Praveen Ghanta graduated from MIT with degrees in computer science and economics and worked for various financial services companies after trying his hand at a software startup. Working in his spare time, he built a product and recruited a friend to help sell it. After trying to sell it to different types of financial services companies, they finally found a valuable use case with individual wealth managers to help them sell new clients. They quit their jobs and launched HiddenLevers.
HiddenLevers was a stock portfolio and financial risk management software that helped financial advisors show their clients the potential impact of outside events on their investments. Despite being bootstrapped and profitable, the company grew steadily to $8M ARR with 25 employees by selling to larger wealth management companies and solving bigger problems.
Orion Advisor Solutions acquired the company in March 2021 for a strategic valuation of 16X revenues. HiddenLevers is now Orion Risk Intelligence. After helping the acquisition transition, Praveen started Fraction to help software companies hire senior developers looking for ongoing fractional engagements.
Topics Discussed on This Podcast
- Why he started HiddenLevers as a fractional founder to build the software before quitting his day job
- How they built a product first and tried selling it to many different customer types before finding a customer segment who were very interested
- Why they raised their prices 5X and then moved upmarket to maximize revenue and fund their business with sales
- Why they chose not to raise outside funding and instead took substantial profits as they grew
- Why Praveen and his cofounder decided to sell their business and why they enlisted help from an investment banker to shop it
Quote from Praveen Ghanta
“The startup ecosystem tells you that you’ve got to be “all in” as a startup founder. I push back on that and say, No. I think it’s perfectly acceptable to explore a business idea on the side as a side hustle, or fractionally. as we say.
“I think that’s perfectly appropriate to be a fractional founder in the early days when you don’t yet have product market fit and you don’t yet know who your customers are.
“Just as the VCs don’t put all their eggs in one basket with their investments. Do you really need to go all in yourself when you are just starting to test ideas?”
Links
- Praveen Ghanta on LinkedIn
- Orion Risk Intelligence website (formerly HiddenLevers)
- Profit 101 series of blog posts
