How I Did It: MN Tech Entrepreneur Jeremy Pierotti On Raising $5.2m

sourced

How I Did It is sponsored by Dundee Venture Capital in support of startups.

Dundee Startup Supporter

EMR Healthtech venture Sansoro Health raised a $5.2m Series A round last month, led by CEO Jeremy Pierotti.  Here’s how he did it, in his own words:

We have been fortunate to have investors who bring more than money to the table, including: TreeHouse Health, Healthy Ventures, and Bain Capital Ventures.

I think that getting investors is an important milestone and it’s a meaningful accomplishment in some contexts, but it doesn’t equal success. We will be satisfied that ‘we did it’ when we have changed the landscape to better enable secure and robust data exchange — one that leads to better outcomes at lower cost. That’s our why.

Step 1, to this point, our success has undoubtedly been a group effort, so I wouldn’t say I did it as much as we did it. It’s too hard to think alone let alone act alone. I know that for every night I lay awake, my partners are doing the same thing. I know that our investors also share in the credit. It’s definitely an all hands on deck sort of dynamic, without question.  Having a group of allies who interest are aligned is the first and foremost reason we got here.

We did it with outside advisors — other founders, industry veterans, and mentors who have always made time when we needed advice.  We sometimes joke that when we ask 10 people a question we receive 20+ opinions…which can bring it’s own challenges, but means we have a library of options. There really is no one solution, usually a couple of different approaches that have the potential to work, though you might not know for years which actions got you 20 or 100 yards down the line.

For example, early in our history, I contacted a former boss of mine for some advice and he really opened our eyes to the big picture.  He taught us some very simple principles like:

The more revenue you have the less equity you’ll have to give up.  It doesn’t matter how great you think your tech is, what you’ll be rewarded for is customers and some meaningful revenue.

If you fast forward to the timing for our series A, you’ll see that we did it with preparation.  About a year and a half ago, we embarked on a concerted effort to start building relationships with potential investors. And I give credit to Dave Levin for being so forward thinking because we didn’t need money but he knew that the more relationships we had the better we would be when we actually did need to talk money.

Between Boston and San Francisco, we had 20+ meetings setup over the course of three immersive days to share our opportunity with new potential partners that we have previously interacted with in some form or fashion.

It was exhausting but we went from about 30 potential investors to about half a dozen pretty quickly. From there, it was a matter of who we wanted combined with their interest level. Narrowing the pool and focusing your energies on the investors that are in the smaller pool was critical for us. Know who the people are what their backgrounds are, what their buttons are. Bain Capital Ventures distinguished themselves by showing early interest, by being serious about our time and followup.

We did it by directing our sales efforts and by being disciplined about managing our pipeline. We have and use a CRM internally and to show our investors what our pipeline looked like in real time.  On the financial side, we engaged a fractional CFO and really refined our record keeping, moving from cash basis to accrual basis, to professionalize our financials.  We also paid close attention to having solid legal agreements, to ensure that our customer contracts, employee agreements, and vendor contracts were complete and organized. When it came time for due diligence, we had our financial and legal pieces clear, which is important to have for actually closing the deal.

Overall, the hardest thing that we’ve done well some extent so far is to step back and objectively look at our business. And this is where it comes back to “we” – thanks to our advisors for helping us ask the tough questions and see things from a different perspective.

RELATED

How I Did It: MN Tech Entrereneur Bryn Erickson on Raising $1.3m

Comments

Sponsors