AlzWell Revenue, Valuation & Funding (2024)

hey folks my guest today is nick offoccio he is the chairman and founder of fibo a health toolbox sas app used globally by chronic condition patients to help make life a little easier after attaining his biochemistry degree he worked in several positions and is the ceo of fomat medical research in addition to his role at fibo nick you're ready to take us to the top let's do it all right so people want to follow along it's fibofebohealth.com uh tell me who's paying for this product how are they using it right now it's entirely um there's no revenue there is we're not looking to make any money on it for about the next two to three years um it's entirely gonna be funded for for growth at this point okay so how are you paying bills have you raised a bunch of capital or what yeah we've been raising uh we've done we just finished our safe round we uh oversubscribed it actually so we're pretty excited about that um how much did you raise it was a hundred and sixty thousand uh safe round one at four million dollar evaluation um and the that was that will take us to a roughly about end of june and then we're looking to raise uh safe round two our projection value at that point will be about eight million we're looking to about a total between the first round which was three percent the second round is about gonna be six percent okay second round is 56 percent of what six percent six percent six percent yeah a total of nine percent so so just when did you write the first line of code for the tool uh this was about two years ago okay so how have you if you just raised 150 grand today how have you funded salaries and things for the past two years so this is a by-product of my company format medical research one that i'm a ceo for and that's been it's a product of it so it's been painted salaries self-funded and self-funded let's say myself cancer so sorry a product so you have an agency and this is a product of the agency correct okay and what does the agency do clinical research we do research for a living okay interesting so in 2020 give me a sense of the size of the agency how much revenue did it do medical research whatever the agency is yeah yeah so you know seven eight figures got it so so i mean what so like eight to ten million something like that somewhere around those figures i mean i don't want to enter into too much of those details if you may if we may so well so so tell me why so eight to ten million dollar agency revenue it's it would be hard for me to get distracted from such a big revenue stream to go build a some sas tool why how are you balancing your priorities so i honestly have a phenomenal team like it just you know top top top-notch team people that see the vision of this company see the vision of the software and um obviously have some skin in the game as well and so i i think i lean heavily on them also i know i don't sleep and um i see this future in the healthcare space needing this chronic condition patient there's a huge need for them so while i was obviously managing this company i i noticed this huge elephant in the room and figured i needed to solve it or at least try to attempt to so how much capital to date has the agency invested into the sas company fibo health uh i don't know i don't have any uh direct number for you i would i would guess somewhere five to seven fifty okay uh 750 000. that's correct and then the the obvious question is you have so much revenue coming from the agency why go raise 150 grand from angels why not just keep funding from the agency and keep the equity right that is a good you know there's multiple reasons um kind of one of the bigger ones if you will when you and i actually wrote about it too we talked about your book recently and i also wrote about this concept there's different models of business depending on what type of business you know brick and mortar you have to solve in certain different ways and technology certain ways and in this particular space it's all about quick growth it's all about you know being in the market immediately and being there quick and for that you need you need to infuse it with a lot of capital um and you need to have top talent you need to have top connections it's a different model of business than the one we do for research which is more structured it's more slow moving which you know that's more much more organic if you will oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of finderpath check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're gonna see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're gonna get a different valuation a vc is gonna pay a different valuation private equity firm is different if you're gonna do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founderpath and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview i understand that but if you have a 10 million dollar agency it would seem weird that you're out spending your time and energy raising 150 000 especially when you've already put 750 grand from the agency into the business it just i'm missing something here i it's a different also by the way another thing is i'm not the sole owner of the um of the agency as you say i'm a shareholder but i'm not a soldier i'm the ceo of it um and you know it's part of it's just part of a package if you will fibo i am the sole owner now obviously i've been diluted by raising but it is a different um it's a different company i see so so nick owns right now about 90 well i mean 98 of fibo and a couple percentage points go to the people that just put 150 grand plus you have the employees that have been have given shares there's a certain amount of stock given for key employees that we've already researched that on the side i see yeah so an employee stock option pool how much did you set aside for your esop pool usually it's like 10 well you're sort of the same correct okay got it so 10 esop pool you know you own 88 percent and maybe these new investors own one or two percent something like that about three percent correct okay got it so got it got it got it okay interesting um let's talk a little bit more about the why behind this right so give me an example why you're building who's using it what are they paying you for what are they or not paying you yet but what are you using it for so imagine a world that where you know one one in three something some some people say one and two uh people suffer chronic conditions in the united states they're like well that's that's crazy because the word chronic condition is defined loosely you know hair loss which i i have if you will that's considered a chronic condition it's not life-changing right but when we're thinking of life-changing bonding conditions think lupus crohn's uh parkinson's alzheimer's those you the medalli current modality is you you see your doctor you get diagnosed you you get on a treatment plan and you then check in with your doctor maybe every four to six months but there's a direct dependency on you and the physician you and the infrastructure you in the system if you will every four to six months what we're trying what we've noticed is depending on the size of the disease there's more or less attention on that particular condition so why depend entirely on the condition on the system so what we want to do is create a system where you depend on yourself so giving you all the tools where you start having agency on yourself and you have to start taking a little bit of control of yourself meeting tools like simple things like for example pill reminder that's an easy one right but then you're entering into things where you can do crowdsourcing so um i think the pill reminder but then if i have a room of 10 000 people with lupus wouldn't you think that i now know okay people with lupus and have these kind of general uh kind of variables are taking this medication it's working here the side effects now why can i have a crowdsourced solution to that where i'm now seeing comparing myself well a person across the state is also taking this medication but they're taking a combination with these other medications so now i go to the doctor and i'm like hey you know 20 percent of the population has taken it with this awesome thing and it's working really well compared to what i'm doing what is what are your thoughts on it so now you've kind of empowered the patient to push it to the doctor and the doctor no i i don't recommend that because isn't it very hard to convince people to tell everyone else what medications they're taking which is critical for you to understand and tell a neighbor that someone across the state is using another medication but you you tell them obviously you try and keep it anonymous but isn't it hard to get people to opt into that so yes 100 so there's a few things we're doing a entirely anonymous entirely encrypted double encrypted you don't need to even put a name to it you don't need to put an email like you don't have to create you can you can have it be entirely fake or you can put a wall like you can put a different picture we don't request any information from you it's entirely anonymous and double encrypted so that's kind of to help that part but also there's multiple ways so you're saying that one of them is the medication which you just said which we're just talking about better yet uh but there's other things like symptom tracker so you put your symptoms right so let's say you have fibromyalgia or um and let's say you woke up with headaches or you're waking up with different bloated or and you start tracking your symptoms if we're comparing patients with crohn's with these symptoms and across the stage the same thing we can now compare variables so it's a lot of crowd sourcing with your own intel being put in i know i'm just saying you have a very very serious chicken and egg problem here i mean i just bought an apple watch and despite the fact that it can give me my ecg my heart rate to my steps my like everything i'm not wearing it right now because i find it annoying and i don't know i still don't know if i want to give apple all of my information i can guarantee apple security is tighter than yours because our dev team is infinitely bigger so i just think i mean how do you get people to sign up for this so again yes you're you're absolutely right and we're right now about 14 000 downloads and growing we just opened up the app store june of 2021 so we're about a year and two months into it um sorry a little bit off of my numbers there uh a year and seven months into it but we're just we just raised we just closed around so we're now officially up until that point has been entirely organic the reason why is that we have multiple tools and each tool like for example i don't use all of them i only use like one of the easiest ones which i think most people can get behind them is our news tool so let's say you have lupus and um japan recently approved a drug for the treatment of lupus that drug is not approved in the united states that that article this is a patent-pending uh patent-pending algorithm is that article is being translated into english and it's getting pushed to you in real time so you get to read it and you tell the doctor about that so you can like an immediate news feed on all things lupus from a validated source and those are easy just like you're following cnn every morning you follow your news feed on whatever condition you have and it gets pushed to you you read whatever you want you don't read whatever you don't want and you can comment on it if you want so that's a generally easy topic to do and that's where we see that that's one of our flagship tools if you will and again there's a crowd sourcing concept to that as well i mean doesn't apple just kill you or any watch just kill you in a year so we i mean not not really so garmin for example garmin reached out to us for a partnership so we they if you have garmin you can integrate it to our app and it pulls that information to like prefab pre-fill some of the information uh in our tool for the for the news for example our steering committee says it's articles they can't find on google yeah sure you can find it on google by the way i'm not saying you can but you'll have to go like page 17 to find it you know it's published by harvard or whatever they those are not going to be high targeted words it's going to be more so like maybe something that google thinks is more important for you to read um while we're i'm just saying nick i am not seeing a clear moat here of something that's so unique to your experience your background that you can accurately and predictably like defend against apple just adding a little thread in the apple watch health app that says oh you told us you have lupus here as the japanese like here's a google alerts little system for lupus i don't see an advantage that you have over everybody else i guess my clearest advantage is we're i mean it's not it's a it's a market focus if you will um apple for them to move the needle they have to focus on a larger audience and um we are not focused on a longer or like you're not my customer i mean i don't know whether or not i'm assuming here but where our customers are the chronic condition patients which are like life-changing diseases we're doing we're doing tools that are very specific to that particular condition yeah for example okay so how do you obviously one day you have to make money on this otherwise you're going to sell your whole company into the season have nothing left right so how do you make money from this so in two to three years we'll start opening it up we're looking to get to a minimum threshold about 100 000 uh users and um at that point how many downloads last month i don't know i don't have that data i do know that we had last week so i can kind of extrapolate if you will about 200 downloads so about 800 if you will probably um we're just as as of yesterday turn on the engine to be paid advertisement so we do expect a pretty large uptick on um on downloads how much do you think you're gonna spend to get one new download we're spending about uh the national average is 280 we're right now at like one 170 something so what's the sample size though to get the 170 number how much of your 150 that you just raised have you already spent to test ads zero uh of the money that we've raised we haven't spent any money yet we've not we're launched as a yesterday to february 1st okay so you don't know what your attack is yet you're guessing but you're going to try and figure that out not that we've been doing it but through fomab if you will we've been spending what fomat is the parent company the agency as you call it i see got it so how much have you spent via foam and driving downwards of the app i would say somewhere around maybe ten ten thousand dollars twenty thousand dollars worth of advertising okay got it is that included in the seven fifty to eight of z is put into the business yep that was correct and you didn't mention the agency on the cap table earlier so how did why the agency put 750k into the app if they don't own any equity they do own equity they do own some equity i i imagine it's a fairly big chunk of equity right if they put in 750k um not it is a percent it's not um substantial but it is as you also remember is i'm also part owner of the agency so it's part of my bonus structure if you will instead of receiving an extra bonus i receive uh more shares of it if you will i i opted out of the bonus to get more shares of fibo i opted out of the bonus get more shares of fibo so you told me earlier right now there's an esop pool of 10 investors on three percent and you own 87 percent that's a hundred percent so i don't know where there's room left for the agency to own anything so i don't own 87 i own 82. the agency owns five percent i see so you basically able to get the agency to commit to 750 grand for five percent of the business that's correct over a period of two and three years i see i see interesting very cool kudos to you for jumping out using agency to learn and launching your own thing where you have way more equity upside i hope you can get it to market and generate revenue and congrats on closing the seed we're out of time though so let's wrap up here with the famous five number one favorite book my favorite book um sure that's a hard that's a hard i'm one that right now is about vr technology and healthcare space number number two is their ceo you're following or studying i would say super cliche bill gates i think he's just innovative in multiple spaces number three what's your favorite online tool for building fibo i think a powerful tool is a sauna from project management perspective number four how many hours you sleep to eat every night five to six five and what's your what's your situation married single kids married two kids happily married that's awesome how old are you 35. last question something you wish you when you were 20. i'm sorry something you wish you knew when you were 20 something that i was wishing when i was 20. something you wish you knew when you were 20. that you know oh that's a group that's a phenomenal question how did reigns are supposed to that yeah how to raise appropriately guys there you have it a launch of an agency consulting directly in the healthcare space doing 8-10 million bucks in revenue he wasn't the sole owner though the agency decided you know i want to spin this out launch a sas app he now owns over 80 percent of the sas app just goes to seed round to start driving growth they have 10 000 14 000 downloads helping patients chronic patients understand updates innovations in their space so they can test new treatments pattern recognize across more other people with the same chronic disease and try and improve their health we'll see what happens next nick thanks for taking us to the top thank you thank you actually for that interview i really appreciate it it was a great time one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 p.m central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter 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