# Small company referral objection: what to ask | SourceX

Canonical: https://refer.sourcex.si/guides/how-to-handle-we-are-too-small-without-guessing-eligibility
Last updated: 2026-11-05

Neither agree nor argue. Ask which measure the founder is using, because "too small" can mean today's headcount, a government small-business label, a contractor-heavy team or a real gap. SourceX's line is 50 or more full-time employees at the company's peak, contractors excluded. If the peak clears it, the founder was measuring something else and the ordinary route applies. If it does not, only SourceX can say whether a specialist is considered, so the most you can offer is one general question, asked with the CEO's agreement.

Founders say it to be polite, to end the conversation or because they believe it. A VC operating partner who replies "you'd be surprised" is guessing in one direction; one who replies "fair enough" is guessing in the other. Both guesses spend the founder's trust, and neither is yours to make.

## Five things a founder can mean by "small"

| What the founder says | The measure behind it | Why it is not the program's measure | The question that settles it |
|---|---|---|---|
| "We're 35 people now." | Today's headcount | The program counts the highest full-time headcount the company ever reached | "What was full-time headcount at its highest, and in which year?" |
| "We're an SBA small business." | A U.S. federal size standard | SBA assigns standards industry by industry, mostly on average receipts or average employees, so the label says little about a 50-person line | The same peak question |
| "We count as a small enterprise in the EU." | The European Commission's SME definition | It counts staff in annual work units over the latest approved accounting year, with part-time work as fractions, and may fold in group companies | The peak question, plus which legal entity holds the records |
| "Most of our team are contractors." | The whole workforce | Contractors stay out; a staffing firm counts its own full-time staff, not the workers it places with clients | "How many were on your own payroll, full time, at the peak?" |
| "We have never been bigger than about 30." | The real full-time peak | This one is the program's measure | Go to the specialist questions, or stop |

The labels in rows 2 and 3 sound official, which is why they end conversations. An SBA size standard is set per industry code, on receipts or on employees, and says nothing about a full-time peak; SourceX's [note on counting full-time employees](/questions/how-to-count-full-time-employees) shows how far the SBA's research definition sits from the program's test. The Commission's small-enterprise tier, below 50 staff with turnover or a balance sheet of up to 10 million euros, is measured on one recent accounting year. A company that shrank can hold that status today and still have passed 50 full-time employees years ago.

A sixth meaning, "too small for AI companies to bother with", is not about headcount at all. The company would not be negotiating with an AI developer: SourceX licenses data directly from companies and licenses it onward to developers in its own name, so the company's counterparty is SourceX.

## The size line SourceX publishes, and the sentence that leaves room

Section 1 of the program terms says introduced companies "must meet the SourceX sourcing criteria, including 50 or more full-time employees at peak". The Channel Partner Agreement's Schedule A pairs the size test with "sufficient rights to license the proposed data". SourceX's screening page states the same baseline and then adds: "Some programs set higher thresholds, and smaller specialists can still be considered." Its how-it-works page says SourceX weighs "ten fit signals, not just company size".

Read together, they leave two questions that only SourceX can answer. Will it consider this particular smaller specialist? And could introducing one earn a reward? The default terms tie introductions to the 50 baseline, section 8 lets an expressly agreed, signed addendum override provisions, and nothing published says how either applies to a company below the line.

Size is one test among several. Companies in the U.S., Canada and the EU qualify, as do companies in the UK, Australia, New Zealand, India, Singapore, South Africa, Latin America, the UAE and Saudi Arabia when at least 70% of the data is in English. Beyond headcount, SourceX looks for a documented history in the company's own systems, clear ownership of whatever would be licensed and a chief executive who has asked for the conversation.

## The too-small inquiry checklist

Seven questions, in order, asked through whoever already knows the CEO. Every answer is a number, a year, a role or a yes or no. Nobody opens a file.

| # | Question | Answer that moves you on | Answer that routes |
|---|---|---|---|
| 1 | Which legal entity employs the team and holds the records? | One named entity | A group: read the [note on affiliated companies](/questions/can-affiliated-companies-combine-employees-to-qualify) before counting anyone |
| 2 | What was full-time headcount at its highest, and when, according to payroll? | A number and a year | No payroll history: the founder's best estimate, labeled as one |
| 3 | Were contractors, or placed workers at a staffing firm, left out of that figure? | Yes | No: recount on the company's own full-time payroll |
| 4 | Is the peak 50 or more? | Yes: route A | No: continue |
| 5 | Did the company create its records itself, and does it control them? | Yes | Mostly clients' material: route C |
| 6 | Is the work narrow and expert, with several years of records that capture steps and outcomes? | Yes, in a sentence the founder agrees with | No: route C |
| 7 | Has the CEO agreed that SourceX may be asked a general question without the company's name? | Yes: route B | No: route C, or wait |

- **Route A, the standard path.** The founder was using another ruler. The CEO decides whether to take SourceX's short assessment, which starts with a few questions and no files; records, rights and location still have to pass.
- **Route B, one general question to SourceX.** A specialist below the baseline. Send the confirmed facts without the name unless the CEO agrees, and pass SourceX's reply back word for word. The [specialist referral route](/guides/a-smaller-specialist-may-need-a-different-referral-route) covers writing that inquiry, and [spotting a specialist exception](/guides/how-to-spot-a-potential-specialist-exception-without-promising-approval) covers grading the evidence first.
- **Route C, a dated stop.** Record the reason, the date and the event that would reopen it, such as full-time headcount passing 50.

**Method note.** The checklist applies the size rule in the program terms (Version 2026-10-22.2, since replaced by version 2026-11-04) and Schedule A, SourceX's screening and how-it-works pages, the Commission's SME definition and SBA's size-standard guidance, all checked 2026-10-27. Questions 5 to 7 and the three routes are our own discipline, not SourceX's. SourceX has not published criteria for considering smaller specialists or how often it does so, so the checklist cannot predict its answer, and no figures on how founders respond to it have been collected yet.

## Known, conditional and unreviewed for a company that calls itself small

| Status | Statement | Basis |
|---|---|---|
| Known | The size line is 50 or more full-time employees at peak, contractors excluded | Program terms, section 1; SourceX's screening page |
| Known | A staffing firm counts its own full-time employees, not workers placed with clients | SourceX's screening page |
| Known | Government small-business labels use other measures and other periods | SBA; European Commission |
| Conditional | Whether SourceX considers a particular smaller specialist | SourceX, on criteria it has not published |
| Conditional | Whether an introduction below the baseline could earn a reward | Not answered by the default terms |
| Unreviewed | Whether the records match a current program, and whether they can be licensed | SourceX's review |

## Two founders, one sentence (Illustrative)

Illustrative. Both companies are invented; nothing here reports a real case or result.

**A 44-person software company.** Its founder tells the operating partner it is too small. Payroll history shows 73 full-time employees in 2022, before two rounds of layoffs, and nine years of support tickets and implementation projects in the company's own systems. Route A: the founder was counting today's team. The CEO decides whether to take the short assessment, and whether the records fit a program is SourceX's call.

**A 31-person seismic-retrofit engineering firm.** It has never had more than 34 full-time staff. Its own inspection checklists, design-change logs and peer-review sign-offs go back 16 years, and the CEO agrees to an unnamed question. Route B: one general question with confirmed facts only. If SourceX says no, the card closes with the trigger "full-time headcount passes 50".

A third founder, running a 40-person payroll bureau, would stop at question 5: its records are its clients' payroll data, and no size answer survives a rights problem.

## Replies that guess, and replies that ask

| Founder says | A guess one way | A guess the other way | A reply that asks |
|---|---|---|---|
| "We're too small." | "Size doesn't matter." | "Fair enough, never mind." | "Which number are you thinking of? The program looks at your highest full-time headcount, even if that was years ago." |
| "We're an SBA small business." | "Then you're fine." | "Then you're out." | "That label uses a different test. What was your full-time peak?" |
| "We're mostly contractors." | "Count them anyway." | "Then it's hopeless." | "Contractors don't count toward the 50. How many were on your own payroll at the peak?" |
| "We've never been bigger than 30." | "They make exceptions." | "Then forget it." | "Then it's SourceX's call. With your agreement I can ask one general question, without your name." |

## One voluntary step, one clean exit

The voluntary step is the [company fit checker](/tools/company-fit-checker), which SourceX describes as a preliminary, non-binding screen, or SourceX's short assessment from your partner link when route A applies. The exit is just as plain: if the founder does not want to check, or the answer is route C, write down the reason and the date and leave it until the trigger arrives. The [not-now guide](/guides/how-to-handle-not-now-objection) handles a timing objection; this is a measurement objection, and it usually closes faster.

## Where the checklist can fail

- **Payroll history goes missing.** After a change of payroll provider or an acquisition, the founder may only have an estimate. Label it as one.
- **An old peak needs surviving records.** A company that passed 50 a decade ago still needs years of its own records today.
- **Question 2 can sound like doubt.** Present it as the program's rule, not your suspicion.
- **Specialist consideration is unpublished.** SourceX can decline a smaller company without stated criteria, and a reward below the baseline is not settled by the default terms.
- **Labels mislead in both directions.** An SBA or EU status can make a large company sound small and a shrunken one sound ineligible. Only the payroll figure answers the program's question.

## Next step

> **Refer a company. No cap on rewards.** Default reward on a company's first qualifying transaction: the greater of $50,000 plus 5% and 15% of Actual Supplier Payout, with no cap; further qualifying transactions first agreed within 12 months of the first Closing pay 15%. Eligibility and payment conditions apply, including the USD 100,000 Minimum Transaction, and a signed Schedule A or addendum can differ. A lead, meeting or signature alone does not trigger payment.

When the checklist lands on route A, or on route B with the CEO's agreement, [register for your partner link](/register), hold the payroll figure against the size line on [who qualifies](/who-qualifies) and read section 1 of the [program terms](/terms) before anything goes to SourceX. More objection guides for portfolio teams sit in the [guides library](/guides) and on the [venture platform teams page](/for/venture-platform-teams).

Settling a founder's size objection is referral work. Deciding whether SourceX belongs in a fund's own portfolio is a separate decision, and the materials for it are requested via the [SourceX investor overview](https://sourcex.si/investors).

This article is for information only and is not an offer to sell or a solicitation of an offer to buy securities. Any offering by SourceX is made only to verified accredited investors through its offering documents.

## Sources

- https://refer.sourcex.si/terms
- https://refer.sourcex.si/who-qualifies
- https://sourcex.si/documents/partner/SourceX_Channel_Partner_Agreement_Sample.pdf
- https://sourcex.si/how-it-works
- https://single-market-economy.ec.europa.eu/smes/sme-fundamentals/sme-definition_en
- https://www.sba.gov/federal-contracting/contracting-guide/size-standards
- https://sourcex.si/investors