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May 23, 2019 · 15m · top-founders

1398 How Limelight Is Shifting to More SaaS Revenue, $5m Currently

Jason Andrew · 7m spoken Nathan Latka · 6m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top Entrepreneurs Podcast, Limelight Health co-founder Jason Andrew breaks down how the InsurTech platform grew to $5 million in SaaS ARR, managed a hybrid services-to-subscription business model, raised $11 million in capital, and scaled a 100-person remote team.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 49.5% of the talking time here. How this is scored →

Nathan as informed peer 4.2 Guest teaching 1.8 Guest disagreement 1.6 Nathan pushing back 2.8
05100:0010:000:00–2:45 · Nathan as informed peer 0/10 SaaStock East Coast Conference Announcement and Discount Solo host intro and promotional announcement for SaaStock East Coast. As a monologue segment, all interaction scores are zero.2:46–5:28 · Nathan as informed peer 5/10 Introducing Jason Andrew and SaaS Revenue Transition Latka explores Limelight's business model, breaking down the 60/40 services-to-SaaS split and distinct ARPU metrics across broker and enterprise tiers.5:28–8:50 · Nathan as informed peer 6/10 Team Composition, Company History, and Capital Raised Latka questions the target valuation and dilution mechanics of raising $30M on a $50M pre-money valuation. A brief tension arises when Andrew implies Latka is over-indexing on valuation, prompting Latka to firmly clarify his stance on terms.8:50–12:53 · Nathan as informed peer 6/10 Customer Traction, SaaS MRR Growth, and System Integration Latka attempts to calculate revenue from customer counts, but Andrew clarifies their exact MRR and growth pace. Latka drills into payback periods and logo churn definitions.12:53–14:43 · Nathan as informed peer 4/10 Hypothetical Acquisition Scenario and Exit Considerations Latka tests Andrew's willingness to sell the company at $50M, followed by the standard Famous Five rapid-fire questions.0:00–2:45 · Guest teaching 0/10 SaaStock East Coast Conference Announcement and Discount Solo host intro and promotional announcement for SaaStock East Coast. As a monologue segment, all interaction scores are zero.2:46–5:28 · Guest teaching 2/10 Introducing Jason Andrew and SaaS Revenue Transition Latka explores Limelight's business model, breaking down the 60/40 services-to-SaaS split and distinct ARPU metrics across broker and enterprise tiers.5:28–8:50 · Guest teaching 3/10 Team Composition, Company History, and Capital Raised Latka questions the target valuation and dilution mechanics of raising $30M on a $50M pre-money valuation. A brief tension arises when Andrew implies Latka is over-indexing on valuation, prompting Latka to firmly clarify his stance on terms.8:50–12:53 · Guest teaching 3/10 Customer Traction, SaaS MRR Growth, and System Integration Latka attempts to calculate revenue from customer counts, but Andrew clarifies their exact MRR and growth pace. Latka drills into payback periods and logo churn definitions.12:53–14:43 · Guest teaching 1/10 Hypothetical Acquisition Scenario and Exit Considerations Latka tests Andrew's willingness to sell the company at $50M, followed by the standard Famous Five rapid-fire questions.0:00–2:45 · Guest disagreement 0/10 SaaStock East Coast Conference Announcement and Discount Solo host intro and promotional announcement for SaaStock East Coast. As a monologue segment, all interaction scores are zero.2:46–5:28 · Guest disagreement 1/10 Introducing Jason Andrew and SaaS Revenue Transition Latka explores Limelight's business model, breaking down the 60/40 services-to-SaaS split and distinct ARPU metrics across broker and enterprise tiers.5:28–8:50 · Guest disagreement 3/10 Team Composition, Company History, and Capital Raised Latka questions the target valuation and dilution mechanics of raising $30M on a $50M pre-money valuation. A brief tension arises when Andrew implies Latka is over-indexing on valuation, prompting Latka to firmly clarify his stance on terms.8:50–12:53 · Guest disagreement 2/10 Customer Traction, SaaS MRR Growth, and System Integration Latka attempts to calculate revenue from customer counts, but Andrew clarifies their exact MRR and growth pace. Latka drills into payback periods and logo churn definitions.12:53–14:43 · Guest disagreement 2/10 Hypothetical Acquisition Scenario and Exit Considerations Latka tests Andrew's willingness to sell the company at $50M, followed by the standard Famous Five rapid-fire questions.0:00–2:45 · Nathan pushing back 0/10 SaaStock East Coast Conference Announcement and Discount Solo host intro and promotional announcement for SaaStock East Coast. As a monologue segment, all interaction scores are zero.2:46–5:28 · Nathan pushing back 2/10 Introducing Jason Andrew and SaaS Revenue Transition Latka explores Limelight's business model, breaking down the 60/40 services-to-SaaS split and distinct ARPU metrics across broker and enterprise tiers.5:28–8:50 · Nathan pushing back 5/10 Team Composition, Company History, and Capital Raised Latka questions the target valuation and dilution mechanics of raising $30M on a $50M pre-money valuation. A brief tension arises when Andrew implies Latka is over-indexing on valuation, prompting Latka to firmly clarify his stance on terms.8:50–12:53 · Nathan pushing back 4/10 Customer Traction, SaaS MRR Growth, and System Integration Latka attempts to calculate revenue from customer counts, but Andrew clarifies their exact MRR and growth pace. Latka drills into payback periods and logo churn definitions.12:53–14:43 · Nathan pushing back 3/10 Hypothetical Acquisition Scenario and Exit Considerations Latka tests Andrew's willingness to sell the company at $50M, followed by the standard Famous Five rapid-fire questions.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 97.2% · guest 2.8%0:00 · Nathan 97.2% · guest 2.8%3:00 · Nathan 26% · guest 74%3:00 · Nathan 26% · guest 74%6:00 · Nathan 41.2% · guest 58.8%6:00 · Nathan 41.2% · guest 58.8%9:00 · Nathan 36.8% · guest 63.2%9:00 · Nathan 36.8% · guest 63.2%12:00 · Nathan 35.4% · guest 64.6%12:00 · Nathan 35.4% · guest 64.6%15:00 · Nathan 95.5% · guest 4.5%15:00 · Nathan 95.5% · guest 4.5%
Sharpest disagreement ▶ 7:51 Guest challenges host's emphasis on valuation

Andrew attempts to reframe Latka's line of questioning by remarking that companies place too much focus on raw valuation figures.

 Hardest push from Nathan ▶ 8:00 Host rejects guest putting words in his mouth

Latka cuts in immediately to reject Andrew's characterization, emphasizing that deal terms can ruin a founder despite a high headline valuation.

 Biggest teaching moment ▶ 9:04 Guest corrects host's revenue calculation

When Latka calculates an estimated $540k/month from broker figures, Andrew clarifies their actual SaaS MRR run rate is $420k/month across all accounts.

 Nathan holds their own ▶ 7:28 Host points out heavy dilution math

Latka immediately calculates the ownership stake implications, noting that taking $30M on a $50M pre-money valuation means giving up over 35% of the company.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
SaaStock East Coast Conference Announcement and Discount 0000 Solo host intro and promotional announcement for SaaStock East Coast. As a monologue segment, all interaction scores are zero.
Introducing Jason Andrew and SaaS Revenue Transition 5212 Latka explores Limelight's business model, breaking down the 60/40 services-to-SaaS split and distinct ARPU metrics across broker and enterprise tiers.
Team Composition, Company History, and Capital Raised 6335 Latka questions the target valuation and dilution mechanics of raising $30M on a $50M pre-money valuation. A brief tension arises when Andrew implies Latka is over-indexing on valuation, prompting Latka to firmly clarify his stance on terms.
Customer Traction, SaaS MRR Growth, and System Integration 6324 Latka attempts to calculate revenue from customer counts, but Andrew clarifies their exact MRR and growth pace. Latka drills into payback periods and logo churn definitions.
Hypothetical Acquisition Scenario and Exit Considerations 4123 Latka tests Andrew's willingness to sell the company at $50M, followed by the standard Famous Five rapid-fire questions.

Statements from this episode (15)

Disclosure
Limelight Health's revenue is 60% services and 40% recurring SaaS
“We're at 6040 right now. So 60 60% of service and 40% of revenue recurring. That's increasing, you know, every month.”
Jason Andrew May 23, 2019 ▶ 3:30
Insight
Insurance software firms typically operate at 60% SaaS and 40% services
“They're probably 60 SAS and 40 services. And that's the way this industry really works for bigger companies.”
Jason Andrew May 23, 2019 ▶ 3:48
Assertion Supported
Brokers drive 80% of small business employee benefits
“Typically about 80% of that business is driven by a broker selling to an employer.”
Jason Andrew May 23, 2019 ▶ 4:07
Disclosure
Limelight charges up to $100,000 per month for enterprise deployments
“In our broker channel they're paying about 1800 dollars per month. Roughly if it's just one license, it's about a hundred dollars a month. But typically we've got multiple users there in our enterprise deployments it's closer between 80 to a 100,000 dollars a …”
Jason Andrew May 23, 2019 ▶ 4:40
Disclosure
Limelight's enterprise sales cycle is 12 to 16 months
“Most of our focus on our enterprise business. And those are longer sales cycles and you know, somewhere between 12 and 16 months in terms of sales cycle.”
Jason Andrew May 23, 2019 ▶ 5:15
Assertion Not checkable as stated
Limelight Health employs approximately 100 people
“Oh, we've got about a hundred people today.”
Jason Andrew May 23, 2019 ▶ 6:06
Assertion Contradicted
Limelight Health has raised just shy of $11 million
“Just shy of eleven million.”
Jason Andrew May 23, 2019 ▶ 6:30
Disclosure
Limelight Health is targeting a $30M funding round
“About thirty million.”
Jason Andrew May 23, 2019 ▶ 7:13
Disclosure
Limelight expects a $50M to $100M valuation for its next round
“I look at, I mean, somewhere between the low end, 50 and the high end, a hundred million. So, you know, if you talk about rainbow, a hundred million.”
Jason Andrew May 23, 2019 ▶ 7:23
Assertion Not checkable as stated
Limelight serves 300 broker firms including six top-10 US brokerages
“So right now in our broker channel, we've got about 300 different independent and regional national broker firms, six of the top 10 in the U S are using my light.”
Jason Andrew May 23, 2019 ▶ 8:53
Assertion Not checkable as stated
Limelight Health generates $420,000 per month in SaaS MRR
“Right now with all the bookings for ARR sorry, with MRR, we're doing about 420,000 a month.”
Jason Andrew May 23, 2019 ▶ 9:19
Assertion Not checkable as stated
Limelight grew SaaS MRR from $50K to $400K in 18 months
“So January of 2017, we're at 50,000. January of this year, we were 200,000. As of July, we were 400,000.”
Jason Andrew May 23, 2019 ▶ 10:20
Assertion Not checkable as stated
Limelight's CAC payback on regional brokers is under 12 months
“With the regionals and independents, it's definitely within 12 months.”
Jason Andrew May 23, 2019 ▶ 11:22
Assertion Not checkable as stated
Annual logo churn on Limelight's broker side is under 3%
“So it's, you know, probably around less than three percent on the broker side.”
Jason Andrew May 23, 2019 ▶ 11:53
Assertion Not checkable as stated
Limelight Health has experienced zero enterprise customer churn to date
“On the enterprise side. We've had zero churn today.”
Jason Andrew May 23, 2019 ▶ 11:58
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