He Sold His First Business For $1.6 Billion And Now Raised $300 Million To Simplify How Medical Information Is Shared
Dan Cane has scored one of the best first exits ever, and is now onto his second startup, which has raised hundreds of millions of dollars to serve the healthcare space.
Ever since he was five years old, Dan Cane was an entrepreneur. He hustled from his front yard in South Florida, and has gone on to build transformative companies in education and healthcare technology.
In our recent interview on the Dealmakers Podcast, Dan shared his journey, his unique take on building a company, staying humble, the process of raising funds, and many more topics. Young Hustles
Ever since he can remember Dan was fascinated by problem solving and commerce. He actually calls his lemonade stand his first startup. He even got as creative as to simply sell the packets of Crystal Light, instead of going through all the pain of adding water and ice. It was a sweet business, considering his parents were supplying the inventory for free.
According to Dan entrepreneurs are those who have an eye for inefficiencies around them. Then they also have the drive to actually change things. Edtech
Dan’s mom was a teacher and his father a physician. They met at Cornell. So, Dan was given the choice of attending any college he wanted to, as long as it was Cornell too.
He studied applied economics, and found the program there very practical and easy to apply, instead of just learning theory. The internet wasn’t yet being used in the classrooms. That bothered him. So, he changed that.
He teamed up with his housemates, who were the only people he could find to work for free. They were inspired by the fact that if their plan worked, they could upgrade their kegs of terrible discount beer to something slightly better. They launched CourseInfo. It took off like wildfire. They began building websites for different courses and scaling to hundreds of programs. They changed education in a way that hadn’t been done in a long time. Dan says that while he may have been a good innovator and technologist, he recognized his lack of business experience. That turned into a merger with KPMG, who had the brand awareness, industry know-how, and mature reputation.
The company was then renamed to Blackboard, and they went out to raise capital. A billion dollar company was created in the process. Raising Capital
One of the most pressing questions founders have to answer is whether you’d rather have a small percentage of a much bigger company or a big percentage of a smaller company? Dan Cane says it’s a tradeoff. In hindsight he recognizes how dilutive their fundraising spree was. They marched from a Series A, all the way through F. Yet, in contrast to many unicorn startups today, they were careful to ratchet up the spend and the revenue and get to a new plateau of sustainability with each round. He says if you need to move fast then not having the capital is a risk, and money can help you overcome a lot of obstacles. If you have the luxury of time and crave more control, then you may be slower to raise funds and dilute your position. Blackboard went public, and was then bought by private equity firm Providence Equity.
Then moving from elearning to medicine, Dan’s newest venture found they were trying to raise in the midst of a financial crisis. Their initial capital ended up coming from a completely unexpected angle. When they began asking their beta customers if they would provide references to potential VCs, those customers not only said they would be delighted, but asked if they could invest and wanted to be ambassadors to tell others about how great the product was. They started offering checks for $100k, $200k and $500k. He says, if your users are willing to not only say, "Charge me for the software but can I invest in the company" then you're really onto something. They’ve now clocked up around $300 million in funding from Warburg Pincus, Summit Partners, Sands Capital Ventures, and IBM. Why You Should Always Listen To Your Wife After leaving Blackboard, Cane made his way back to Florida. After two weeks of hanging around the house, trying to be a good husband and father, his wife and kids told him, "You need to go get a job. You're driving us crazy." However, they stipulated since it had been so long since he had seen a doctor for a check up, he could go start whatever company he wanted, as long as he got the checkup.
He did, and in a fantastic turn of fate, one of his doctors became his new cofounder for his new company, Modernizing Medicine. They have created at Modernizing Medicine, the Electronic Medical Assistant, a cloud-based, specialty-specific electronic medical record system.
Modernizing Medicine is taking on healthcare in a big way. It’s a multi-trillion dollar industry. They have already built a team of 800 to do it, but are still hiring. Listen to the full podcast episode to find out more, including:
How Dan makes customer delight a part of their DNA · The benefit of building new companies in tough times · What you should do instead of chasing an exit · His top piece of advice for founders venturing into their own startups
