expertise and experience will play a vital role in the company, especially in its early stages. It is important to make sure the gaps are being filled. The experience of your team will play a key role in its valuation. If you can prove their value to the company, you may be able to justify a higher valuation.

Lastly, be sure to include your projections. These need to be aggressive but attainable. Show your potential investor you’re a go-getter with confidence in your business but don’t make promises you can’t keep. Higher projections can lead to a high valuation but that’s only true if you can meet those expectations. Falling short of your high projections will not leave others with much faith in you or your business.

With these few tips in mind, it is easy to stay optimistic for valuations in the future. As we enter Q3 of 2022 nobody can say for certain what valuation trends will emerge. Whether valuations are on the verge of a dip or at their all-time high, it’s vital to remember the best type of valuation you can have is an accurate one. If you still have questions about valuating your company, reach out to our team. Our experienced team of entrepreneurs is ready and willing to answer any questions you have.