To launch Orthobrain, a consulting and education platform that teaches general dental practitioners how to deliver orthodontic care, founder and CEO Dan German had to make significant changes.
Around 2016, he sold his successful practice, German Orthodontics, which he calls one of the largest privately held Orthodontics practices in the country, some real estate and his house in Dayton (moving he and his family to Cleveland), and used $2 million from the proceeds as the seed money. He thought, he says, that that money would enable him to build the venture into a global company.
"And I was wrong," he says.
Fortunately, along the way, he met some investors in the Cleveland who checked in on his progress with Orthobrain.
"They would continue to ask if we needed any capital," he says. "Eventually, I waved the white flag and I said, 'You're right. We need money.'"
A group of angel investors pledged $1 million for a priced equity round. Then the virus took hold. Before any money transferred, governors across the country shut all of dentistry down. As business paused, so did his funds — both from the investors and clients.
"All the dental offices that we sell into were closed. So, we had no money coming in from investors or from our clients," he says. "But it opened up a door."
What happened, he says, was that industry-wide, CEOs of industry companies that are related to Orthobrain reached out and they engaged with the business, which led German to sign some really big contracts while the business was shut down.
"That really changed the whole dynamic because it's such a small operation with just a few of us, I could either go out and capital raise or I could nurture and build these accounts," he says. "I chose to build the accounts and delayed the capital raise, which meant that I ended up funding the company another million dollars. So, in summary, I'd say that the capital raise took a lot longer than we anticipated."
This year, the company received $9 million in fundraising led by CareCapital and joined by Jumpstart NEXT II Fund and JobsOhio, among others.
"We're really grateful to have that money in hand," German says. "It really takes a little bit of pressure off the capital raise and allows us to focus on building the business."
German spoke on the Smart Business Dealmakers Podcast about launching Orthobrain, fundraising, and how the lessons he learned growing and selling German Orthodontics are informing his new venture. Hit play to catch the full interview.
