Catalyst technology exists to help small technology services firms realize their aims.
Our mission is to organically grow technology companies.
We aim to repeatedly move struggling but well-aimed technology services companies from nascence to being attractive acquisition or investment targets -- typically greater than $10 million in value -- by either strategic buyers or private investors. We do so all the while respecting the vision and culture of those companies.
What to Expect
Catalyst has a basic process to introduce, assess, attach, grow, and ultimately detach Pod companies (PodCo's). The descriptions of each of these stages should give a good sense of what to expect life to be like.
This initial stage is simply where Catalyst and a prospective pod company (PodCo) first discover and begin to understand each other.
From Catalyst's perspective, it can be as simple as knowing the name of the prospective PodCo, a point of contact with authority (e.g., owner, CEO, board member) at the prospective PodCo, and a basic understanding of what the candidate PodCo is and aims to be.
From a candidate PodCo's perspective, we hope that the contact with authority has explored the essence of Catalyst, and made contact with one or more representatives within Catalyst. Additionally, a conversational understanding of what Catalyst tries to do, an inkling of "What to Expect" as well as awareness of our desired "Attachment Criteria" will quickly help determine if we should proceed beyond our introduction.
We have any number of ways to get to know of prospective PodCos, including informal networks, references, and opportunistic meetings. Ultimately, we hope that with the successful detachment of our first few PodCos, that our reputation will build and that prospective Podcos will approach us outright.
Assessing whether or not a PodCo should attach to Catalyst is a nuanced stage that should not be taken lightly. As with most business decisions, though we try to make things systematic and predictable, there will always be subjective or intangible forces that make decisions complex and nuanced.
We share our attachment criteria and attempt to guide PodCo founders and owners to help them make their own assessment of suitability based on the fit predicted by alignment with the criteria. Of course, one need not be perfectly aligned, but we believe a substantial number of the criteria should be aligned before moving forward.
We encourage PodCo owners to complete the first-pass assessment in a self-serve manner, and if still interested at the close of that self-assessment, we will join in a mutual effort to further refine our understanding, explore characteristics where we may not appear aligned, and work through whether overall we all feel we should advance toward the attach stage.
The Attach stage is where we take the steps necessary to have Catalyst and a chosen PodCo be able to work as one, and marks the beginning of what we all expect will be a thrilling growth stage for the PodCo.
By attaching, both parties agree to a game plan for growth as well as the desired exit or detachment goals. We work very hard to ensure everyone understands the terms of the attachment as well as "escape plans" should we determine -- before desired exit goals are achieved -- that it is best that we prematurely detach. We want everyone to feel comfortable and aware of risks and potential downsides sooner rather than later.
Structurally, we look to do the following during Attach:
- Allocate a CEO (or CEO Advisor) from Catalyst to become the PodCo executive decision-maker during the remainder of the relationship.
- Add Catalyst as the deciding vote of the board of PodCo.
- Establish quarterly and annual goals that establish the growth path to which we collectively must adhere. These goals are key to maintaining #1 and #2 above. If there is repeated failure to achieve the goals then it is the right of the PodCo owners to jettison Catalyst from both the executive role and remove them from the board, effectively detaching prematurely.
This is where the fun really starts. The idea is to grow the PodCo according to the plan established in Attach and to do so while maintaining the integrity of Podco and its founders' vision for what they want PodCo to be, including services offered and company culture.
We typically want to move a company to its detachment goals in a three-year span. This can be great fun, though also potentially stressful. Catalyst will hopefully limit the stress for PodCo founders by offering experienced guides to establish practices, systems, and know-how so that PodCo founders can focus on key elements of their businesses -- customers and services offered, the people in the organization, and the culture of the business.
For example, if a PodCo attaches with only two employees and one customer, imagine what our days will be like as we add between 25-75 new employees and 10-20 new customers during the next few years as we proceed through the Grow stage.
As a PodCo nears its exit or detachment goals, we will begin to prepare for the day when we will detach. The two most common detachment goals are either acquisition by a strategic buyer or investment from a private equity firm. Each PodCo owner will be able to determine which exit is best for them and their people, and we will prepare for detachment to support those aims.
Catalyst will provide a broker/dealer to take the PodCo through a "process" that we expect to culminate in the successful detachment of the PodCo fro Catalyst. If you have never been through a process before, it can typically take between six months to a year to complete. Following an exit transaction, depending on the desires of the investor or acquirer and the ProdCo founders, Catalyst is prepared to provide longer-lasting services, tools, or people to aid in the transition to the next chapter of PodCo.
Frequently Asked Questions
What does it mean to "attach?"
If your company "attaches" to Catalyst, it means you have decided you would like to benefit from what Catalyst can offer you and your company. It is a multi-facetted action, expected to last a duration of roughly three years, and includes things such as an established growth schedule, an agreed-upon "detachment" target size, an agreement regarding who will perform what duties during the time of the attachment, how you can detach if you do not feel things are working out as planned, and much more. We do not expect every company or their founders to be comfortable with attaching to Catalyst, and we encourage reading as much of our material as possible, such as the attachment criteria, complete the attachment questionniare, and finally feel free to contact us and request a meeting to discuss further details. We are happy to invest our time to explore possibilities and welcome any and all questions.
What does it cost us and what do I have to give up in order to attach?
We seek roughly 25% of the equity of your company in exchange for our commitment to help you grow it to an agreed upon size, value, and exit. It will cost nothing else up front, and Catalyst will bear the cost of resources needed to get your company to a level where it can sustain roles and services that Catalyst provides (i.e., a CEO or CEO advisor, legal counsel, accounting, operational infrastructure, processes, and tools, and more). As your attached company grows organically, and can incrementally afford more and more services, we continue to offer these services and will adhere to a budget that ensures a) your company stays in the green with both revenue and net income expectations, b) that you and all employees are compensated fairly and can provide generous benefits, and c) that we keep your company primed to be as valuable as possible so that it can be ready for the next level and/or exit as soon as possible while maintianing key elements of your company's culture and vibe.
We are not in DC. Do we have to move to engage with or attach to Catalyst?
Catalyst supports a "remote-first" culture, and does not expect your company to be any place in particular. We actually appreciate pod companies who are also "remote first" and we have encouraged this -- particularly for tech companies -- long before remote work became de rigueur. For companies that have not yet matured to a place where they have grappeled with onsite vs. remote topics, we bring a wealth of experience, processes, and tools to facilitate your company embracing a remote first culture, and we even extend that to customer engagements wherever practical. The reality is that many technical service roles can and should optimally be performed remotely.
Is there a minimum score on the "attachment questionniare" where we cannot even consider attaching to Catalyst?
There is no hard line to a "yes" or "no" to working together and possibly attaching. That being said, we feel rather strongly that the identified attachment criteria represent key ingredients to both our past success as well as the likelihood of success of future pod companies. Our suggestion: Even if your questionnaire results indicate a great divergence from optimal, just reach out and we can explore if there are ways that still might help you achieve your aims.
Do you have any former pod companies that we can talk to to get a sense of the experience?
As you are reading this we are only now launching Catalyst and therefore have no pods that have been through the process. We are currently nurturing a few candidate pod companies and are always interested to meet others to consider in the first wave. As noted elsewhere on the site, we only expect to add one new pod company per year, at least for the first few pods, and expect to have our first official pod company attached and underway by the close of 2021.
Meanwhile, our founder, Rob Daly, has himself launched, built and successfully exited three different technology service companies in his career, and was motivated to launch Catalyst to positively affect as many bootstrapped and organic technology service companies as he can in a more efficient manner than building each out serially.
We have a company that was legally formed outside the United States. Can we attach to Catalyst?
We are sorry, but at this time we are not considering non-US companies as candidates for attachment, but if you'd like to let us know of your intererst, we will be glad to notify you if our rule about non-US companies ever changes.