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Sep 18, 2017 · 20m · top-founders

786: How This Ad Tech Company Used $1m+ In Mezzanine Debt to Grow Profitably

Mitchell Reichgut · 9m spoken Nathan Latka · 9m spoken
0:00 / 0:00

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In this episode of The Top, host Nathan Latka interviews Mitchell Reichgut, CEO of Jun Group, exploring how the ad tech company scaled to 75 employees and consistent profitability through non-interruptive mobile video ads, mezzanine debt financing, and disciplined capital allocation.

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% of the talking time here. How this is scored →

Nathan as informed peer 3.4 Guest teaching 3.0 Guest disagreement 1.8 Nathan pushing back 2.8
05100:0010:0020:000:00–2:05 · Nathan as informed peer 0/10 Episode Preview: Jun Group's Profitable Growth Journey This is an introductory monologue and promotional segment hosted entirely by Nathan Latka with no live guest interaction. As specified, monologue segments receive zero across all scores.2:05–8:39 · Nathan as informed peer 4/10 Introducing Mitchell Reichgut and the Mission of Jun Group Nathan probes how Jun Group operates compared to standard video ads on platforms like Hulu. Mitchell explains their non-interruptive mobile SDK model and clarifies the distinction between CPMs and cost-per-completed-view engagement pricing.8:41–13:04 · Nathan as informed peer 5/10 Strategic Private Equity Financing, Industry Profitability, and Pricing Dynamics Nathan repeatedly attempts to pin down Jun Group's exact profit margins and cut of ad spend. Mitchell resists sharing proprietary numbers, gently pushing back while correcting Nathan on the difference between an ad agency and an ad tech platform.13:04–18:00 · Nathan as informed peer 6/10 Early Origins, Mezzanine Debt Financing with WTI, and Scale Mitchell outlines how utilizing mezzanine debt from Western Technology Investment allowed them to grow profitably without early equity dilution. Nathan shows financial expertise by deducting that the $28M private equity round sits in the bank as a strategic partnership cushion rather than burn capital.18:01–20:46 · Nathan as informed peer 2/10 HostGator Web Hosting Sponsorship and Exclusive Listener Promotion A standard sponsor read for HostGator followed by the fast-paced Famous Five wrap-up questions and closing outro, maintaining a cooperative and amicable tone.0:00–2:05 · Guest teaching 0/10 Episode Preview: Jun Group's Profitable Growth Journey This is an introductory monologue and promotional segment hosted entirely by Nathan Latka with no live guest interaction. As specified, monologue segments receive zero across all scores.2:05–8:39 · Guest teaching 5/10 Introducing Mitchell Reichgut and the Mission of Jun Group Nathan probes how Jun Group operates compared to standard video ads on platforms like Hulu. Mitchell explains their non-interruptive mobile SDK model and clarifies the distinction between CPMs and cost-per-completed-view engagement pricing.8:41–13:04 · Guest teaching 5/10 Strategic Private Equity Financing, Industry Profitability, and Pricing Dynamics Nathan repeatedly attempts to pin down Jun Group's exact profit margins and cut of ad spend. Mitchell resists sharing proprietary numbers, gently pushing back while correcting Nathan on the difference between an ad agency and an ad tech platform.13:04–18:00 · Guest teaching 4/10 Early Origins, Mezzanine Debt Financing with WTI, and Scale Mitchell outlines how utilizing mezzanine debt from Western Technology Investment allowed them to grow profitably without early equity dilution. Nathan shows financial expertise by deducting that the $28M private equity round sits in the bank as a strategic partnership cushion rather than burn capital.18:01–20:46 · Guest teaching 1/10 HostGator Web Hosting Sponsorship and Exclusive Listener Promotion A standard sponsor read for HostGator followed by the fast-paced Famous Five wrap-up questions and closing outro, maintaining a cooperative and amicable tone.0:00–2:05 · Guest disagreement 0/10 Episode Preview: Jun Group's Profitable Growth Journey This is an introductory monologue and promotional segment hosted entirely by Nathan Latka with no live guest interaction. As specified, monologue segments receive zero across all scores.2:05–8:39 · Guest disagreement 2/10 Introducing Mitchell Reichgut and the Mission of Jun Group Nathan probes how Jun Group operates compared to standard video ads on platforms like Hulu. Mitchell explains their non-interruptive mobile SDK model and clarifies the distinction between CPMs and cost-per-completed-view engagement pricing.8:41–13:04 · Guest disagreement 4/10 Strategic Private Equity Financing, Industry Profitability, and Pricing Dynamics Nathan repeatedly attempts to pin down Jun Group's exact profit margins and cut of ad spend. Mitchell resists sharing proprietary numbers, gently pushing back while correcting Nathan on the difference between an ad agency and an ad tech platform.13:04–18:00 · Guest disagreement 2/10 Early Origins, Mezzanine Debt Financing with WTI, and Scale Mitchell outlines how utilizing mezzanine debt from Western Technology Investment allowed them to grow profitably without early equity dilution. Nathan shows financial expertise by deducting that the $28M private equity round sits in the bank as a strategic partnership cushion rather than burn capital.18:01–20:46 · Guest disagreement 1/10 HostGator Web Hosting Sponsorship and Exclusive Listener Promotion A standard sponsor read for HostGator followed by the fast-paced Famous Five wrap-up questions and closing outro, maintaining a cooperative and amicable tone.0:00–2:05 · Nathan pushing back 0/10 Episode Preview: Jun Group's Profitable Growth Journey This is an introductory monologue and promotional segment hosted entirely by Nathan Latka with no live guest interaction. As specified, monologue segments receive zero across all scores.2:05–8:39 · Nathan pushing back 3/10 Introducing Mitchell Reichgut and the Mission of Jun Group Nathan probes how Jun Group operates compared to standard video ads on platforms like Hulu. Mitchell explains their non-interruptive mobile SDK model and clarifies the distinction between CPMs and cost-per-completed-view engagement pricing.8:41–13:04 · Nathan pushing back 6/10 Strategic Private Equity Financing, Industry Profitability, and Pricing Dynamics Nathan repeatedly attempts to pin down Jun Group's exact profit margins and cut of ad spend. Mitchell resists sharing proprietary numbers, gently pushing back while correcting Nathan on the difference between an ad agency and an ad tech platform.13:04–18:00 · Nathan pushing back 4/10 Early Origins, Mezzanine Debt Financing with WTI, and Scale Mitchell outlines how utilizing mezzanine debt from Western Technology Investment allowed them to grow profitably without early equity dilution. Nathan shows financial expertise by deducting that the $28M private equity round sits in the bank as a strategic partnership cushion rather than burn capital.18:01–20:46 · Nathan pushing back 1/10 HostGator Web Hosting Sponsorship and Exclusive Listener Promotion A standard sponsor read for HostGator followed by the fast-paced Famous Five wrap-up questions and closing outro, maintaining a cooperative and amicable tone.

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

0:00 · Nathan 97.7% · guest 2.3%0:00 · Nathan 97.7% · guest 2.3%3:00 · Nathan 29.6% · guest 70.4%3:00 · Nathan 29.6% · guest 70.4%6:00 · Nathan 32.1% · guest 67.9%6:00 · Nathan 32.1% · guest 67.9%9:00 · Nathan 33% · guest 67%9:00 · Nathan 33% · guest 67%12:00 · Nathan 30.1% · guest 69.9%12:00 · Nathan 30.1% · guest 69.9%15:00 · Nathan 47.4% · guest 52.6%15:00 · Nathan 47.4% · guest 52.6%18:00 · Nathan 75% · guest 25%18:00 · Nathan 75% · guest 25%
Sharpest disagreement ▶ 11:28 Mitchell refuses to reveal revenue cut percentages

When Nathan tries to rephrase his question about Jun Group's cut of ad spend, Mitchell calls out the rephrasing and explicitly refuses to disclose exact financial metrics.

 Hardest push from Nathan ▶ 12:24 Nathan demands absolute numbers on CPM pricing

Nathan interrupts Mitchell's abstract explanation of expensive asks to demand concrete dollar amounts per thousand impressions.

 Biggest teaching moment ▶ 10:20 Mitchell corrects agency categorization and critiques VC ad tech models

Mitchell clarifies that Jun Group is an ad tech platform rather than an agency and explains why venture-funded competitors struggle with profitability.

 Nathan holds their own ▶ 17:37 Nathan analyzes the capital dynamics of a profitable PE raise

Nathan articulates the exact financial reality of raising $28M while remaining cash-flow positive, proving his strong grasp of corporate capitalization.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Episode Preview: Jun Group's Profitable Growth Journey 0000 This is an introductory monologue and promotional segment hosted entirely by Nathan Latka with no live guest interaction. As specified, monologue segments receive zero across all scores.
Introducing Mitchell Reichgut and the Mission of Jun Group 4523 Nathan probes how Jun Group operates compared to standard video ads on platforms like Hulu. Mitchell explains their non-interruptive mobile SDK model and clarifies the distinction between CPMs and cost-per-completed-view engagement pricing.
Strategic Private Equity Financing, Industry Profitability, and Pricing Dynamics 5546 Nathan repeatedly attempts to pin down Jun Group's exact profit margins and cut of ad spend. Mitchell resists sharing proprietary numbers, gently pushing back while correcting Nathan on the difference between an ad agency and an ad tech platform.
Early Origins, Mezzanine Debt Financing with WTI, and Scale 6424 Mitchell outlines how utilizing mezzanine debt from Western Technology Investment allowed them to grow profitably without early equity dilution. Nathan shows financial expertise by deducting that the $28M private equity round sits in the bank as a strategic partnership cushion rather than burn capital.
HostGator Web Hosting Sponsorship and Exclusive Listener Promotion 2111 A standard sponsor read for HostGator followed by the fast-paced Famous Five wrap-up questions and closing outro, maintaining a cooperative and amicable tone.

Statements from this episode (7)

Assertion Partly supported
90% of mobile time is spent inside apps, primarily games
“90% of the time that all of us spend on a mobile device is in an app, and most of those apps are games.”
Mitchell Reichgut Sep 18, 2017 ▶ 4:38
Disclosure
Jun Group achieves 90%+ completion on 30-second opt-in video ads
“So we get 90 some odd percent of people watching to the end of a 32nd spot and three to five percent of those people visiting the brand's website or taking a social action afterwards, which is stellar.”
Mitchell Reichgut Sep 18, 2017 ▶ 6:08
Assertion Contradicted
Mobile app developers pay $7 to $8 for every app download
“App developers pay seven or eight dollars just for every single user that downloads that app, so they're precious.”
Mitchell Reichgut Sep 18, 2017 ▶ 7:43
Disclosure
Jun Group bootstrapped until a 2015 private equity deal with Halyard
“We bootstrapped this thing all the way until 2015 when we finally did a, not a VC deal, but a private equity deal with a company called Halliard Capital.”
Mitchell Reichgut Sep 18, 2017 ▶ 8:41
Opinion
Most ad tech platforms lose money chasing VC-fueled acquisition growth
“Frankly, most of them lose money. You know, and you'll, you're reading a lot of layoffs and stuff in ad tech. That's because a lot of them signed up with a venture capital fund wanted to grow really fast and sell it. And so there was never profit built into th…”
Mitchell Reichgut Sep 18, 2017 ▶ 10:31
Assertion Not checkable as stated
Jun Group charges above a premium $20 CPM for engagement ads
“I would say in the industry, a 20 dollar CPM is a premium high CPM. Okay. And we tend to be a little higher than those CPMs because it's an engagement.”
Mitchell Reichgut Sep 18, 2017 ▶ 12:54
Disclosure
Jun Group raised early-stage mezzanine debt from WTI to scale
“I should mention that we had a wonderful partner in those years or shortly after they're called WTI, Western Technology Investment that we did a round of mezzanine debt, and that really helped us get through the early years and ramp up.”
Mitchell Reichgut Sep 18, 2017 ▶ 15:47
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