Sramana: What did you accomplish over the next 18 months with the funds that you raised in your Series B?
Stan Nowak: We focused on customer growth and segment growth. We started spreading across the market a little differently. We understood the dynamics of the healthcare marketplace. Between 2003 and 2006, a significant element of healthcare reform occurred due to the Medicare Modernization Act which was passed in 2005 and implemented in 2006. The Medicare drug benefit was a national campaign and that became a terrific opportunity for Silverlink in a regulated, retail market to help the issues of helping seniors navigate a complicated healthcare benefit and move into a significant new era.
Throughout that period I kept hiring highly qualified people who knew their market. Some came from customers and others from industry advisors. The healthcare market is very subtle, so we were constantly looking around the corner and getting an understanding of where we needed to be so that we could get there faster than anyone else in the marketplace. Now in 2013 we are reliving that process with the same type of tectonic changes in healthcare.
Sramana: How much more money have your raised since 2005?
Stan Nowak: The total amount we have raised is 1$5 million since 2005. We have raised $22 million total.
Sramana: What have you been able to deliver on the revenue side with $20 million in investment?
Stan Nowak: The cumulative amount of revenue over time is about $150 million. We are on a mid-30s run rate now.
Sramana: I would suspect you are not ready to exit yet.
Stan Nowak: No. This is the most fun and exciting time we have seen at Silverlink. We are getting into a very exciting market opportunity area now. We are not at scale for an IPO exit.
Sramana: As you know, venture funds operate in five- to seven-year windows. Your window has already crossed the phase. There are a lot of companies that are very sizable, like yours, that are delivering good value but are not ready to exit. These companies have taken a lot longer than the usual venture time window. How do your investors deal with that?
Stan Nowak: They are seeing this play out across their portfolio. It is not a coincidence that we have been through some economic shocks during the past few years. Healthcare companies were impacted by the economic shock of 2008, and then healthcare reform was a stutter step for the marketplace. Anything that has a massive policy change causes the buyers to lock up for a time. These are dramatic business cycles.
Sramana: Has healthcare reform helped your, or has it been a detriment?
Stan Nowak: Most healthcare technology companies experienced two things. In 2010 when the law [the Affordable Care Act] was passed, the market was paralyzed for some time. The market was not prepared for it. Then management teams had to scramble to adjust. The implementation of the law is very good for many healthcare companies, including us, because the dramatic impact on healthcare consumers is a massive opportunity for people like us who stand between aggregators and risk-bearing entities and consumers.
As you look over the history of the company, 2010 was a period of disruption. We are coming into a period now where we feel there is going to be tremendous opportunity both now and in the long-term.