Why Avoid Excessive Dilution and VC Rounds

Steve Reynolds didn't start TripBam to disrupt the global hotel industry—he simply noticed that corporations weren't getting the discounts they negotiated, and no one was checking. After 30 years in travel technology, he saw a broken system hiding in plain sight. What began in 2013 as a consumer hotel re-shopping tool quickly revealed a much bigger enterprise opportunity.

When a corporate client offered to pay a subscription fee, Steve pivoted from B2C to B2B—and never looked back. TripBam went on to serve 250 of the world's largest companies, saving clients 5–10% on existing hotel bookings and up to 30% when switching properties.

TripBam grew to $8–10M in revenue, with 50 employees across the U.S. and Europe, and operated as a Rule-of-60 SaaS business. Then COVID hit, transactions dropped 95% in two weeks, and the company had to prove its resilience before ultimately selling in 2023 to Emburse.

In this episode, Steve shares why pricing for 8x ROI made sales easy, how profitability and subscription revenue protected the business during crisis, what it's like selling into private equity, and why founders should think carefully before raising multiple VC rounds.

Key Takeaways

• Disrupt Carefully – TripBam aligned with corporate buyers while disrupting hotels and agencies.
• Price for Stickiness – Targeting ~8x ROI made approvals simple and customers loyal.
• Profit Is Protection – Strong margins helped survive a 95% revenue collapse during COVID.
• Avoid Over-Dilution – Limited funding preserved founder ownership at exit.
• Deep Expertise Wins – 30 years in travel tech created a defensible moat.

Quote from Steve Reynolds, CEO and Founder of TripBam

"Fortunately for me, since I didn't take additional funding, I wasn't diluted multiple times. I've met so many founders and they go through rounds A, B, C, D, E, F, and next thing you know, they end up with 5%, 10 % of the company. And it just doesn't work.

"You might actually get to a rare big exit, but it's really not going to be all that meaningful for the founders, at the end of the day. I've never kind of fallen into that trap of just getting out in front of your skis. I tend to follow the cashflow and look guys, you know, we got to make it happen on the revenue that we're generating.

"We're not going to go out and bet the farm and borrow a bunch of money and create these crazy expectations, right? Once you start taking outside money, you get someone else starting to make those decisions for you, whether you like them or not."

Links

• Steve Raynolds on LinkedIn
• TripBam (now Emburse) on LinkedIn
• TripBam (now Emburse) website

This podcast is sponsored by Designli, a digital product studio that helps entrepreneurs and startups turn their software ideas into reality. From strategy and design to full-scale development, Designli guides you through every step of building custom web and mobile apps. Learn more at designli.co/practical.

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