Reveleer Revenue & Funding (2024)

[00:00] Who you're gonna learn from now is someone that understands data, understands growth, understands how to do it in a full control kind of way. Please help me give it up for Jay at Revealer. Jay, come on up. [00:13] Thanks for being here, man. It's been great. It's super it's super good to see you. I remember we caught up recently because they had you back on the podcast, and I I never know how people have grown in terms of revenue. When you said the number, I said, what? Yeah. What's going? This is incredible. [00:27] >> Yeah. Well, we're going we're gonna make a 100 this Well, [00:29] here you go. Stage is yours. Have a lot of fun. [00:31] >> Coach us up. Alright. Well, I'm I'm feeling a little out of place. I definitely don't have the cool pants going. [00:39] >> And hard to hard to beat the this the two sessions before. But I'm I'm excited to be here. I guess I have the socks, so maybe not the pants, but I got socks to be my thing. I'm excited to tell you the story of Revolier. We're we're in an interesting space. Our story is not one that was birthed overnight. We've gone through our challenging times, but now we're in a great place. And and I'm proud of [01:05] >> because we've been really great stewards of capital. We've raised capital from institutional investors. We've never raised a crazy round at some valuation that we couldn't live up to, and it's allowed us to build a phenomenal business. So as as I spend twenty minutes with you today, we're gonna cover three things. A little bit about Revolier. We're in the health care space. It's complicated. It's a bit technical. Give you a little bit of kind of understanding of [01:32] >> what we do and how we're on a path to build a billion dollar company. I'll talk about our superpower. I think everybody has a superpower. When I interview executives, I'm trying to understand what their superpower is and how do they bring that to our company. And I'll share what our company's superpower is and how it's allowing us to succeed in a in a big space and one that many might consider crowded. And I'll share some learnings. [01:59] >> The words here might look like they're simplistic and trite, but I'll hopefully share some learnings that that we've gone through where we've skinned our knee, where we've fallen, and hopefully, you won't do the same. [02:14] >> Yeah. We've had a pretty interesting ride over the last few years. What's important here is over the first six years that I've been running this company, it took us six years to go from 1,000,000 to 25. And we had many moments where we thought we were on that hockey stick and it was all going to be great from there on in. We were feeling that way and coming out of 2019 and all of a sudden COVID [02:40] >> hit. Our first reaction was we're in healthcare. We're in a government sponsored part of healthcare, it's not going to impact us. And next thing, the government shut down a lot of the markets that we were in. So we took a pause, but coming out of '21, things really took off. And so six years from one to 25, one year from 25 to 50 and this year we'll go from 50 to 100. And we're really excited about [03:09] >> that. And we're generating cash and we're generating really strong EBITDA, which is giving us an opportunity to drive this business with some smart and strategic M and A, which I'll talk about. And I think there was we have some things in common with the earlier speaker. So Revolier at glance, we're a health care company. I'm passionate about making healthcare better. And we're in the corner of value based care. And for the audience here, value based care, [03:40] >> simply put, is about getting payers, the insurance companies and providers, health systems, doctors to work together to ensure that a patient, their member gets better. The typical healthcare model is a fee for service model. You go in, you're treated, you leave, and that doctor, that healthcare professional does not really have an incentive to make sure that you stick to a care plan and you get better. So we're in the value based care world. We're using AI [04:07] >> and workflow automation to bring those payers and providers together to better understand what's happening with the patient. And we're taking off. Like I said, we'll do about $100,000,000 this year. We'll probably have an end of year ARR of 105,000,000 to 110 And I think that puts us in a position to do 200,000,000 next year. But what's really important, we had strong gross margin now generating EBITDA and it allowed us to do a debt raise that Nathan [04:38] >> referenced earlier. So we did a $65,000,000 debt raise with a company on the bottom, Hercules Capital. And we're excited to welcome Hercules as a capital partner along with two institutional equity partners, Oak HCFT, which is well known for their work in health care and upfront ventures located in Los Angeles, your typical broad based long term venture investor. [05:04] >> So how do we build a company now approaching a billion dollars of value? One, we had the vision early on. We had a vision to take a tech enabled services market and transform it to software, the typical Marc Andreessen software eating the world. Our marketplace that we're selling into has been served by tech enabled services, armies of people working offshore to digest clinical data, and we're doing it through automation. So we started there, and then we [05:36] >> saw a bigger opportunity to be the platform for value based care. And that's where our M and A strategy aligned with strong product innovation is really driving transformative outcomes. We brought on a transformational capital partner in 2021 and people talk about when you go out and look for an institutional investor, it's more than the money. That's true. When you really need the money, maybe you're not always thinking about what else they bring, but we brought on [06:05] >> OakHCFT. They had a shared vision with me on how we could build this value based care platform and we immediately aligned on what we could do together. And they had been nothing short of amazing. We went from closing our round with them in November '21 to closing our first acquisition in March '22, a company that I built a relationship with over a number of years. And so one thing you'll hear from me on our M and [06:34] >> A, and I have a slide in a few minutes to just talk about how we've done that. Every company that's in our pipeline, we've built relationships with over a long period of time. My head of corporate developments in the back, I think this year alone up until September 1, we've talked to 60 unique companies. We're working on a transaction now with a company that we first brokered a relationship with in early twenty, late twenty one. So [07:02] >> we try to start with a partnership, make sure there's product market fit and if our values and our culture align, we try to make something else happen. But Oak has been a transformational capital partner. Product driven M and A, I think Chili Piper was talking about there's consolidation in healthcare. Why is there consolidation? Because there's concern about PHI risk. All the data that we all sit on and what would happen if a company is breached. There [07:29] >> is a well known breach that took place earlier this year with a company called Change Healthcare, massive $8,000,000,000 revenue company that shut down the healthcare market. And it's really turned off big insurance companies and health systems on dealing with point solutions. They're concerned about the risk. So scale matters. We have a great product team, but we are rounding it out with thoughtful strategic M and A. And with every good story, there's grit. We've had those moments [07:57] >> where we weren't sure we were going to make payroll. We were stuffing some invoices in drawers and we were paying the loudest person that was calling. There was a moment in 2018 [08:09] >> after a successful run at a prior company, I bought kind of the last house I thought I would ever own. In 2018, I put that house up as collateral when we couldn't make payroll and we went for a debt financing just to bridge us. And that's what you do when you believe in the vision. You believe in an opportunity and you have confidence in your team. [08:34] >> So how have we been able to scale this company? So 2019 was our first time that we introduced machine learning into our product. Now everybody's calling it AI. I mean, is machine learning, its rules. We introduced it in 2019 in a way to read a medical record. We now ingest almost a billion pages of medical records annually. Think about that. It's like 3,000 pages a minute. So we introduced that which drove a lot of automation in [09:06] >> our platform, which led to us signing our first national health plan. '21, Oak comes in. First time we have capital on our balance sheet to shift from playing defense to offense, Allowed me to go out in the market, make some new executive hires, upgrade talent. It's interesting to think about the talent that you can attract when you're sub 5,000,000 from five to 10, above 10. And now we just brought on a new Chief Product Officer who [09:31] >> joined our company a week ago and what we can get with a company that's $100,000,000 going to $200,000,000 And then we did the two acquisitions. We did an acquisition beginning in 2022, a company that rounded out a solution set for us and a company in '23 that moved us from payer into the provider space. And we'll talk about how that's expanded our TAM. And so as we've been thinking about this business and as I think about [09:57] >> where we're going, I am always focused on the total addressable market. I do think it gets overinflated. I think that was a comment made earlier. And so we work hard to say in that market, how much can we really sell into? Are there players who will never buy what we have to offer? And we keep thinking about how can we broaden it with new solution offerings that make sense, that are largely the same buyer inside of [10:24] >> the logos that we're selling to. So we started with a $2,000,000,000 market, which seems pretty big. Hard to build a really scaled business on a $2,000,000,000 TAM. 2020, we introduced our second product suite through our product team, and it widened our TAM immensely. And then in 2022, with our first acquisition, it moved us into another product suite, adds another couple billion dollars to our TAM. And then most recently in '23, with our second acquisition, add about [10:54] >> $4,500,000,000 to our TAM. And now we sit with a company that's $100,000,000 and a $20,000,000,000 market with clear line of sight to build a zero five billion dollars business. Our superpower is around how we ingest data. And so at the heart of healthcare, you have massive amounts of clinical data being generated daily. Estimate right now is 1,200,000,000 clinical records being created annually. The problem with that is it's a massive amount of data that your doctor can't [11:27] >> digest. It's hard for them to get ahold of it. It's harder for them to understand that and to be able to use that to their advantage in a twelve to twenty minute visit. And that's what we do. We gather that, we distill it and give them three to five recommendations when a patient comes into their office. And that's our superpower. [11:48] >> All right. So let's talk about strategic M and A. [11:52] >> So as I said, we've been able to grow our company through it. And if you look at our 100,000,000 in revenue for this year, roughly 10% of that is acquired revenue. So we didn't hit, we didn't go from 50 to 100 by making this massive transformational acquisition. We saw our product gap. We knew if we filled it, we could sell a larger solution, solve a bigger problem and get ourselves in opportunities where that door was being [12:18] >> shut on us in the past. I'll And show how that's played out at the end with a couple of metrics. So we've done two. Those two, like I said, had about $10,000,000 in ARR at close. And in twelve months across the two of them, we've been able to double the business, but also fueling our other solutions. And interestingly, on the first one, we were [12:40] >> 5% equity, 75% cash to pay for that, 25% giving them equity. Our second deal, [12:51] >> the equity shifted to being fiftyfifty equity in debt. So we had our debt partner. And now we're working on our third where we'll be 100% funded by debt. And we can do that because we're generating strong cash in our business. And it's given us the ability to control that, manage our cap table, ensure that we're taking care of our investors. [13:16] >> Yes. So, you know, here we are with a couple acquisitions under our belt, company scaling, really leading to some pretty fantastic metrics for the business. Top, I thought I'd just show kind of go to market coverage. Actually, I think for 2025, our go to market coverage will be 65,000,000. So I talk about superpowers. I think one of my superpowers is go to market. How do you scale a business in the marketplace? So I think all the [13:42] >> time about how much quota we have on the street. I'm at an industry conference, I'm always trying to talk to sales reps of competing companies to understand what they're doing, how they're incentivizing their people, do they actually have proper compensation plans? And I'm shocked at how often they don't when someone says, I don't have a commission plan, I'm bonus. I'm like, well, you have a bonus, you're not a sales rep. So we're thoughtful about how we [14:04] >> go to market. It's leading to larger deal sizes. It's amazing that we were doing average deals of under 200 ks in '21, and our average deal today is over 800 ks. Like, we're in a lumpy business. It's b to b enterprise. So we have 70 unique logos, maybe approaching 80 at this point. We're not selling to tens of thousands of endpoints. So when you get one of those, you try to have a big impact and you've [14:31] >> got to make sure you focus on retention. And you can see net retention in lower left. And I'll talk about some of our learnings on that front. And on historical headcount, I just want to show we're a growth company driven by product innovation. And you can see how the headcount is jumping. Our R and D team product, AI engineering jumping significantly from '21 to '24, and our go to market team making big strides. In 2122, we [15:00] >> had two reps. The problem with two reps is you never want to let go one who's underperforming because then you're down to one and you're kind of held hostage. And now we have a large sales team broken out by payer providers, strategic reps, field reps, folks focusing on our installed base. And it gives us an opportunity to continue to upgrade and strengthen the team. [15:25] >> All right. So what are some of my critical learnings over the last eight years? And talent. Everybody talks about talent. Talent's important. I used to interview every single person we hired. Can't do that any longer. I'm fascinated by those leaders who say they do it at sizes companies much bigger than ours. I don't know how they do that. I'm impressed by it. I do interview every VP. From our executive team, here's an interesting metric. I'm proud [15:52] >> of it at times, but I also question my own skill. The average tenure of an executive on my team right now is one point seven five years if you take me out. You put me in there, you know, being here eight years, it kind of blows the number, but 1.75. And the point of sharing that is we've steadily upgraded the talent as we've summited a new mountain and we're looking at the next. And that might sound [16:17] >> harsh, but it's really important and it's critical if you want to build a large and sustainable business. You know, I heard an interesting quote. I'm I'm a sports guy. I played hockey. I have two boys who play baseball. And so now I'm like in the baseball world, and I heard a baseball coach recently say to a player, this is a college coach, my job is to figure out every day how to replace you. Your job is [16:41] >> to figure out how I can't. And I think you have to think that way with talent. Scale. Scale matters, particularly in vertical SaaS. That's the world we're in. Scale matters. Point solutions aren't going to survive. And so we are moving aggressively down this inorganic, inorganic path. And so if you're in vertical SaaS, I would think hard about how you scale. We've done a lot on the innovation front and we did it when we didn't have capital [17:08] >> because we found partners who believed in us and we innovated with them. We had one partner very early on that leaned into us when we were talking to big companies that we just didn't think they would pay attention and help us at time of need. Then we ultimately bought the IP back from them as we got more scaled. So I believe in partners. I believe in partners, but I believe you also need to know what is [17:29] >> critical IP for you and to make sure that you get that back if it's not in your house today. Lastly, on customer retention, and it's a humbling one for me to share because, I was one of the preeminent, folks around customer success before it was its own function. And as I look back on my time leading this company, we have had a couple of moments where we've stumbled on the customer success side. And when you do [17:56] >> that in vertical SaaS and B2B with large deals, can be hugely disruptive. We had a lighthouse customer that got noisy. We thought they were being overly demanding. We started to push price higher. And then on July 3, right before July 4, they sent a notice of nonrenewal, and it almost led to 30% of our company being laid off coming out of the July 4 holiday. We launched a project to figure out how to grow through that [18:22] >> and we successfully signed a company that was four times larger within about sixty days, But it was a great lesson to not get, if you have that kind of lumpiness in your company, you need to be really smart about how you deal with those enterprise customers. And so we're leaning in really hard on our customer success team now to ensure that that doesn't happen again. [18:45] >> Alright. So I think I'm at the end of our time. Hopefully, I've done a good job of giving you, insight into how we're building a billion dollar business. I think we're really on the cusp of achieving that for our investors. It hasn't been easy. It comes through a couple of superpowers, how we deal with product innovation with our AI and machine learning, how we're using thoughtful M and A and how our capital and equity and debt [19:11] >> partners are fueling our growth. And hopefully you won't go through some of the you won't skin your knee the way I have over the last eight years. Thanks for listening. Enjoy the rest of the day.

[00:00] Guys, reveleer launched back in 2013. Are selling specifically to insurance businesses and then also doctors and folks on the front lines to say, hey, listen, when that doctor is seeing a patient, focus on the chronic heart issue, which Jay knows he can surface because of health records that he sits on using a little bit of machine learning AI room to do there, but he scaled nicely. Broke $51,000,000 of revenue last year with about 10% EBITDA margin. [00:23] The year before that, about 25,000,000. So doubled over the past eighteen months. Hoping to break a 100,000,000 this year. That's the stretch goal. We're rooting for them, funding the business in a very capital efficient way, keeping the equity new deal done with Hercules. I can't talk about Jay's specific deal, but Hercules public filings, they're usually targeting a 15.5 all in weighted yield and 11% headline rates. Sounds like they got a good deal done here as Jay [00:45] is gonna hopefully use that money to go fund future acquisitions as they look to continue to expand ACV, which they've done over the past three years, expanding ACV almost three x to 9 to $900,000 in annual revenue per average employee. Hey, folks. If we haven't met yet, my name is Nathan Latka. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall [01:09] Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and one went on to create founderpath.com. I raised a large fund to do non dilutive deals with b to b software founders. So far, we've invested in over 400 software founders totaling a $150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go [01:38] sign up at founderpath.com for free to get your offer. Alright. Let's jump into the interview. Hey, folks. My guest today is Jay Ackerman. He's an enterprise software executive responsible for setting the vision, strategy, and objectives for a reveleer. As a leader, he's also keenly focused on shaping and stewarding the culture at the company to attract a robust collaborative team while driving an innovative mandate to accelerate value based care mission. To make this really specific, reveleer is [02:04] a data and analytics platform for healthcare. So super specific. We're gonna jump into it today. Jay, you ready to take us to the top? [02:10] >> Yeah. Can't wait, Nathan. Let's go. [02:12] We were just chatting preshow. Our first chat was all the way back five years ago in 2019. You said you re listened to the episode last night. Do you get most of the predictions right? [02:22] >> More right than not. Yes. Yeah. What was the biggest thing? I mentioned to you, the one we didn't get right is we thought we would end 2019 with a business that was generating positive cash, and we didn't hit that point until 2023, but we're there now and really excited about how the business is performing. [02:43] So just to be clear, last year in 2023, you guys ended up EBITDA positive, cash flow positive at the end of the year. [02:49] >> We did. [02:50] Yeah. That's incredible. Congratulations. Now I have a bunch of questions in term you're doing a very a lot of very unique things. You've raised a large round from Hercules in a down market. You have successfully executed that I know of two acquisitions. A lot of founders love the idea of inorganic growth [03:08] via acquisitions, but then they fail with the integrations. I think you've done a really nice job. I wanna dig into that. But you've also have a really efficient capital structure, I think. But before we dig into any of that, let's talk about what we love, which is your customers. What are they buying from you? What are you selling? [03:21] >> Yeah, and one of there's been one major change in our customer segment since we talked in 2019. So we're selling a data and analytics platform to payers, insurance companies, and risk bearing providers, think health systems, hospitals, doctors who take risk to support value based care. And so those are our two market segments, and they're buying a software platform that helps them understand their patient's health and how well they are performing and delivering high quality care to [03:53] >> them. [03:55] And so help me, just to be clear, and you're selling directly to the insurance companies for the data, and then you're selling something to the doctors and hospitals, the first, the front row folks, is that right? [04:02] >> Yeah. Yeah, so think a doctor who's going to see a Medicare patient, when that patient walks into their office, they can pull up in their EMR [04:16] >> a result file from us that's gonna say, Hey, Nathan's here, and we want you to focus on these three specific medical conditions that our AI has identified from a wide set of data that we've captured, that these things might be going on with them. So it allows the doctor in that fourteen to sixteen minute visit to be more efficient, to potentially capture a condition that they may have missed, and ultimately leading to better care for the [04:43] >> patient. So yeah, that's a new offering for us. [04:46] I mean, Jay, I go to my primary care doctor once a year, and they don't remember the stuff I told them twelve months ago. How do you sit on enough data to be able to tell the doctor, focus on these three things about Nathan, because we learned about these four years ago from this other dataset we sit on? [05:01] >> Yeah. Well, so the thing that you know, and you've probably experienced this, [05:06] >> something pops up for you and you'll go to an urgent care setting. You might have a prescription filled from CVS, you might have it fulfilled from a local small pharmacy. You may then go see a doctor out of network and you have a lab done. And so that data is not consolidated in an easy format. We're able to sweep, we identify like a geography based upon where you are, how many miles we're gonna sweep, all the [05:33] >> care settings that exist, pull that data in, we're really successful. We can capture incremental data on 90% of the patients that kind of run through our platform. But the challenge is when you get all that data, you better be really good at mining it, because you can have thousands of pages of data. And so we take that thousands of pages of data and we synthesize it down to the top two or three things. And if a [05:58] >> doctor is curious and doesn't understand what we're suggesting, they can click in and go exactly to the precise spot in one of those records where we're drawing that conclusion. [06:09] Okay, so let's just use me as an example real quick. So like, I'm making this up, right? But let's say the example, last year I had strep throat. I went to urgent care. I didn't go to my PCP because she was too slow, right? They were too slow to I see went to urgent care. It's only four miles from the PCP. It's 12 miles away. What public data set are you able to use to know that [06:26] I purchased cough drops or nasal spray at CVS because the urgent care prescribed something? [06:34] >> Yeah. Well, we're connected into a couple of the major lab systems, pharmacy data companies. So when we put your name and we can pull what data they have on your prescriptions that have been fulfilled. [06:49] What are those big ones? Can you name the top three? [06:53] >> You know, there's you'll see a lot tied to diabetes. Like, you know, in our our target segment in health care, patients and Medicaid patients, those are our two biggest segments. So Medicare, you're gonna see people with diabetes, chronic heart condition, kidney disease. And so that, those are examples of the, let's call it, top conditions that stand out, obesity, morbid obesity. [07:22] So you'll scrape data sets related to those things, not like strep throat from a guy like Nathan at the CVS? [07:29] >> No. No. I see. I see. Yeah. More chronic, you know, things that are gonna carry, you know, kind of year to year. [07:37] Okay. I think our audience now clearly understands sort of what you're providing customers. That was extremely helpful. Help me understand how how you've priced this. So what does an insurance company pay you and what would the doctor or the hospital pay you? [07:48] >> Yeah, so our pricing model has shifted from our last discussion predominantly to a per member per month model. So that health plan, that provider, they'll pay us a set dollar amount for every number, every one of the patients in their care, and, you know, we bill we bill them portably on that. And they run their businesses under those models. So that's a well understood model and running a health plan. It's a well understood model and running [08:19] >> a large health system. [08:20] Yep. Yep. Okay. So yeah, that makes sense. And then when you're selling to an insurance company, what does that package look like? [08:27] >> Same thing. It's a per member per month. [08:30] Ah, okay. Okay. So both. So it's two different segments, but it's the same sort of pricing model per member per month quarterly. [08:36] >> Yeah. [08:37] Okay. And what what did you I forget. Pardon me. Where what did you switch from? What were you were you doing? [08:42] >> We were predominantly in a, like, sort of like a cell phone cellular plan model where you would pre purchase units on our platform. So you would pre purchase, if you had, if a health plan had 100,000 members that they were caring for, they would pre purchase, they might look at 25,000 of their patients, so they would pre purchase the units, and if they went over that, would bill them incremental overages. [09:12] I see, I see. [09:13] >> And it's harder for them to model that, it's harder for them to manage kind of those overages that, you know, would often show up. [09:21] Yep. And I remember back in 2019, you told me that you were serving at that point about 30. I don't know what were they, if the concentration was insurance companies or doctors or hospitals, but it was 30 of that group combined. Where are you, and can you give an update on that number today? [09:34] >> Yeah, sure. So we're approximately 80, Yeah, 80 customers from 30. And our average contract values continued to grow to where we're approaching 900,000 annual contract value per customer. [09:54] We have to dive into this. So guys, do not stop listening to this, and I'll tell you why. Jay's ACV back in 2019 was about 274,000. So he's more than he's not only tripled, he almost tripled his customer base from 30 to 80. He's also tripled his ACV. So I wanna dive deeper here now, Jay, how on you've done that. Was it was it inside product development with your engineering team, or do these two acquisitions that [10:17] I read about come into play here? [10:19] >> Yeah. Both. So, yes, we continue to build product internally. We've had some phenomenal innovations using AI in our product. But both acquisitions, Dynamic Healthcare, which we acquired in beginning of early 'twenty two, and MDPortals, we acquired in 'twenty three, are allowing us to sell a more complete solution and are giving us an opportunity to go back and expand our footprint, you know, as we've proven ourselves inside of the customer segments that we've been talking about. [10:49] One of the traps founders fall into is they go say, Yeah, if I just have more money, I could go buy these three companies. And they put together a beautiful Excel model, and they say, yeah, once the acquisition's done, we're gonna cross sell and ARPU's gonna expand, and the teams are gonna have no cultural issues at all, and the tech stacks are gonna match. It's gonna be perfect. How do you model an M and A process [11:05] before doing it to try and derisk the operational integration that has to happen afterwards? [11:10] >> Yeah. Yeah. It's simple, right? Like the 80% of acquisitions fail. [11:15] That's true. [11:16] >> Yeah. I mean, a couple of things for us. Our acquisition strategy is centered around identifying product that rounds out the solutions that we're offering today. So when we do that, we're effectively expanding what we can offer to the same buyer. So we're not asking our sales team to go learn kind of the buying pattern of a new executive inside of a health system that has nothing to do with the people that we're currently talking with. So [11:45] >> that's kind of number one. We did, in our first acquisition, acquired a more dated tech stack, and we took traditional kind of data center hosted tech stack, we've migrated it to AWS, and [12:01] Which company was that? Dynamic Healthcare? [12:04] >> So we moved it into AWS, we've modernized the tech stack, now the same single brand, so the experience for the customer is they're seeing one company, the data flows across both applications. [12:20] >> Culture culture is a bit is important. Dynamic was a slower moving company when we acquired it. [12:26] They had 38, about thirty, thirty eight on the team when you bought it? [12:31] >> Yeah. Probably actually a little smaller than that. And And we, in the first twelve months of owning them, we sold more new business than they had sold in the prior five years. And the reason I call that out is because all of a sudden we were asking everybody to run a lot faster, to move a lot quicker, and how we were standing up new customers, operationalizing it. And for some, weren't, you know, they weren't used to [12:56] >> that. Some didn't really wanna do that. We had some people who self selected out, who didn't wanna move at that pace. We're really excited about the way the team has contributed and some of the talent that has risen up. But yeah, that wasn't for everybody. MDPortals, the second acquisition, much more culturally aligned in the way we operate and the way we move. In fact, they probably have challenged us to move a little faster. [13:21] How many people on their team when you bought them? [13:24] >> Yeah. I mean, there was a smaller team. It was a team of [13:28] >> sub 15. [13:29] Okay. Okay. So I mean, both these companies, it looks like we're bootstrapped in under $3 to $4,000,000 in revenue when you bought them. Is that a fair statement? [13:37] >> Fair for acquisition number two. Acquisition one was a cash generating business of about $7 to $8,000,000 of ARR. Like it was Oh, wow. It been a business for a long time. [13:51] That's impressive though, because if they were under 30 FTEs when you bought them at '28, generating 7 to $8,000,000 of revenue, that's a cash machine. I mean, the revenue per employees through the roof, that's like record numbers, but they were bootstrapped. Right? [14:03] >> Friends and family backed. Yeah. [14:05] You weren't dealing though in your negotiation with some VC that said, Jay, I want a 100 x return. It's a billion dollars for the M and A deal or bust. [14:11] >> No. No. [14:13] Yeah. Interesting. And by [14:14] >> way, Ben, on the acquisition front, both of them were companies we had established partnerships with. So Mhmm. We we understood one another. We knew how our products were gonna together, we were already out selling them in the market, and it made a lot of sense to just go quicker and move to acquisition. [14:30] Yeah, this makes a lot of sense. [14:33] How did you make sure, I mean, do you have a history at other companies of doing M and A? How did you make sure to get that first one right? Are there any sort of pieces of advice you give our audience, consultants you use, things like that? [14:43] >> I I have done M and A in the past. I wouldn't say I mean, I've done I was a seller, I sold a business, I was a part of buying two, three other companies in the past. So a number of experiences, but not, you know, not double digits. But I think what's most important is the product. You gotta have product fit. You can't do it for financial engineering purposes. If you go down that path, yeah, your [15:12] >> numbers might look nice for a little while, but it's gonna break down. [15:16] >> So, and we had to have the resources internally that could support the integration work. So the one thing we did, we brought a consulting firm in to work with our team to build the playbook with Dynamic that we could use in acquisition too, and then whatever comes in the future, expect to do more acquisitions, which is why we did that raise with Hercules that you noted. Yeah. But we built a playbook to manage Who [15:44] did you can I ask, Jay, who you used? Which consultant? [15:47] >> Yeah. Use we use a consulting firm. I think they're headquartered in Tennessee called Ankura. [15:54] Ankura. They specifically helped you build sort of, hey, after you buy the company, do this on day one, do this on day two, do this on day three, that kind of thing? [16:03] >> Yeah. And build the tooling so that we could then manage a broad set of work streams. You know, we would have the sales, you know, marketing integration work stream, right? We had the back office work stream on how we were integrating. Like day one, finance and HR were integrated. Sales and marketing was the next stream to integrate. Then we had kind of a slower roll around product and technology. So they helped us kind of align that, [16:31] >> create the playbooks that we could execute, create the methodology in which we would manage a steering committee and track the synergies that we were expecting, whether it's cost synergies or revenue synergies. [16:43] Yeah. And this is just to be clear, I wanna make sure I give the right resource to my audience. It's ankura.com, Ankura. [16:50] >> Yeah. Yeah. You got it right Okay. [16:52] Yeah. Interesting. That makes a lot of sense. Okay. So those were the two m and a deals. Look, I'm obviously running the numbers in my head trying to guess your revenue. You also seem to be pretty transparent. Are you comfortable sharing where you guys were at last year where you finished at? [17:04] >> Yeah. Sure. Yeah. And I think I've shared them in some other settings. So in 2022, [17:12] >> we were 25,000,000 of revenue. 2023, we were 51, almost 52. So we doubled from '22 to '23. [17:23] Wow. And [17:24] >> if our team executes well, we'll deliver like numbers in '24. [17:29] You think you can double again this year? You can break a 100,000,000 this year in run rate by December? [17:33] >> It's our our target. Yeah. Yeah. [17:35] It's a good It's [17:36] >> not it's not it's not our board it's not our board plan. It's not our board plan, But Yeah. [17:39] Hopefully, board plan is 30% under that. Right? [17:42] >> Yeah. There's there's there's some cushion. There's some cushion. Talk to [17:46] me about Hercules because when most people think about Hercules, they think about debt. Was the 65,000,000 pure equity? [17:52] >> No, actually it was debt. [17:53] It was all debt. [17:54] >> It was all debt. Now that our business is generating cash, and we have really good understanding of the unit economics of our business, We wanted to raise a debt facility to support M and A. And so Hercules is, we actually had great deal of interest from a number of parties to back [18:18] >> this vision that we have for building a broad based, value based care platform and operating system for value based care. And so that 65,000,000 is effectively aligned based on ARR at really attractive curves. [18:34] Yeah. No. This makes a lot of sense. I mean, so so one of the things that I like to do at the end of every quarter is I go study all the 10 q's and and and 10 k's from the publicly traded BDCs. Thankfully, Hercules is one of those, we can see all their deals. For example, they gave Sisense a $34,300,000 loan at 11% headline interest rate. Now, obviously, Sisense has raised $270,000,000 of equity with estimated [18:55] revenues about your same size, 72,000,000. They also gave a couple other lines to others, but this this deal will eventually show in their 10 q. I'm wondering if you're able to share with us, like, the high level rate you got on that facility. [19:06] >> Well, you know, I'm I I can't I can't disclose the actual rate, but let's call it it's in the range of what you just called out. [19:14] Okay. Yeah. One of the things one of the hits that Hercules gets maybe you can defend them here if your experience has been great, is they charge pretty substantial exit fees. They specifically charge scisense. I wanna make sure I get this right. Right? A a 2.55% exit fee on one deal, and then a three and then point 45% exit fee on their deal they did with Suzy, another SaaS company. How did you think about exit fees, [19:35] and was that a big deal? Was that a big deal negotiation point for you? [19:38] >> It certainly was a big deal because we were thinking about what our next financing step is, and when another investor might enter. And if another investor entered in the near term horizon, would we pay that down, and what might that rate look like on a blended basis? So first off, like what was most important to us is the total interest expense that we're going to pay with front end fees, back end fees, carrying fees, and straight [20:09] >> borrowing costs. That's number one. Yes, we were focused on the exit fee, and we were able to lock in at a rate that we felt comfortable with. [20:20] Across [20:22] >> the total borrowing, very healthy for the environment that we're in. [20:27] According to Hercules last 10 Q, which would have been the twenty twenty three Q3 number, they had approximately 3,300,000,000 of AUM, of which 25.4% of that exposure was to B2B SaaS, representing about $840,000,000 of exposure. This is a significant position for them. This deal they just did with you, in a sense, sort of own the bank. That must feel pretty good. They also say, he's smiling. They also say that their target weighted average yield is about [20:52] 15.5%. So to your point, if you're looking at a headline rate of eleven, twelve percent, they're gonna get their fees somewhere around that 15 over time. Did you sort of see that when you ran the all in cost of capital, you're sort of in that same range? [21:06] >> Our our all in is, I think, in the lower end of the range. [21:11] Yeah. You're a better risk company than most in their portfolios. You're saying that in a nice way. [21:17] >> Yeah. Look, I mean, if you peel the top off and look into our economics, like we are running a good business. We've been efficient stewards of capital that shows up. I think our risk profile is really interesting, and not there are not a lot of companies right now that are growing, doubling, increasing And so doing both of them puts us in a position where we can, you know, ask for more favorable terms. [21:44] I can totally agree with you. Absolutely. When you do 51,000,000 last year, what was your EBITDA margin? Are you talking like 10% or barely profitable? [21:52] >> We were just below 10. [21:54] I mean, that that's that's ama did you knew you know you were gonna go to market with a debt deal, so you wanna make sure you could tell that that profitability story there? [22:01] >> You know, actually, the debt no. Actually, that wasn't the plan. We I would say q three, kind of felt really good about the way we were running the business, and we went to our board and our two primary financial sponsors, Upfront Ventures and Oak HC/FT, and said, 'Hey, we'd like to raise a debt round to support move in a little faster on the M and A front, and they got behind it. So it wasn't it wasn't [22:29] >> part of the plan at the beginning of the year. [22:31] Yep. Were you refinancing out any other debt, or is this your first debt exposure at the company? [22:35] >> We had we had, like, sub $2,000,000 of debt. That's a good question. [22:40] Nothing. Yeah. [22:41] >> Yeah. [22:41] So how does it feel? I mean, lot of founders, they read about VC in the paper and the billion dollar deals. And I'm like, folks never calculate the cost of getting up all that equity. It's like, man, if you can use debt and keep it, you're gonna it's gonna be way better. But I'm biased. I run a fund that does this. Let them hear it from you. [22:56] >> Yeah. Look, I'm I'm a shareholder. I've I was really excited to bring Oak in in 2021. They've been a transformative partner, but they stepped in with a big equity position. All of sudden, I took a look. I'm like, Wow, my you know, my state's gone down quite a bit. And, yeah, look, I mean, as you build, you want to make sure that [23:21] >> You you can think about both. The equity, you know, equity is expensive, but it allows you to sleep better at night. And so you've been on the debt road, you've got to make sure you understand it. And yeah, we feel great about what we're building, how we're trying to use equity and debt. [23:37] >> And yeah, we're excited to go from, you know, we're looking at the next kind of milestone of 200, 200 plus million. [23:43] Well, we're rooting for you. I apologize. I got so into this. I lost track of time. I wanna be respectful of your your end So time let's wrap up with the famous five j. Number one, your favorite business book. [23:52] >> Well, I'll I'll use it. I'm not gonna say favorite book, but I'm gonna share a book that I recently read called Breathe. Yeah. Which is great read about [24:03] Brene Brown. Right? [24:04] >> Yeah. No. No. Breathe. Not not Brene Brown, but the book Breathe, which is really about the art of how you breathe. So it's a worth it's a worthwhile read. Oh, James Nestor. Yeah. It's great. It's fantastic. [24:18] Yellow cover. [24:20] >> Yep. [24:20] Okay. Very good. Number yeah. Go ahead. Do you have another one? [24:24] >> No. No. Go. [24:25] >> I'm ready. [24:26] He's he's got his things prepared. I love it. [24:27] >> Number two is No. [24:28] >> I see. Yeah. Good. [24:29] Is there a CEO you're following or studying? [24:33] >> Yeah. Look, I yes. I'm focused heavily right now on ServiceNow. Mhmm. And I think what they're doing is fantastic. And you also look at how [24:44] >> AI has played a part there. And when Bill McDermott left SAP to go to ServiceNow, I kind of shook my head and I said, didn't get the move. And I love paying attention to what they're doing and how he's leading that company. [24:57] >> Mhmm. [24:58] Number three, what's your favorite online tool for building the business? [25:02] >> Favorite online tool? I gotta tell you, I'm pretty obsessed with ChatGPT as my, like, go to app on my phone right now. So it's helping me be a more efficient CEO. [25:13] Yep. Everyone says they're using AI now in their stuff. You are sitting on a lot of data, so I do believe you do have some sophisticated stuff on the back end. But do you feel like, like, if you're if if a 100% is you're using AI to its full potential at the company already, it's fully installed, it's cranking, like, percentage what do you think you're on the way there? [25:30] >> Oh, I think we're as proud as I am of what we're doing, I think we're 30% of the way there, 25% of the way there. Yeah. It's a long way to go. [25:40] >> Yep. [25:40] Number [25:41] >> four, It how many seems of like it keeps me up at night because I think there are small companies who can get birthed overnight and very quickly make claims that they can do things that we're doing or things beyond what we're doing. [25:52] The nice thing about what you built though is I imagine the big part of the moat that you sit on is getting access just to the data to train these systems is difficult. You already, because your size, have access to unique and proprietary data sets in the space for Medicare, Medicaid, diabetes, chronic heart, etc. A startup wouldn't be able to necessarily tap that as easily as you. [26:08] >> It's harder to tap that. And the other moat we have is it is very difficult to win business with health systems and insurers. And so to have 70 of them under contract, that gives us a pretty wide mode. [26:20] Yeah. Yeah. All right. Number four, how many hours of sleep do you get every night? [26:24] >> Six and a half, not a lot. [26:25] Situation, married, single, kids? [26:29] >> Married, two boys, 14 and 20. [26:32] Oh, busy guy. And how old are you? [26:35] >> 56. [26:36] 56 years young. Take us back last question. Something you wish knew when you wish you knew when you were 20. [26:42] >> What do I wish I knew when I was 20? [26:46] >> I think what I wish I knew when I was 20, the value of being in a company with great talent that'll push you to be better at what you do. [26:56] Guys, reveleer launched back in 2013. Are selling specifically to insurance businesses and then also doctors and folks on the front lines to say, Hey, listen, when that doctor's seeing a patient, focus on the chronic heart issue, which Jay knows he can surface because of health records that he sits on using a little bit of machine learning AI room to do there, but he scaled nicely. Broke $51,000,000 of revenue last year with about 10% EBITDA margin. The [27:19] year before that, about 25,000,000. So doubled over the past eighteen months. Hoping to break a 100,000,000 this year. That's the stretch goal. We're rooting for them. Funding the business in a very capital efficient way, keeping equity. A new deal done with Hercules. I can't talk about Jay's specific deal, but Hercules public filings, they're usually targeting a 15.5% all in weighted yield and 11% headline rates. Sounds like they got a good deal done here as Jay is [27:41] gonna hopefully use that money to go fund future acquisitions as they look to continue to expand ACV, which they've done over the past three years, expanding ACV almost three x to 9 to $900,000 in annual revenue per average employee per per average customer. Jay, thanks for taking us to the top.

you're gonna love this interview just got done editing it i'm glad i got it live for you i'll be in the comments for the next 30 minutes hanging out answering any questions you have in fact leave a comment below about data points or what you think is going to happen to the company and i will respond to every comment additionally if you're just loving the content click the thumbs up and i will go and check out your profile as well and give your videos some love as well in the meantime enjoy the interview hello everyone my guest today is jay ackerman he's the ceo and president of a company called a revolution in his role he's responsible for fostering product innovation accelerating business growth and scaling operations to propel the company's impact for health plans they're a sas platform focused on value-based care all right jay you ready to take it to the top yeah for sure nathan let's do it so what does that mean what's value-based care yeah so um as you've probably been hearing a lot in the news there's been a shift from from feep uh uh you know uh fee for service you know with a health plan you go in and see a doctor they'll charge you a fee whether or not they actually take care of your ailment and so the government's been pushing for value-based care trying to ensure that providers doctors hospitals and the health plans are working to ensure that members get healthy and stay healthy and so we play a part in uh in supporting that okay so and so what does the platform look like and who's buying it's the hospital the patient too yeah perfect so uh we have a cloud application that's uh used by government sponsored health plans so that would be health plans that are participating in medicare medicaid aca or kind of affectionately known as obamacare and they use our platform to engage with providers doctor offices health systems and hospitals to capture critical information on members to make sure that they can demonstrate to the government that they are doing their part to ensure that their members receive proper care stay healthy and they insure a balanced set of members so jay who who is they though is it is it literally the hospital down the street here or is it somebody else oh well so our our customers specifically it's a health pla health plan so national health plans like uh anthem uh united are are people that we target our customers down to uh regional health plans and local local plans that might be in your city or your local market got it that's helpful okay good so they're paying you and how do you set up like what are you price based off number of patients you know quality care seats yeah so perfect we um we have a couple of different pricing arrangements some are what i would consider kind of typical enterprise agreements where they can use it um as much as they want as broadly as they want but our typical pricing model is based on what we call a chase which is affectionately effectively the um the particular member that they're trying to capture information on so we will know up front how many members they're trying to capture information for over a given year over a given year and then we set pricing around that so we have kind of a per unit uh pricing model what does that mean though so anthem comes to you you close and they say hey listen jay we want to capture information on 10 000 members members of what and how do they get the information yeah so they'll say hey we um in the area of risk adjustment we want to go out and capture records on 50 000 members that sit across five states not what are members though like that's not interesting sorry member like you consider that member would be uh a patient right it would be somebody who is insured by that health plan okay someone insured by anthem yes why don't they already have all the data on that person they're already a customer of anthem well so um i mean you hear a lot about this like the interoperability within healthcare and systems that don't speak so doctor offices uh hospitals they have lots of information sitting on each of the individuals that walk into their building to receive care and that information is not shared very well back to the health plan okay got it so they are anthem is using your technology to get more information on their own patients uh yes on the members that they insure yeah which would yeah they don't they don't think of them as their patients right they think of them as insured members yeah okay very good that's helpful understand and then so help me understand on average what what is no obviously don't talk about anthem's actual contract but on average what are these companies going to pay you per year to use the tech yeah so today we have about 30 customers um and on average we earn about 375 thousand dollars per plan that we cover and services revenue and about 275 000 in sas revenue so we have both the services model and the sas model okay so so uh one of these 30 customers like anthem would pay you on the sas side about 225 000 per year on average to use the tech yeah and that number for us has uh i've been going up uh pretty pretty significantly year on year yep and that's okay so that comes out about 23 000 per month across those 30 those 30 customers now if i multiply those 30 customers times 22 grand a month i mean that puts you at what is it like 680 grand a month in revenue just on sas uh yeah yeah just on sas that's probably that's a good number okay i mean is that accurate yeah okay so that would mean you guys are running essentially an 8 million dollar arr right run right sas company and then you've got another 30 juice on top of another 2 million or 3 million on setup fees professional services yeah perfect you your numbers tie out great sweet that's great okay so that's the company now you mentioned this has been expanding over time so take me back to day one when did you launch the company what year yeah so uh well there's probably two day one so i i i joined the company in 2016. i'm not the founder i got uh hired by our investors to take a business that they had a lot of faith in where they thought they needed somebody who had more scaling experience so i jumped in in mid-16 and so there's kind of the chapter that's been written from 16 onward but the company was actually launched back in 2009 more as a professional services business that started to morph into a software company uh so the company's been around a while but but i like to think about kind of what's been happening over the last three years between 2009 and 2016 how much company did the capital raised before you came uh close to eight million dollars eight million raised and how much total today raised uh just under 18. okay why did you have to raise an extra 10 why couldn't you come in and fix stuff and get cash flow pumping and not have to take extra dilution yeah so um you know we're solving a big problem uh we're solving a complicated problem working with health plans require technology that is highly secure and i would say the other part is we to support the health plans and to solve a problem across the area called quality and risk adjustment are effectively while they're like products they're different products and so from a product development standpoint requires a lot more capital got it okay so i assume obviously you raise additional capital now you're burning capital to drive growth is that accurate are you cash flow positive uh we will end the year uh cash flow positive okay that's great today though like last month are we talking burning like a million a month or 100 grand a month or how close to your oh no yeah i think we've been really great stewards of capital so we're burning about a hundred grand a month oh that's not okay that's not bad at all and what's your team size team size we've got uh today about 80 people full time okay how many engineers uh 15 engineers 50 you know these numbers you've listened to the podcast before haven't you yeah well look like anybody who's worked with me know i'm a numbers guy so i like it i'm right up my alley i like you when i interview another numbers guy that's good or gal alright so 15 engineers and at this price point i imagine you have serious kind of field sales operations how many quota carrying sales reps yeah so we actually have a small team but we're expanding it we have two quota carrying reps uh but our sales leader also effectively carries quota as as uh as does effectively anybody at the senior team right we're all kind of play a part well so jay 80 people full time 15 are engineers two are quoted carrying reps who are the other 60 people yeah so all right yeah so those um we've got on the product side we got a team of six um and then our operations team we've got about 50 people now so you know we talked about the 10 million revenue um you know we have business under contract to have that number be about 70 higher next year and so the 50 and ops are effectively supporting that new growth that's already been solved what is it i don't understand what that means in your space what does an opa mean uh so our operations team so when i talk about you know we have to capture information on behalf of a health plan and and look like you know from a standpoint of like our business we're trying to disrupt a tech enabled services model that's really heavy with people and so our competition will reach out with um they'll have people calling provider offices a doctor to request a medical record to be sent in on a member that information has to come in and be reviewed to make sure that it matches the member that they're seeking they'll then attach it into the system then it gets reviewed by a certified coder or abstractor and we're trying to continually take out that layer of work and try to automate it and so right now our team of our operations team is about 50 and those are the 50 people who call on providers to get the record and review the record and attach it into the system so i imagine if your operators do a good job onboarding new customers you see great expansion revenue so if you look over the past 12 months let's peel back that onion what was gross revenue churn over the past 12 months uh so gross revenue term we were about 90 gross 90 retention on a gross basis okay so 10 gross revenue churn and then how much expansion on that same cohort uh 150 okay so just to be clear the customers you had ignoring new customers over the past 12 months just the customers yet from exactly a year ago 10 to their revenue churn but that same cohort of customers you up sold 150 percent of the revenue is that accurate uh that's accurate that's great okay i mean so that's obviously i mean that's like 240 net revenue retention uh i would put that definitely in world class the question is can you do that at scale yeah so we think we can and you know we look at the 90 um retention and and i would say that that's not something we're we're satisfied with and and so we think from an improvement standpoint we can drive that up towards 95 through some improvements in product additional capacity in our customer success team and then just maturing kind of how we sign up customers and making sure that we have the right fit on the front end and we've appropriately identified the solution 30 customers at 225 000 a year or 23 thousand dollars a month puts you again right now about 700 000 per month in just sas revenue what was just the sas revenue about a year ago do you remember yeah so a year ago it was uh maybe two million okay got it so about 160 000 up to 100 basically hundred sixty thousand up to seven hundred thousand yeah yeah that's impressive okay good so basically what you're telling me then is if you had a 100 sorry 150 expansion on 160 000 you had exactly a year ago right so that takes you up to about 350 000 the rest of the new the rest of the new revenue growth the other 350 000 basically came from new customer editions correct yeah interesting so how many customers did you have over the past 12 months uh we've added uh half a dozen customers half a dozen six okay interesting that's i mean again really really really nice story there so six new customers and how are you getting these customers at the field sales knocking on doors yeah so we have a field team out there i mean the the beauty of our market is it's easy to identify all the customers that we can sell to there are effectively 2 000 health plans across the country that participate in medicare medicaid and the commercial exchange so we take an account based uh marketing approach for the the top players and then we work through um sale various sales campaigns with integrated email campaigns blogs we have our own podcast and we try to weed those together and time into some important trade shows that take place throughout the year to bring customers to us and make sure that they know who we are and what we're about so when you add all these things together to get these six new customers what do you put your fully weighted customer acquisition cost at for a new 300 000 year plan yeah so um our actually customer acquisition cost is is pretty low um and it's probably low because we we have we would like to invest more but i would say our cus fully loaded customer acquisition costs with all of sales all of marketing uh commissions in there trade shows about trade shows about 20 25 oh a first year acv or your total revenue a first-year uh acb got it so 25 of 300 000 bucks a week you're spending about 75 000 to get a new 300 000 customer yeah and and i would say as we look into next year we're looking to expand our customer acquisition cost yeah what um i mean it sounds like a pretty capital efficient business are you looking at raising capital right now uh yeah we're in the final stages of a capital raised process that's great i mentioned i know you said you're announcing this friday this will be out obviously by then so how much how much are you raising uh so it's it's still a little bit in flux but um but we're expecting to raise uh close to 10 million dollars and why do you need to raise 10 million bucks with such healthy unit economics 240 expansion three-month payback period you don't have a cash gap yeah i mean we we think there's an opportunity to build a really significant business and um and we're we have um when i came in 16 and 17 we were playing uh kind of defensive uh a defensive game shoring up the foundation of the company and now we've got a lot of momentum behind us and we want to be much more aggressive and we think there's an opportunity to to to move faster and um and one of the you know with the new investors we're bringing on we have a lot of support to to build something large uh and impactful in the healthcare space jay what percent of the company do you think you'll have to sell to get 10 million you know new dollars into the company are we talking like 10 20 of the company uh you know so typical kind of like i look at typical cap raise kind of you know 20 20 30 percent okay got it so you're looking again like a 50 million dollar pre-money valuation 60 million post money something like that yeah i think that's um you know that's close and do you feel like that's fair with 8 million in terms of true ar annual you're looking at about a five six x a or multiple uh it depends on you know depends on the day but uh you know we wouldn't be taking that money in if we didn't think we had the right um you know the right valuation and the right relationship how'd the firm incentivize you in 2016 to join the company you're a guy you look healthy you can do anything you want right it's not your baby i assume they have to give you a significant portion of equity to get you to come in correct yeah yeah i probably asked my wife that question but um you know i i i was an executive in a publicly traded company and um i really want i was uh most recently guidance software which is in the endpoint security space i was chief revenue officer um i want to take the opportunity i wanted the opportunity to lead a company i thought there was a good fit here with what the reveler was up to and was happy to take a really significant cut and and w2 compensation for equity and so um you know with our key investors upfront ventures uh uh you know key player in southern california and we work to ensure my you know my stake was aligned with theirs so you know heavily equity laden you know relationships more you got more or less than 20 of the company oh less than that less more than 10. um you know that's close okay we'll call the reason i'm asking is this if you sell 20 a company let's say you let's just make the math easy let's see at 10 of the company right now i mean you're taking a two percent cut right on on that dilution i mean there are so many ways you're doing about 10 million a year right now in a revenue total when you add your sas post professional services why not go use non-dilutive debts you save personally for yourself being self-interested you save your two percent yeah so we're um uh it's a good question um you know i think the uh the two percent um the 20 you know haircut for me or for members of my team i think we're willing to do that with the investor set we're bringing on who uh we're bringing on a key investor that knows our space extremely well and i think can play a significant role in how we scale uh and then on the you know the topic of venture debt um we are um we do have venture debt um we have uh a term loan and we're also um we will have an ar line going forward uh to support the cash flow needs of the business who did you get the term loan from was it an svb deal uh we we're current svv bankers yeah but did you get a term loan i mean you can bank with sbb and not have a terminal yeah so we have a term sorry we have a term loan with them and and with our cap raised process we're also evaluating some other options beyond svb but uh currently we have a term loan with svb and those are that's kind of your typical rates somewhere between three and six percent 20 to 50 bips of warrant coverage that kind of thing yep yeah right in that line yeah and why would you look at moving away from svb have you found cheaper capital uh we are finding yes we're finding cheaper capital um and i think our story is appealing to some of the banks we're talking to and they're being pretty aggressive and how they're looking at us yeah uh when you analyze the cost of capital is it strictly just looking at can we get cheaper than a three to six percent interest rate uh yeah i mean i think there's you know it's that's part of it but also making sure that we're building a relationship as we think about some inorganic opportunities out there that that we have a potential lender that um you know can support us with that i'm not quite sure i know what that means so um i mean i guess the reason i'm being the reason i'm being curious here is because if you found cut capital that's cheaper than three to six percent i want to know about it because everyone will go to no no no no so i mean on the term loan um you know they're all kind of in and around the same spot okay but we're uh you know we are looking at some acquisition opportunities and and would like to finance that in part with debt and we want to make sure we have a banking partner that's you know kind of you know at our at our side on those opportunities okay so let's do that if you were going to raise capital to help to help essentially put up some debt in an acquisition where you maybe only have to put let's say you're going to buy a company for 5 million bucks you only have to put up a million you use debt to put up 4 million what facility would you do that under would it you said an a you you do it under kind of an ar advance versus something else uh no i think i think we would um i mean so we have the equity coming in and we'd probably bounce out with additional uh term loan okay have you found so very rarely will svb or basically these debts if you're getting a three to six percent interest rate because these banks are making so little they always are going to be want to be senior position it's very hard to stack term loans without doing a refi so is that what you're looking to do is actually a refi does something give you a bigger term loan than svp yes oh i see so you're not looking to get someone to sub svb you're looking to refi and get a bigger line absolutely sorry i see got it okay very good very good well we'll look for that news that'll be exciting um on that noah jay let's wrap up here with the famous five number one what is your favorite business book um you know my favorite business book would probably be um uh never eat alone by keith ferrazzi although i'm reading uh right now i'm reading um the founder um which is also a great book very good number two is there a ceo uh of your following or studying yeah so uh timely one with uh john donahoe who just stepped into the nike ceo position yesterday leaving servicenow yep number three what's your favorite online tool for building your company uh you know uh since i'm kind of a market-facing leader i would probably have to say hubspot so i i look into the app every day to see our sales team is doing and building pipeline and and uh driving activity with prospects jay number four how many hours i spend every night uh target seven but uh not often hitting it so i'm about six and a half okay you mentioned a wife earlier so it sounds like married how many kids yeah married uh two boys two boys and how old are you i'm 52. 52. last question what do you wish your 20 year old self knew yeah so it's a that's a good one because my oldest boy is 16 so he's approaching that age pretty fast i think uh probably three things probably one find a great mentor two don't be afraid to join a large company early on they can provide great opportunities to learn and develop and the last one i'd say manage your cost structure if you want to take the leap start a company be an entrepreneur it is really hard to peel back costs after they've kind of you know crept into your life guys revellier is helping folks like anthem get more information on the clients and patients that they ensure they're doing that again via jay's tool he stepped in in 2016 after the company had already raised about 8 million bucks today raised about 18 million looking to raise another 10 uh right about now to fund some acquisitions and do some other things they're burning about a hundred thousand dollars per month right now 80 people on the team 15 engineers two quota carrying sales reps really impressive economics here 10 gross revenue turn annually 150 you heard the right 150 expansion uh revenue so call it 240 net revenue retention payback period only three months so healthy economics again 30 customers paying about 300 000 per year we're about 8 million in arr is pure arr and another 2 million professional services on top of that jay thanks for taking us to the top yeah hey nathan this was great thanks for your time do you guys know i fight like heck to get these data points for you from these ceos that rarely do these kinds of shows if you want more shows like this make sure you subscribe right now we're trying to get 10 000 youtube subscribers by the end of september here 2019 and it would mean the world to me if you clicked now to subscribe additionally i've got two more great interviews for you if you want more data points from the world's leading sas ceos click and watch one of them right now