Episode Transcript
[00:00:04] Speaker A: Hi, I'm Eric Whedon, a seasoned go to market software executive, team builder and a catalyst for revenue growth. My journey is fueled by a profound passion for ushering in a new era of dental healthcare through cutting edge AI technology.
[00:00:17] Speaker B: Hi, I'm Liz Strickwarda. Since 2008, I've been immersed in the world of dental marketing and business technology. At Truelark, I I focus on explaining how generative AI can help multi practice dental organizations scale while redefining the patient experience. Together, we welcome you to navigating DSO innovation, where we have unfiltered conversations with dental leaders and discuss how they are using tech to win in this booming market.
[00:00:50] Speaker C: Okay, welcome to navigating DSO Innovation. We're excited today because we have doctor Jeremy Krell with us. He's a general dentist and a seasoned investor with a strong business background.
He has raised funds and generated returns at ten companies, sold three and acquired two.
As a key operating partner, he led strategic innovation at Oscar Health, which went public in 2021, founded the Barchester Bay Group, managed over 30 ventures, drove growth, equip a subscription or a health company. As an angel investor, he sits on several healthcare and dental startup boards, boasting a 15 year track record in startups, fundraises and acquisitions. But currently he is a managing partner at Revere Partners. Welcome to the show doctor Crowell.
[00:01:43] Speaker D: Thank you both for having me. I'm excited to be here.
[00:01:47] Speaker A: Yeah, very excited to have you. So Doctor Karel, let's dive in. You have a tremendous amount of experience in the dental world. As we just mentioned, you're currently at Revere partners. I'm personally excited to have you on the show. Truelark itself is a tech startup focused on providing AI communications platform to the dental industry. We won't turn this into a startup therapy session, but tell our audience, those that are listening, that aren't familiar with Revere partners, what you're up to and what you're focused on there.
[00:02:23] Speaker D: Yeah, thank you first of all for the kind introduction. And isn't it always a startup therapy session? It even is at revere.
Could be. Takes one to know one. I appreciate the intro here. Revere Partners is really the first and only venture capital fund focused on dental technology.
We're a little over four years old now, and as a venture capital fund, it's our bread and butter business to be recruiting and diligencing new dental technology companies to apply to us for funding, to choose the best investments that meet our investors interests and mandate, and then to support those startups beyond our investment. So I'm proud to say that after a little over four years of doing this, we have 41 investments that have been made out of our fund, which we continue to keep open and fundraise, which we continue to deploy capital and invest.
And we've seen a very steady flow of startups. We've been lucky to see a little over 900 in total now about 250 a year. We average, which is coming into us pretty organically, which is great.
And on top of that, we've been very high performance. So it's really kudos to the startups and to our team that are helping the startups grow.
We've had this internal rate of return that we measure our performance on, and it's been quite high. It's been in the 25% to 35% range, quarter over quarter. So yeah, we're excited to be in dentistry. We're excited to be here now at this time period, with so much the market moving so fast, so much consolidation going on, it's really pulling through a lot of startup and investor activity and we love being right on that interaction point. Point. And it's been a great time in dentistry so far.
[00:04:20] Speaker C: Okay, so tell me what specific strategic support and resources you alluded to it, but let's unpack that a bit. That do you provide to your portfolio companies to help them scale effectively?
[00:04:34] Speaker D: Yeah, it's a really good question. I appreciate that we consider ourselves a strategic minority investor. First of all, don't take a controlling interest and take control of the company. We are trying to support them. Very founder friendly, and we're also not an incubator or an accelerator, or a venture studio. Right. So we stay in our lane as a strategic investor. That said, we do have a very strong and both broad and deep team across the industry, about 108 in total, spanning across manufacturing expertise, distribution, all the way through to labs and dsos and everything else in the space that it takes to, you know, for these startups to be successful, on top of the typical dental and technology and venture capital perspective that is required for our business. So what we've done is created programs at each of the kind of key risk areas for an investor and really levied our support there. So one of them is these companies need to raise money. They raise it frequently. They try to raise from diverse sets of investors with different investment capabilities and expertise. So we have a syndicate called Revere plus that allows them to broaden their investment reach. We have have a co investor institutional co investor program where we're working with well over six dozen co investor VC companies who are VC funds who are from the largest on top of Sandhill all the way down to small focused funds.
So fundraising is a key area where we have a lot of programmatic support.
We even host now different angel groups that are interested in investing in dentistry on our platform, using our fund administration services so they can invest in and support some of these companies. So lots of fundraising support for sure. Another one is if we happen to invest in something that has a regulatory or clinical trial process, we both leverage internal portfolio synergies. We have a couple of companies that operate in that space, as well as external partnerships with organizations like Michigan, We, Pittsburgh, the Forsyth Institute, as well as the Maguire Institute, as well as several others that can really help them through that process. That's another key risk area. Those processes can take a lot of time, can cost a lot of money, and if they go wrong, even more time and money. So we make sure to kind of have some programs around that and then, you know, the other big one is kind of scaling and exiting. Right? Who can be their corporate channel partner that can help them really scale growth without bringing on 25 plus additional sales folks which are going to cost you a lot of money, but instead sell through a channel partner and then ultimately exit? Right? Is it a manufacturer, distributor, insurer, DSO, who buys that thing? At the end of the day, and typically in our space, these companies, these technology companies exit by strategic acquisition. So we work with a lot of the players on that side in order to line up these types of transitions and exits. So that really kind of spans a number of the programs that we put in place to help the dental technology companies.
[00:07:51] Speaker C: So how does reverb partners conduct comprehensive tech stack evaluations and ensure the selected solutions are the best fit for the practice models and workflows? Because we, you know, our solution is part of that tech stack. So we have found that there's nothing simple about dental tech stacks. And so I just kind of wanted to get your take on that aspect of your business.
[00:08:24] Speaker D: Yeah, absolutely. So revere kind of has four internal divisions, biz ops, where I sit, the investment team and the fundraising team, which we've spoken a little bit about. But its fourth team is this consultative arm, right. That is a separate and unbiased team that is helping the industry's corporates to essentially find the dental technology companies that best fit their business interests. Right. Whether that's finding deals to commercially partner with them, or to invest in them, or to buy them, whatever their end stage business purposes are, we have become sort of a pitch book, plus the diligence plus the relationships to simply help these corporates find the best fit for their needs. Like you're saying, if you know one DSo, you know one DSO. If you know one tech stack, you know one tech stack. There is not a one size fits all solution. Very rarely is that the case in the dental industry. There are a lot of products and a lot of services. And so you know, for your own unique processes, workflows and tech stack, you may need a solution that's different from another organization. And so we're out there to help find and implement those very different and unique solutions for your own tech stack. So we go through a multistage process where we'll engage a DSO or a DSO will engage us, we'll go through a discovery process, understanding what are they currently using today, what is going well and what is not going well, really understanding their whole technology stack, their practice management solution, the other software products that they have connected to it, who's using them, how they're using them. We'll get into how they're measuring performance and the KPI's key performance indicators that they're expecting to see versus what they're actually seeing. We'll really try to dig into and understand the client for who they are and where they are in their building and scaling process. And then with that knowledge we put together a proposal for them that will focus on the one or multiple different technology categories that they're looking for new solutions on. And then we'll go back to our own research and analyst process where we will, you know, our business development team will work with our deal team and we will go through the solutions that we have in our database and where they're at. We will try to line up the different parameters or specs that our client is looking for and we will essentially put together a report that has those solutions and explaining each one of them why they're a fit, how they would be a fit. So we basically are boiling down a lot of the research work for these and some of the technology scoping work for these dsos. It's a much more efficient solution for them. And once they get that report with different solutions on it, they then often want to basically facilitate an introduction. They want to meet them or the one that they feel is the best fit. They want to give it a demo and maybe even a pilot. And then you know, go on into a further engagement if it makes sense. And we facilitate that whole process and make it smooth for both parties.
And then either us or through one of our partners, we work to make sure that the implementation of that technology in the practice that they've chosen is seamless as well.
They have a lot of different decision makers. Their bandwidth is always constrained. Same thing with the startup, bandwidth is very constrained. So making sure that that implementation, you know, that not just, not just the wires hook up from technology to technology solution, but also that the people, what the people are expecting and how the people are using the technology is accounted for in the process as well. So that's really kind of the process or an eagle eye version of the process from end to end.
[00:12:21] Speaker A: And this is where it kind of dives into the therapy session there. You mentioned not just hooking up the wires, but the people. And you know, whether it's tech internal to a portfolio company or looking at an investment, you know, my experience working in a tech startup is very seldom is a lot of the barriers or headwinds or challenges around the technology itself. It's more the people, the buy in, the why, the organizational alignment, the leadership, communication from top to bottom and from bottom up. Would you agree with that? What insights do you have around kind of navigating alignment and prioritization within these organizations that you work with?
[00:13:07] Speaker D: Yeah, it's the biggest variable, the biggest bottleneck, the biggest challenge broadly in the entire process, even though we do provide a very valuable service in helping them boil down research and vet a number of companies that would otherwise take them an awful lot of time and maybe even not be able to access, you know, some of the knowledge that we happen to know or analyze about these companies, even though we're saving them a lot there. The real challenge in the process comes on the people side. Right. At the end of the day, it depends a little bit on how the organization is structured, but in my experience, you know, you are dealing, it's in, it's really a complex negotiation with multiple decision making parties, right? On the one hand, if it's at all clinical, if the solution is at all clinical, and many things in the dental office have some relation to the clinicians in the practice, you need to have their buy in, right? Most of these organizations do not really take the role of telling the clinician how to practice clinically. So it's really important that the clinicians be in the research, you know, phase and decision making phase. That's, that's component.
You then typically have, you know, financial and, or in operations and or a technology party there. Again, depending on what the solution is, you have that other c level role that has to sign off. If it's software, you know, it's. It's probably the chief technology officer. If it's something that's going to affect the operational workflow, it's that COo, you know, or supply chain, something like that COo. If it's something that's fintech or RCM, at the end of the day, it's. It's probably that leader or the CFO, right? You have that other c level role and then overall you need management's decision. You know, depending on how big the lift is and the cost is, you know, you need that CEO or that board to also sign off. So you have typically have two to three parties in any given case that have to really sign off on this. And so my experience is, if you can be as transparent as you possibly can in the process of diligence, then do that.
I would tell folks to anticipate that they are going to compare you to other competitors. That is the way that they run these sort of fair vetting processes. So anticipate that and focus on your own differentiation.
And then thirdly, make sure that you're having those conversations with the right people, people at the right times that you haven't missed something. Right. It is great to develop an internal champion, to get that, whoever it happens to be that clinical leader or that other c letter singing your praises. That is important to help self promote your solution within their organization.
But in addition to that, you need the sign offs. You can't just skip a key sign off until the very end stage where this person is now being brought something new. But as part of your critical pathway to getting approval, that's a miss, right? So it's important to do that. And ultimately, at the end of the day, once you do have that approval for a pilot or an actual soft or hard launch, some sort of commercial sign off, it's super important that you make sure to have that high touch point, white glove experience for anybody touching your technology solution. Because in dentistry, you typically get one chance. And if they feel like it's too cumbersome to set up, or they feel like it's disruptive to the workflow, or they feel like it's not generating the values that it was supposed to be generating, it really rocks the boat with employee sentiment and satisfaction and bandwidth. And that's where we see a lot of workforce management problems, which is just too painful for an organization to risk. So you really have to make sure that implementation process is seamless.
[00:17:08] Speaker C: So turning to the broader industry, I am curious about that. The m and a landscape. Having kind of watched it for the last several years within the oral health industry. So how is revere partners kind of positioning itself to capitalize on these, the, you know, m and a kind of trends that are going on. And do you think it will kind of continue how it's been so accelerating in the last few years?
[00:17:35] Speaker D: Yeah, there's kind of two sides of the house here, if you will. One is the practices themselves, consolidating dental practices, which is somewhere around 27%, consolidating consolidated about 128, about roughly 120 private equity firms competing over them.
And definitely that trend continuing. And then there's also the technology side as well.
I think overall, what we're seeing is that the market is moving very fast. There is a lot of consolidation in general, meaning companies are merging together, companies are acquiring each other. Big, small, small to small, big to big. You're seeing a lot of that, you know, those. Those fragmented solutions or multiple parties joining forces effectively. You know, where it makes sense. On the DSO side of the house, you know, we have seen organizations kind of. They are still acquiring practices, but they are in a slower growth mode. I think 2024 will be about the same as 2023, if not a little more. I think there's some light at the end of the tunnel there, but largely 23, 24, maybe even some of the adjoining years are largely focused on optimizing the practices. So some of these technology companies, as a result, are starting to see a little bit more, I would say, reception among the dsos because they are really trying to, and taking out time that would otherwise be spent on very high growth mode, vetting and buying and incorporating new practices. They have switched a little bit of that bandwidth to instead optimize their current workflows and technology solutions.
So that is pulling through the practices consolidation rate and their trends on optimization. It is pulling through some of the trends that we're seeing on the dental technology side.
And so they are getting to a lot of new deals with dsos and new pilots. There are a lot of mergers happening there.
Our investment, it's hard for us to even keep up with the number of deals. There's more good deals than we can invest in right now.
So fundraising is always the biggest challenge.
Those would be some of the key.
[00:19:50] Speaker A: Trends that we're seeing when we talk about dental technology. It's a pretty broad term and we've touched on different categories. You mentioned clinical side and whatnot in regards to where you see a lot of activity, any. Any hot categories that you want to point out or that you feel strong about.
[00:20:10] Speaker D: Yeah, I think and it's broad, but workforce management, you know, some of that is the, you know, is going to be focused around the recruitment and also the attrition. Right. How do you retain these, these people? I think there's some basic workforce management issues that continue to plague dentistry like a lot of other healthcare spheres. Yeah. Huge topic remains a major Achilles heel for the industry.
And, you know, essentially there we're seeing, indeed isn't good enough.
Some of the solutions, the middle tier solutions and, you know, smaller solutions that are dental specific are really having to step up. So that's been interesting to watch.
I think everything revenue cycle management, we've seen, you know, major data breaches and hacks happen, you know, and even without that, just automating eligibility, insurance verification, reducing the time spent there, tracking basic tracking of a claim through its adjudication process, seeing what is actually posting and getting that posting process to be automated.
This category of RCM has, has long since had a lot of challenge and needs, needs new solutions.
So there's a lot of activity going on there.
We're seeing a lot come on in terms of interoperability, not just integration, how these technology companies speak to each other, but also the portability of now soon to be compliance with the Cures act and Odin portability of the electronic dental record, the patient's data and allowing them access to it. We see a lot going on in that interoperability space, which I think is a major milestone to overcome in terms of broader oral systemic health integration, especially from the software fintech angle. And we are seeing more and more of that. Lots of research coming out showing how oral health and systemic health are related through various disease processes, treatment modalities, diagnostic capabilities, lots coming out in oral systemic health. So I think that's another, another big category, too.
[00:22:22] Speaker A: Yeah, it's an incredibly exciting time in a lot of ways. I mean, there's a lot of challenges out there, but where there's challenges, there are opportunities. And like you said, there's a need for companies to come in with new, innovative ideas, products and services. So it's a pretty bright horizon, in my view.
I feel like we could talk to you, I could talk to you for hours, but unfortunately, we have a finite amount of time.
Before we wrap up, Doctor Krell, what would you like to share with our listeners about revere partners? Are there opportunities for investors to get involved? If so, how would they do that? What does that look like?
[00:23:02] Speaker D: Yeah, absolutely. And thank you for asking. Revere is, you know, continues to be open to investors.
Everybody has to be you know, accredited as an investor, but we have doctors who are angels, high net worth, individuals, family offices, funds, corporates who can invest in the revere fund.
So if that's something interesting, I would consider it against, you know, if you're investing in other types of, you know, low or high risk things, from mutual funds to cds to stocks and bonds and real estate and everything else you might be looking at, it is worth considering what the alternative assets look like and learning about them and how they work. And I think you'll find, you know, funds like us that are very focused in a specific niche, they're very risk mitigated. Right? It's not the same as a generalist VC fund investing in some of these oceans of technology. So if that's something that alternative asset, you know, investment class is interesting to you, encourage you to reach out. My email is Jeremy Jeremy at Revere partnersvcvictorcharlie.com. we're always happy to entertain those, those conversations and the other, you know, piece of feedback, you know, that I would leave is a, we're always accepting new startups, we're always open to, you know, looking at them from an investment perspective. And I think b, when you're selling to the, to kind of wrap it all up, when you're selling into the industry, whatever channel partner or scale partner that you're looking at from a DSO to a manufacturer, distributor, really break it down for them. There's a lot of buzzwords out there, there's a lot of one stop shops, there's a lot packed in to your technology. I'm sure in terms of functionality, they need bite sized bits to understand who you are and what you do at your core so that they can understand where it fits into their overall organization. So the easier you make it for them, the less barrier to entry I think you'll find for yourself. So I appreciate the opportunity and really enjoyed our conversation today.
[00:24:59] Speaker A: Likewise, thank you. And we'll put that information in our show notes. Doctor Kral, thank you again.
Love to have you back on the show at a future date and time and catch up again to see where the space is at and hear about all the new and exciting things that you're up to.
[00:25:16] Speaker D: Yeah, happy to do it. And likewise to you and to the truelar team. Best of luck.
[00:25:20] Speaker C: Thank you.
