For Bill.com, the pandemic has been more of a mixed bag. Companies have continued to sign up for the service, but growth of both customers and transactions has slowed as many small firms have been hit hard. Still, the business Lacerte has so doggedly built now enjoys what Warren Buffett would call a moat—meaning it’s hard for other startups to enter its niche. Getting overwhelmed small business owners to do anything new is tough, and Bill.
The timing was less than ideal, given that he was trying to raise capital in the fall of 2000, just after the dot-com bubble burst. After 79 venture capitalists shooed him away, August Capital’s David Hornik invested almost $8 million. Hornik later led the move to replace Lacerte as PayCycle’s CEO, he says, because nice-guy Lacerte had ceded too much authority to a cofounder and his COO.
After accountants, Lacerte targeted banks. “He’d look at JPMorgan and say, ‘We’re going to have this first meeting, and we’re probably about three to five years away from this having a big impact on our business,’’ recalls Blaisdell. “What entrepreneur has that kind of patience?” In 2016, he struck a partnership with his old employer Intuit to integrate Bill.com into its QuickBooks software. The next year, he finally landed a deal withto have their bankers begin recommending Bill.
When Lacerte ran his first quarterly earnings call in February 2020, the numbers were good, with revenue growing 60% compared with a year earlier. But a bigger narrative was driving the stock’s gains. Wall Street found Lacerte refreshing, says David Chao, the founder of VC firm DCM. Chao calls René a “Steady Eddie . . . He is not a flamboyant person. He is a very thorough thinker. He does not exaggerate. He hits his numbers . . .
Bill.com also sits in a category that investors love: digital payments. Square, Bill.com and PayPal have been among the best-performing stocks since the pandemic started, with their stocks up 150%, 110% and 80%, respectively, compared with a 10% rise for the S&P 500.
Better ipo and cash out at the top here
My favorite type of story. Failure is only an opportunity to Learn.