When Geoff Tarrant co-founded PayApps, he brought something most construction tech founders don’t have: a deep background in investment banking and capital markets. That financial expertise, combined with building a company that Autodesk eventually acquired for around $600 million, makes his fundraising advice particularly valuable for the construction technology space.

His biggest lesson? Most founders are terrible at capitalizing their businesses—not because they can’t raise money, but because they consistently underestimate how much runway they actually need.


TL;DR: Essential Fundraising Wisdom from a $600M Exit

Key insights from PayApps founder Geoff Tarrant:

  • Raise Before You Need It: The biggest mistake founders make is cutting runway too thin—start fundraising earlier than you think
  • Take More Than You Think: A slightly smaller piece of a bigger pie beats a large slice of a smaller one
  • Focus on Unit Economics: Strong gross margins and customer acquisition costs matter more than immediate profitability
  • Build Relationships Early: Start engaging potential acquirers years before any sale process begins
  • Geographic Expansion Timing: Don’t rush international expansion—ensure product-market fit first
  • Strategic vs. Financial Buyers: Private equity and growth funds often pay higher multiples than IPO markets

 

In this episode, Geoff Tarrant from Payapps shares how a $600 million construction tech exit really happens, why Australian startups must expand globally, and the brutal truth about fundraising timing.

 

The Fatal Fundraising Mistake: Cutting It Too Fine

“The biggest mistake I see time and time again founders make is if I just go for another three months or six months, I can get revenue to here,” Tarrant explains. “I think the biggest mistake people make is cutting it too fine, not giving themselves enough runway for the business actually to execute.”

This isn’t just theoretical advice from someone who got lucky. Tarrant watched countless founders make this mistake throughout his journey, and his investment banking background gave him a front-row seat to see how capital constraints kill otherwise promising businesses.

The math is brutally simple: fundraising takes longer than you think, it’s incredibly distracting to the business, and markets can shift while you’re in the middle of a process. If you’re trying to raise money when you have three months of runway left, you’re essentially betting your company’s life on perfect execution during the most stressful period possible.


Raise Before You Need It: The PayApps Philosophy

Tarrant’s approach was counterintuitive for many tech founders: “My advice continually is raise before you need to raise. And ideally, if you’ve got the option, raise a bit more than you think you actually need.”

This flies in the face of the common founder mentality of minimizing dilution at all costs. But Tarrant’s banking background taught him something most founders learn too late: “You’d rather a slightly smaller piece of a bigger pie than a large slice of a smaller one.”

PayApps didn’t raise significant institutional money until 2020—what Tarrant calls their Series A, though it was probably closer to a Series B by today’s standards. Before that, they bootstrapped with high net worth individuals and smaller raises. Looking back, he admits they probably could have moved faster with more aggressive early fundraising.

“I don’t think there’s a rule of thumb” for dilution levels, Tarrant notes, “but I actually think I could have taken a bit more dilution earlier and actually had a higher share price at exit in hindsight.”


The Unit Economics Foundation

One area where Tarrant’s finance background really shows is his focus on unit economics over vanity metrics. While he acknowledges that SaaS companies can grow before becoming profitable, he emphasizes the importance of understanding your path to profitability.

“If you’ve got really strong unit economics, you can afford not to be profitable,” he explains. “The key question is: how long would it actually take me to get back to breakeven if I needed to?”

For construction tech companies, this is particularly important because the sales cycles are longer and the customer acquisition costs can be higher than pure software plays. PayApps maintained consistent 50-70% growth rates through 2018-2021, but Tarrant always kept an eye on the fundamentals underneath that growth.

Strong unit economics in construction tech typically means:

  • High gross margins (80%+ for pure software components)
  • Reasonable customer acquisition costs relative to lifetime value
  • Low churn rates once customers are properly onboarded
  • Clear line of sight to profitability as you scale


Building Relationships for the Long Game

Perhaps the most valuable insight from Tarrant’s experience is how he approached potential acquirers. PayApps didn’t run a traditional sale process—instead, they had built relationships with potential buyers over years.

“I think it’s important to build relationships and engage, ultimately a lot of acquisitions do come out of—the higher value and better ones do come out of having built relationships,” Tarrant shares. “Don’t wait until you decide to run a process. I think by then it’s too late.”

With Autodesk specifically, PayApps had discussions back in 2021 and built a partnership. They engaged regularly, so when the time came for acquisition discussions, both sides already knew each other well. This wasn’t a cold process—it was the natural evolution of an existing relationship.

For construction tech founders, this means:

  • Identify the 5-10 most likely strategic acquirers in your space
  • Find ways to partner, integrate, or collaborate before any sale discussions
  • Attend the same industry events and build genuine relationships
  • Be helpful and valuable to these companies even when you’re not selling


The Timing of Geographic Expansion

One area where PayApps moved perhaps too quickly was international expansion. They entered the UK at around $4-5 million in revenue and the US at less than $10 million.

“I think in hindsight, we were a little bit naive in thinking we could take our product to the UK or US and largely sell it,” Tarrant admits. “There were some key product gaps in the US. There’s some things that like lien waivers in the US that we don’t see elsewhere that was a big part of the claim and payment process.”

The lesson for other construction tech companies: geographic expansion requires much more product development than you expect. Construction processes, regulations, and customer expectations vary significantly between markets. PayApps eventually acquired GCPay to solve their US market challenges, essentially running two separate platforms.

“Make sure you do plenty of work, a couple of trips, make sure you understand” the new market before committing, Tarrant advises. “If you’ve got 12 or 18 months of engineering and product work to be done to get it to product market fit and you’ve already committed to the market, that’s not a good thing.”

 


The Private Markets Advantage

One of the most interesting insights from Tarrant concerns why construction tech companies get acquired rather than going public. In the last decade, there hasn’t been a single construction software IPO in the US.

“I think once you’re looking at a significant liquidity event, if much greater value is being offered elsewhere… Why would you want the extra burden and scrutiny of going and doing an IPO?” he explains.

The math is compelling: growth equity and private equity funds are paying higher multiples than public markets, with less regulatory burden and faster timelines. For a category that’s been relatively late to technology adoption, the growth opportunities and valuations in private markets often exceed what public markets would offer.

This creates an interesting dynamic for construction tech founders: your most likely exit is acquisition by a strategic buyer (like Autodesk, Trimble, or Procore) or a financial buyer who sees consolidation opportunities.


Building Your AI-Proof Sales Strategy

Pulling together Tarrant’s lessons, here’s a framework for construction tech fundraising:

Pre-Seed/Seed Stage: Focus on product-market fit in your home market. Bootstrap as much as possible, but don’t be afraid to take money from angels who understand construction.

Series A: Raise before you need it, and raise more than you think you need. Target 18-24 months of runway, not 12. Start building relationships with potential strategic partners.

Series B and Beyond: Begin thinking about geographic expansion, but only after nailing product-market fit. Consider which strategic acquirers would be most valuable relationships to cultivate.

Throughout: Focus on unit economics, not just growth metrics. Know your path to profitability even if you’re not taking it immediately.


The Bottom Line

Tarrant’s biggest regret isn’t taking too much dilution—it’s not raising enough money soon enough. In a space where customer acquisition is relationship-driven and sales cycles are long, having adequate runway isn’t just about surviving; it’s about being able to invest in the relationships and product development that drive real value.

“As I say, you’d rather a slightly smaller piece of a bigger pie than a large slice of a smaller one,” he concludes. For construction tech founders, that wisdom could be the difference between a successful exit and becoming another cautionary tale about undercapitalized startups.