February 26

Accelerating Growth: Transformative Strategies for a Healthcare Software as a Service Company


Ownership and Entrepreneurial Journey

Owned by its three founders, alongside more than 25 friends, family, and angel investors, this healthcare software as a service company navigated complex financial landscapes, including mergers and initial rounds of professional capital. Despite their entrepreneurial spirit, the founders faced concerns about limited exit options, having potentially cornered themselves with a single strategic investor.

Positioning for Rapid Market Expansion

Amidst a booming industry with imminent competition, the company recognized the need to solidify its market position and accelerate growth. With aspirations for shareholder liquidity and enhancing the equity stakes for both founders and key team members, the company sought strategic guidance to capitalize on favorable market trends without compromising critical alliances, especially with its strategic investors.

The Engagement: Crafting a Future-Proof Strategy

Step 1: Exploring Strategic Options

Tasked with evaluating strategic pathways, the company engaged Cadre to assess various growth strategies, ensuring alignment with their objectives of rapid expansion and stakeholder satisfaction.

Step 2: Comprehensive Due Diligence and Stakeholder Alignment

Through meticulous due diligence, Cadre identified potential barriers across strategic and private equity landscapes. The process revealed the founders’ challenges, including equity dilution, executive incentive expectations, and the patience of friends and family investors. Additionally, Cadre navigated the complexities arising from the founders’ “side businesses,” ensuring transparency and accountability.

Step 3: Implementing a Minority Recapitalization Strategy

After evaluating five distinct options, Cadre recommended pursuing minority recapitalization to fuel growth while meeting various stakeholder needs. This strategy was backed by an exhaustive analysis of market comparables, setting the stage for a targeted marketing plan to identify the ideal investor profile.

Results: A Landmark Transaction and Beyond

The strategy culminated in a transaction that not only provided the desired liquidity to shareholders but also injected the necessary capital for exponential growth. This strategic move not only increased the founders’ equity stakes but also ensured voting control remained with existing shareholders. Remarkably, within a year of the transaction, the company was acquired by a market leader at a valuation over 15 times higher than at the outset of Cadre’s engagement.

This case study exemplifies the transformative impact of strategic planning and capital infusion in the highly competitive healthcare software as a service sector. Through innovative strategies and meticulous execution, the company not only achieved rapid growth and stakeholder satisfaction but also navigated towards a highly successful exit, underscoring the power of strategic foresight in the healthcare SaaS domain.


Healthcare, SaaS

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