How RealDefense Reached $65M Revenue and $20M+ EBITDA Through Six Acquisitions (Interview with CEO Gary Guseinov)

Revenue and EBITDA Teaser for 2025

Nathan Latka

00:00How much in top line revenue will it finish the year with? Real Defense this year 2025. Between $16.70 and EBITDA will be between what 10 and 20,000,000 or more? No. It's between 20 and 25. What was revenue right before you went public?

Gary Guseinov

00:12>> It was relatively small amount, less than $10,000,000.

Nathan Latka

00:15When you bought the company back in 2017, how much revenue was it doing at that point in terms of ARR? They were doing like 7,000,000 a year. Gary, you're at 70,000,000 of revenue today with 25,000,000 of EBITDA. If someone comes to and offers you $350,000,000 all cash upfront, do you sell the business today? Hey, folks. My guest today is Gary Goosenev. He's the CEO of Real Defense. He founded the company actually all the way back in

00:382003. It was called Cyber Defender back then. Grew it from 0 to $70,000,000 of revenue by 2009 and took it public on the Nasdaq. Long story short, bought it back much later in 2017, rebranded it, is now scaling again. So we're gonna jump to the full story today. Gary, you ready to take us to the top?

Gary Guseinov

00:52>> Let's do it.

The 2017 Buyback and What RealDefense Does Today

Nathan Latka

00:53Alright. So let's actually start off with the buyback, which I think happened in 2017. What did you end up buying back the company for? And then tell us what the product does today.

Gary Guseinov

01:02>> Sure. Yeah. So it was a relatively small amount, less than $10,000,000 We bought it back when it was declining precipitously month over month and year over year, and we put a plan together to bring it back to life and grow it through acquisitions. And so the whole concept behind RealDefense from the beginning was to do acquisitions of small companies that are either declining or flat and turn them into synergies and generate more revenue, more LTV, reduce

01:31>> CAC, and grow these businesses. And we've done six acquisitions since 2017.

Nathan Latka

01:35Interesting. And when you bought the company back in 2017, how much revenue was it doing at that point in terms of ARR?

Gary Guseinov

01:40>> We were doing less than $10,000,000 We're doing like $7,000,000 a year.

Nathan Latka

01:43Okay. So you bought it for around or under 1x ARR?

Gary Guseinov

01:48>> Under one x ARR.

Nathan Latka

01:50Yeah. Okay. Guys, we're gonna go back and learn, like, what the hell happened. Right? You go to 0 to $70.80, 90,000,000. The new management came in. I guess something happened. We'll get more on that, but let's not let's not bury the lead here, which is what the product does today. So, Gary, just I'm gonna share screen here, go to your website. I think this animation here is actually really powerful. Help us understand what the product does

Platform Overview and SmartScan Technology

Gary Guseinov

02:08here.

Platform Overview and SmartScan Technology

Gary Guseinov

02:08>> Sure. It's actually not just a product, it's a platform. Real Defense has many products and brands underneath it, but the fundamental concept is that we monetize our partner's user basis. So for instance, if you're an antivirus company and you're looking to build additional revenue, but you don't want to invest into R and D, you don't want to invest into infrastructure, you want to add additional revenue ARR, higher LTV, increased retention, you would license some. What are

02:36>> our technology stacks or all of the products that we market or develop? And then you would add them to your existing portfolio of products. So that's the big picture view. Within the platform, we have a a technology called RealDefense SmartScan. What SmartScan does, it analyzes data on your device and looks for telemetry signals. So for instance, let's say you have a laptop and you're at a a coffee shop and you're connected to the Internet. We're going

03:04>> to give you an opportunity to connect through a VPN. So we're to know that you're connected out of a coffee shop, here's a VPN offer. Let's say your computer is running out of disk space, you want to know about that ahead of time and you want to prevent crashes and problems with your software, we're going to sell you an optimization product. And so that telemetry stack and the monetization that comes along with it integrates into your

03:27>> existing platform. So if you're an antivirus company, you have an antivirus product that sits on users'devices, We plug, run into that, and we deliver very customized messaging based on telemetry. It's just in time marketing, and it performs really well. It's far more efficient than adding advertising or other forms of monetization that pisses people off at the end of the day. So this is really efficient.

Nathan Latka

03:51Yeah. I like the word you used just in time marketing. So guys, before we jump into more of the backstory, wanna make sure you don't you're following along here. Gary is selling a pain killer, but what's cool about this is he doesn't have to wait for someone else to talk about the pain. He sells a platform that actually tells you the pain. Right? Your PC is running low on drive space. Oh, buy this product. Right? So

Founding Story: Cyber Defender in 2003

Nathan Latka

04:07it's the pain and the pain killer. Really interesting vertical integration there. So Gary, let's go back to the founding story just briefly. You launched the business in 2003. How old were you in 2003?

Gary Guseinov

04:17>> Oh boy, I think well, I should know that, right? Because it's his age. I was 33. Yeah, 33.

Nathan Latka

04:25Okay. And were you already like wealthy? Was this your second company or were you sort of risking all in this business?

Gary Guseinov

04:30>> I've had successes very early on. I had a direct marketing company that I found in the late nineties and, it it became a multimillion dollar business fairly quickly. And so I used that knowledge and used some of the capital to build my my first cybersecurity company in 02/2003. So, yes, I had some success. I had some money. It was on my first rodeo, but the company that I found in 2003, Cyber Defender, was substantially bigger than

04:56>> the company I had prior to that.

Nathan Latka

04:58Interesting. Okay. And how much of your own capital did you put in in 2003, 2004? Did you raise equity instead VC?

Gary Guseinov

05:04>> Yeah. It's oh my god. So long ago. So yes, do put in my own money, I think it was like 50,000 or $75,000, and then we went out and raised about $250,000 in the initial raise. And then subsequent to that, we raised probably close to 100,000,000 from investors. And that that the public funds, private debt, equity, did all kinds of rounds.

Growing from $0 to $70M Revenue by 2009

Nathan Latka

05:24Okay. And during that period 2004 to 2009, public filings say you grew basically from 0 to $70,000,000 in revenue. Help us understand how you did that. Any tactics you use then that are relevant for founders today looking to grow that fast?

Gary Guseinov

05:35>> Sure. So what we realized early on is that you have to you have to have multiple stages of product offerings in order to generate significant amount of revenue in terms of selling a low priced product and then sell a middle priced product and an expensive product, meaning something that costs $20, something that costs $50, and then something that costs 200, 300, $400. And so we created a path where consumers can buy something at introductory price at,

06:01>> let's say, dollars $20.30, and then they would be offered other products that are more expensive. And we found that their elasticities is material. You can go from $20 to a thousand dollars if you just ask. And so what what we found a lot of companies out there didn't know how to ask. And we've learned from their mistakes, we've learned from our mistakes and we started asking for more money. And so we saw a significant increase in

06:25>> revenue and profitability.

Nathan Latka

06:27What would you remember before you IPO ed what your largest customer was paying on an annual basis?

Gary Guseinov

06:31>> Oh, wow. The largest $500, probably $700 a year.

Nathan Latka

06:37Okay. So you were still a low ARPU, high volume play?

Gary Guseinov

06:40>> Yeah. We we were yes. So the and this is you're talking about like twenty years ago. So so it's very different environment. High speed Internet is not is not available to everyone. Their, you know, billing is difficult. The recurring billing is not how it is today. There's all these dynamics that didn't exist that we have today. We have a lot more there's a lot it's a lot it's a lot more favorable landscape today for enterprise or

07:04>> SaaS companies who sell to consumers or or businesses. It's far easier today than it was before.

Nathan Latka

07:08Guys, remember, I am not just a YouTuber. I'm investing into my third fund. We've deployed $250,000,000 into five fifty software companies so far. Again, at founderpath.com. If you're interested in capital, I would love to cut you a check because I know you're investing in your education. You watch my show. So sign up at founderpath.com and when you get the onboarding email, I reply. And I see all those. Just reply and say, Nathan, I found you through

07:31YouTube and I'll make sure to prioritize you. I would love to cut you a check. Check out founderpath.com. Yep. One of the distinctions that we're gonna get into later on the episode is this first company raised a lot of equity. You mentioned a $100,000,000 raised. I believe this new company, you're keeping more equity, you're using debt. We'll talk about that in a second, but to that degree, can you share what were you diluted down to at

07:50the first company before you IPO? Do you remember?

Gary Guseinov

07:53>> Yeah, I diluted down to about 32%.

Nathan Latka

07:56Okay, And what was the highest valuation you guys hit before the IPO?

Gary Guseinov

08:03>> It wasn't that high. It was maybe $45,000,000

Nathan Latka

08:06Fund 70,000,000 top line?

Gary Guseinov

08:08>> No. No. No.

08:10>> That's at the height of the business being public, not before going public.

Nathan Latka

08:15Oh, I see. What was revenue before you went right before you went public?

Gary Guseinov

08:18>> Oh, it was like maybe $10,000,000.

Going Public via Self-Listing and Moving to Nasdaq

Nathan Latka

08:20Oh, God. This is see, this is crazy. Say you've gotta have like a 180,000,000, 200,000,000 to go even think going public. You went public in 2010 with 10,000,000 of ARR and a 45,000,000 valuation.

Gary Guseinov

08:30>> Yeah. And and it and it's, you know, it it's not a conventional. So we didn't do do a conventional IPO where you have a, investment bank that goes out there and shops the deal and gets bunch of investors signed up before you go public. It wasn't like that. It was gone through what's called a self listing. So it's a little different now. There's a there's a diff different regulations around that today. It's a little easier actually

08:51>> to do a public today, but back then, was a self registration. So it's as if I go public without an underwriter. And so it's not a reverse merger. It's none of that. It's conventional public offering without an underwriter. And so you do that for companies that are worth less than $50,000,000 And so if you're worth more than $50,000,000 then you have to do a conventional IPO. And so SEC had these rules. I think they still exist.

09:18>> What do you think about public and self list for a small cap company? And then we graduated to NASDAQ. And so we drove the value of the business, drove the stock price up, drove efficiency, and then moved to NASDAQ, I think, by two years or three years after it went public.

Nathan Latka

09:33You left the company I believe in 2011. Was that before or after you graduated the NASDAQ? After. Okay. So why did you leave?

Why Gary Left in 2011 and the Liquidity Problem

Gary Guseinov

09:40>> Yeah. I I needed some liquidity and when you're an insider of a publicly traded company, you're limited to amount of shares you can sell. It's very simple. And I found a very good CEO who has experience. We grew to over a thousand employees at the time when I left. It was a fairly big operation. And I needed somebody who understood that type of scale and could grow it as a public company. And I found somebody, they

10:05>> started and operated the business. And I felt that I left it in good hands and they couldn't figure it out. And after some period of time, the company just started going down and they went private. Anyway, I can continue talking about it, but let me know if you want to get into specific places.

Nathan Latka

10:20Well, I think one pattern that's very interesting, like today, we're recording this in December 2025. There's a lot of founders right now that are going on raising capital, and they don't think about how they're ever gonna get personal liquidity. They're stuck at a shitty salary, like $60 a year, but they raised $50,000,000 from VCs. They're all over TechCrunch and Twitter and The Wall Street Journal feeling good about it, but they're not thinking about, hey, how am

10:41I gonna make money on this personally in the next one to five years? It was so extreme for you. You just said you had to quit your own publicly traded company to not be an insider to then get personal liquidity. Is that accurate?

Gary Guseinov

10:52>> Yeah. Yeah. It's it's wild. Because it it caps out, like, if you don't control the company, then you don't control the faith of your compensation. Just very simple. And so if you are Okay with that, then you're Okay with that. If you're not okay with it, meaning you need more liquidity, don't give up control or don't create a situation where you're not in control. And so, you know, but there are there are ways. They can you

11:18>> can borrow against your stock. You can create

Nathan Latka

11:20a a situation. Why didn't you do that? Why didn't you borrow against your stock?

Gary Guseinov

11:23>> I did. I did. It was just very limited. At the time when if you're if the if the stock is not trading at certain volumes that investors want, then you're limited on what you can do. So meaning you can borrow or sell. And so as a freshly minted company, we continue to have normal challenges that you would have when you're growing a business. There's not enough awareness of the stock. Now that improved over time, but there

Borrowing Against Public Stock: How It Works

Gary Guseinov

11:48>> are certain points of time where there was not enough awareness, not enough liquidity, not enough trading. And so Yep. Investors pay attention, those days are your limit.

Nathan Latka

11:56Yeah. I mean, is how Elon Musk can take over Twitter. Right? He's getting a massive loan against his, you know, his his SpaceX or other companies stock, private or public. The same with Bezos and Amazon, right? So this is a good time. Just teach our audience quickly in case someone listening today in four or five years is public and they do wanna, you know, take a loan out against their business to go do a massive takeover.

12:15What was your stock worth at its peak and and how did the lenders look at it? What was like the max loan you could get against your stock?

Gary Guseinov

12:20>> Well, you you just asked a lot of questions. I mean, I mean, down the the concept first. First of all, it it it's if you you are not borrowing necessarily against the business, you could not that's a that's a recapitalization concept and we talk about that separately But if you want to borrow against the stock that you own, let's say you own 20% of the publicly traded stock and you want to borrow against it, you can

12:42>> go get a loan. There are lenders out there who'll say collateralize your stock, we'll take your stock and put it in escrow and if it falls below a certain dollar amount then we sell it so that we don't lose money on our investment. If it stays above a certain amount, then we don't sell it, and you get your stock back when you pay back the loans. It's really simple. And these loans are sometimes no recourse loans,

13:02>> meaning you're not personally liable, it's just a stock you're collateralizing, and you can pay back interest only or no interest, and they just sell certain amount of the stock over time to collect on their interest. There's lots of ways to structure these loans, and that the money you receive from these loans is not income, it's debt, so you're not paying taxes on it. So eventually you're going to pay taxes on it when the stock is sold,

13:25>> but you are in a relatively good position to do that without incurring a lot of tax overhead and not impacting the stock necessarily, because you're not selling this stuff. So there's that's one way to do it, and and and if you're public. If you're private, it's more limited.

Nathan Latka

13:41Well, Gary, hold on. On the public, can you give us real numbers there for a second? Can you tell us, hey. Yeah. Listen. If your stock is worth 5,000,000,000, a bank will probably give you a million loan, and you're probably gonna pay a 4% interest rate. Or can you give us a sort of category there?

Gary Guseinov

13:51>> Yeah. It's it's still it's definitely not gonna be 4%. It's gonna be way above what the market rate is for these types of loans because and it depends on how how risky of an investment it is. You know? If the liquidity of the stock is low means not a lot of trading, it's more risky. If there's high liquidity, lots of trading, high market cap, then the rate's gonna be low, and you're gonna get favorable terms. So

Using Debt Instead of Equity for Acquisitions

Gary Guseinov

14:12>> it just depends on the spectrum of risk.

Nathan Latka

14:14So what would a high amount be? Are we talking like 10% or higher?

Gary Guseinov

14:17>> It'll be between 1015%. It could be even higher depending on, again, how risky it is. But you you you know, you gotta look at the investor too. Like, they're they're hoping that the stock that they're getting is eventually gonna be more liquid, go up in value, but not drop in value, not become totally liquid. Because if they had to sell the stock to cover their position, well, how are they gonna sell the stock if there's more

14:39>> trading going on? And so there's risks on their side as well.

Nathan Latka

14:43Yeah. Makes a ton of sense. Okay. You have an equity and debt mine. Your first company got diluted down to 32%. This new company, we're gonna call it the new company, it's the same company. You bought it back for cheap in 2017. You're now using debt. This is actually a good transition. You've raised money, I believe, against the company to fund your acquisitions with a bank. Tell us how you did that.

Gary Guseinov

15:00>> So as a private company, you can buy other companies with debt based on the combined value of asset. So let's say that you have one company doing $2,000,000 of EBITDA, and you're buying another company doing $2,000,000 of EBITDA, arguably the value of the combined asset, combined entities, is worth twice more than it was before you did the acquisition. And so you can use the combined value as a basis to borrow against with the metrics that the

15:31>> lenders are willing to work with. So for instance, the base, the most basic fundamental concept in lending is the turns of EBITDA to total debt value that you can borrow. So for instance, if a company is doing $4,000,000 with EBITDA, you can probably get loan between two times to four times of the total EBITDA. So 8,000,000 to $12,000,000, you should be able to get that loan for that amount. Now, there are certain funds out there who

16:00>> invest or lend into scale. So if you say, hey, yes, my metrics are 4,000,000 of EBITDA, and I'm growing really fast, I want to borrow seven times, 10 times. There are lenders that'll do that. They'll probably want to take some equity as part of their compensation. Their rates might be higher, and their term might be short. And so you have these lenders that will go up even more. But generally, it's between two times and four times

16:26>> of EBITDA as your lending spectrum where you can borrow against.

Nathan Latka

16:30Okay. So in 2022 at this new business, you get a $30,000,000 credit facility from Sunflower Bank. If that was trading at two to four x your company's EBITDA, mean, it fair to say your EBITDA was somewhere in the 5 to $10,000,000 range or no? Am I missing something there?

Gary Guseinov

16:44>> Well, you're talking about the cap of the of the of the range, right, or the or the the the the higher end of the spectrum. So I think at that time, our EBITDA was up more than 10. And so we we would net we didn't What was out more than 10,000,000? Was more than 10,000,000. So we we didn't max out our debt capacity at any time. We we don't do that today. We don't plan to.

Nathan Latka

17:08So I wanna dive deeper here because you're you're really deep in these things. I mean, you secured a $30,000,000 line from Sunflower Bank when interest rates are starting to skyrocket, right, in 2022. Many founders right now are terrified of debt or they don't even know it's an option. Why are you happy to pay nine or 10% interest instead of giving up, you know, 10% of your company to a VC for free, no interest?

Gary Guseinov

17:27>> Because I value the equity far more than I value the debts. It's simple. Like, why would you do that if you if you think your business is growing and your equity is growing, arguably your amount of equity you're going be giving up is worth far more than the money that you're going to be borrowing. And unless you're selling equity into your own equity, into the equity raise, meaning you're part of the equity divine is yours and

17:53>> and you're able to you know, get some liquidity that that might make sense and so we've done that as well. It's not like we don't do that. We've done that and so, it's a combination of a time, opportunity, what the board wants to do, and and, you know, how the company is scaling. All those factors come into play of how you raise capital. It's not one thing. It's many different things.

Nathan Latka

18:16So let's fast forward now to today, December 2025. How much in top line revenue will it finish the year with, Real Defense this year 2025?

2025 Revenue, EBITDA, and Capital Allocation

Gary Guseinov

18:24>> Between 60 and 70.

Nathan Latka

18:25Okay. And EBITDA will be between what, 10 and 20,000,000 or more? No. It's it's between 20 and 25. That's incredible. So as a capital allocator, how do you think about using that money? Is it just plugging into new acquisitions? What if you can't find a good deal? What do you do with the money?

Gary Guseinov

18:38>> I have plenty of opportunities for M and A. I have a multi billion dollar pipeline, so we're looking for bigger deals now. So before we were doing deals under a 100,000,000, under 50,000,000, now we're more interested interested in deals that are $100,000,000 plus. There's a lot of them out there. A lot of flat companies now performing. We're not generalists. We're very specific. We're only focused on consumer privacy and security. And we like synergies. We don't like

M and A Pipeline and Focus on $100M-Plus Deals

Gary Guseinov

19:02>> buying businesses and just like letting them exist on their own and prove them on their own. That's not what we do. We buy it, generally it's a product and technology that we're buying in consumers, and then we take them and integrate them into what we already have. And so we have our own billing stock, our marketing stock, our AI stock, and then we have products that benefit each other. So I can take a VPN product and

19:24>> sell that into my identity protection product suite of a category of consumers and vice versa, and then they compound each other in terms of growth. That's how we make this work. Otherwise, you know, building businesses that are standalone entities and growing them individually is not an efficient use of your time and your resources because they benefit from each other more than they benefit just from your technology that you bring it to the table.

Nathan Latka

19:50So using debt to grow the business, since you took it back over in 2017, you bought it for under $10,000,000 under 1X ARR, you've now grown it to $6,070,000,000 of ARR. I asked you a question on the, at the last company, you said you diluted down to 30%. How much equity do you still own in the business today?

Equity Ownership and Company Structure Today

Gary Guseinov

20:04>> It's less than 20, and the reason is because when we started the business, we started with multiple partners. It's not a dilutive effect that took place. It's actually dilutions with mineral. It's about a structure of the organization, of the investors and operators. And we're all sort of operators because the investors are actively involved in companies'operations. So it's very different than before. Before, was just me. And then investors, VCs, and prior equity, and debt. And it's

20:36>> very risky to do it that way too. Like, you have to look at it from that perspective. Right? So and you spread the risk and also build a bigger business versus trying to do it all on your own. So think about that and take out a lot of risk. So

Nathan Latka

20:51Gary, you're at $70,000,000 of revenue today with $25,000,000 of EBITDA. If someone comes to you and offers you $350,000,000 all cash upfront, do you sell the business today?

Would Gary Sell for $350M?

Gary Guseinov

21:01>> Possibly. I I I think that, you know, every company is for sale at the right price. I think we still have a lot of runway. We're growing at a reasonable rate. We have a lot of M and A opportunities. We can take this to a multi billion dollar entity by continuing to do what we're doing. There's no market shifts that we're predicting that will slow this down. There are a lot of companies that need the type

21:24>> of mindset that we bring to the table, and how we compound revenue, how we create more opportunities, and how we create synergies. I think there's a lot of sellers who are going to come to us and say, Hey, I think I'm done with my organization. I think you guys are better stewards of this type of business. Let's make a deal work. So we can continue doing this.

21:47>> We're not running for the door. You know? This this this this structure that we've built allows us to have a proper compensation, create liquidity. We can continue adding on and keep growing. There's no need to go public. There's no need to sell.

Nathan Latka

22:01Love that, Gary. And how many folks are full time today?

Team Size and Revenue per Employee

Gary Guseinov

22:03>> We're at about 300 or so people. About 200 of them are outsourced organization, mostly in support and infrastructure, and then 100 is marketing and R and D, a dev. Most of their R and D is done in Pasadena, so we have a lot of coders, so a lot of people who come to us from companies like Norton, Neurography, Avast, very smart team of some PhDs, and then we have a support organization, so yeah, it's not small,

22:29>> know, and it requires a lot of hands on management and I think we've done a pretty good job. So yeah, it's working pretty well.

Nathan Latka

22:3770,000,000 of revenue divided by those 300 folks, many of which are capital efficient because they're outsourced, is still about $230,000 of revenue per employee. Really healthy, and it's evident in your bottom line with $25,000,000 of EBITDA here wrapping up 2025. Gary, on that note, excited to see what you do in 2026 in terms of your acquisition pipeline, your inorganic growth, all the new deals that you do. If people wanna follow your story over the next twelve

Wrap-Up and Where to Follow Gary

Nathan Latka

22:57months, where's the best place they can find you online?

Gary Guseinov

23:00>> LinkedIn is probably the best thing because we post a lot. We post lots a lot of updates. Very active on LinkedIn. That's probably the best way.

Nathan Latka

23:07Guys, Gary Gusenev, CEO of Real Defense, started his first company, his first big one in 2003 called Cyber Defender, grew to about $10.11, $12,000,000 of revenue before self listing, but was diluted down to 30% because he raised so much VC. Ultimately, once on the Nasdaq, the company grew at about $70,000,000 of revenue, and then shit hit the fan. Different CEO in place. It declined. Gary swooped in in 2017. He was doing about $78,000,000 of revenue. He

23:31bought it for under 1 x ARR, and now he is running his inorganic playbook using debt. He's partnered with a bank. He's raised a bunch of capital. He's done six acquisitions. The company now today is doing 70,000,000 top line, 25,000,000 EBITDA with big plans in 2026. Again, selling a platform to help their partners show the pain and then sell the pain killer. Really smart vertical integration there. Gary, thank you for taking us to the top.

Gary Guseinov

23:55>> Awesome. Thank you, Nate.

Nathan Latka

23:56You won't believe this CEO's revenue. Click here to watch the next episode right now.