Jeremy Krell of Revere Partners: 5 Things I Need To See Before Making A VC Investment
An Interview With Jason Hartman
Your closet. Not how well organized you are. I want to know about the skeletons. You should be upfront. No surprises. No pending litigation. No massive debt or bad credit score.
As part of our series about “5 Things I Need To See Before Making A VC Investment” I had the pleasure of interviewing Jeremy Krell.
Jeremy Krell is the Managing Partner of Revere Partners, the first independent Venture Capital fund focused on oral health. Jeremy previously built out the Barchester Bay Group, a portfolio consisting of over 35 ventures, and has a 18+ year proven track record with startups through several successful multi-million dollar fundraises and acquisitions. Previously Jeremy has practiced general dentistry part-time for nearly a decade, sits on the Boards of healthcare and dental startups, and is an angel investor in approximately 30 companies.
Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you a bit. Can you please share with us the “backstory” behind what brought you to this specific career path?
It’s safe to say I’m not your average dentist, by any sense of the word. While I started off my career as a dentist by clinical training, and spent time practicing in our NJ offices, I’m truly a startup guy at heart. I’ve spent the last 18 years in startups, first in tech, then health technology (Oscar Health, which had an IPO in 2021), then had a significant role at quip, then my own family office investing, and eventually started my current venture, the first and only VC fund focused on oral health, Revere Partners. I have always loved to solve difficult problems with innovative solutions, and due to those early days of dentistry, I had a front row seat to seeing how dentistry was a very fragmented, antiquated industry, ripe for disruption.
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
“Getting to Yes” by Roger Fisher. This book is about advanced negotiations and used to be required at HBS — and was required at one of my startups in luxury goods and commodity services. There are six major guidelines:
Separate the people from the problem. …
Focus on interests, not positions. …
Learn to manage emotions. …
Express appreciation. …
Put a positive spin on your message. …
Escape the cycle of action and reaction.
I was in a sales role targeting Universities in that startup at the time of first reading it. That second rule, focusing on interests, served me well. It wasn’t about getting the President or COO to sit down to a meeting, it was about finding an internal champion whose job could be better achieved by working with us, for example the school’s external ranking could go up if student satisfaction was more highly rated and this often overcame other objections.
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
”The days are long, but the years are short,” which is commonly applied to parenting. I have young kids and they change in the blink of an eye. It also resembles startup life. Things move at lightning-fast speed, but you cannot afford to forget the valuable lessons and moments in the past.
How do you define “Leadership”? Can you explain what you mean or give an example?
Empowering other people to do their absolute best and getting out of the way. It’s all about people. If people grow, then the organization will grow. People need the tools and environment to succeed. They need to feel a part of a bigger cause. They need to be recognized as THE resource in the room for their areas of expertise.
How have you used your success to bring goodness to the world?
In a clinical career, you can see more than a couple of thousand patients per year if you’re productive. However, behind the scenes of startups in healthcare with large patient and/or provider bases, you can impact tens of thousands (or even millions) with a better or completely new solution. I’ve been lucky to be a part of many organizations that have had a social mission tied to the business; one that particularly stands out was quip, which donated in-kind oral care products to many in organizations and people in need: wildfires and natural disasters, Project Red, Charity Water, The ADA Foundation, Global Dental Relief, mission trips, and more.
Ok, thank you for that. Let’s now jump to the main part of our discussion. The United States is currently facing a very important self-reckoning about race, diversity, equality and inclusion. This is of course a huge topic. But briefly, can you share a few things that need to be done on a broader societal level to expand VC opportunities for women, minorities, and people of color?
I can point to RISE Health and its mission as the first and only inclusion driven VC fund in oral health. We recognized there are far fewer women-run startups/leaders/owners, and we know that women-run startups get less funding and lower valuations. The same things can often be said of LGBTQ, BIPOC, and other true minorities. There are lots of informative stats and findings on the Rise Health website: Risehealthvc.com. We need to recognize the problem and unlock the potential of these minds, as evidence clearly shows inclusive thinking yields better business outcomes.
Can you share a story with us about your most successful Angel or VC investment? What was its lesson?
Follow the trend and invest in what you know. I invested big in a DTC brand in a segment I knew very well. It was during the great rise of subscription-based businesses. I had conviction around the necessity of the product and confidence around how to put it into the target’s hand. You also need to know when to walk away and/or sell. Exponential growth doesn’t last forever. It has a ceiling. Eras end. The economy turns. You always want to sell on high growth and profitability. You don’t always get the perfect opportunity, but if and when you do, take it.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
I came into an ops heavy business. I thought I could get away with knowing the sector, even if not this type of business. I was wrong. I made it through the first pivot. Then we got some big strategic investors to come in alongside in the next round. This capital came with strings attached that didn’t align with the startup leadership. It was a big mistake and led to many people problems.
Can you share a story with us about a problem that one of your portfolio companies encountered and how you helped to correct the problem? We’d love to hear the details and what its lesson was.
One portfolio company created an awesome product that businesses loved. The founder was clinical (not practicing) and also a tech junky. They took on investors who gave them the best deal, and got to series A stage. Then the first-time founder colors started to show. There wasn’t enough financial discipline nor a mature planning process. The company found itself in a cash flow crisis on top of being at odds with its previous majority investor (who didn’t understand the industry at all). They had to find a perfectly complementary strategic investor to buy out the old investor, invest growth capital on top, and put in place a senior team and process. The lesson learned is to know who you’re getting into bed with and never be the smartest one in the room, especially your own rooms (your finance team should scare you with their knowledge and attention to detail).
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?
There are many, ha! That’s part of the process. Who thought Uber would take off?! I turned down a startup with the grandiose vision of redesigning the central software all of the businesses in the space use. Two distinct billion-dollar companies held 80% of the market share with many other sticky services and there were another three-to-five mid-sized competitors at least. The biggest red flag to me was that they wanted to be pretty close to open source out of the gate. I didn’t understand how they would ever maintain enough IP to sell the next customer. Fast forward a few years, they’re the #3 with significant market share and the most number of integrations, large clients, and customizations to be in the cloud. Lesson learned is you have to have vision! Too big isn’t a problem if you have a reasonably achievable well-researched pathway. Open source isn’t an issue if you continuously improve and add value to your product building interest and increasing engagement in the next gen and use open source on the APIs to integrate.
Super. Here is the main question of this interview. What are your “5 things I need to see before making a VC investment” and why. Please share a story or example for each.
I’m going to do this from the opposite POV. The 5 things that kill a startup, therefore I need to before making a VC investment:
- People problems kill deals. People, you’re really investing in people. Their backgrounds have to mesh well with what they’re trying to do. I have to like them. I need to understand their motivation, how they lead, how they think so that I know they can weather a storm. The team needs to be committed, respect each other, work well together, and have a clear delineation of accountability. Find people that are coachable and receptive to feedback.
- Failure to build a product people actually want. I need to see validation. It doesn’t have to be total revenue, but some traction or engagement that makes me believe there’s demand. It starts with iteratively designing it to the buyers’ needs rather than developing in a vacuum.
- Price delusions. What you think your product is worth is irrelevant. The product is worth what the market is willing to pay. You need to do some pricing strategy research.
- Financial disarray. Not just the homework and past track record. Show me you know how to manage money (have a good amount in hand) and know how to stretch the dollar (run a lean team that can reach profitability quickly). Have processes in place that can withstand an audit.
- Your closet. Not how well organized you are. I want to know about the skeletons. You should be upfront. No surprises. No pending litigation. No massive debt or bad credit score.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
Integrate dental care into medical care. Promote groundbreaking technology in oral health that drives better hygiene products, and changes habits. This can impact a ton of people! Most dental problems are entirely preventable. Periodontitis impacts over 50% of Americans and over 70.1% over the age of 65. Using precision medical treatments and even basic compliance can arrest this issue. The link to Alzheimer’s and other disorders can be alleviated as well.
Also, bring DEI into the leadership and ownership of startups in healthcare, including dentistry. Businesses do better. We aren’t using our talent.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this. :-)
100% Roger Federer. He’s a strategic artist. He outsmarts competitors. He paints the lines with each shot. All while staying incredibly calm and collected, no matter the stakes. He also knew when to walk away, his body could no longer take it, so he changed. I also have huge respect for Serena Williams who not only overcame so many barriers to play tennis, not only became the greatest of all time, and not only walked away when her time came, but pivoted into VC!
This was really meaningful! Thank you so much for your time.
