VI

Vital Financial Model

Three modules, each sold as an add-on tier:

1. ERAdvisor (Patient) - no-download web app delivered via SMS at registration; AI-powered wait times, multi-lingual, labs/imaging education, family sharing, follow-up scheduling. Deployed at 60+ hospitals.
2. ED Follow-Up AI - post-discharge AI that stratifies patients by value (high → human call, medium → automated, low → SMS) to capture new patient revenue. Deployed at 10 hospitals.
3. Clinical - lite mobile EHR, AI alerts (admission likelihood, readmission risk, missed billing). Trial at 2 hospitals.

Core pitch: ED is treated as a cost center; Vital turns it into a retention and revenue engine for the health system.

• 5,250 EDs in the US.
• 140M ED visits/yr in the US, increasing.
• ~$2,000 avg visit cost → $300B total ED spend = 25% of all US hospital spend.
• 40% of ED patients are new to the health system; 70% of all hospital admits and 70% of new diagnoses originate in the ED.
• ~60% of US market can be reached without hospital IT involvement (via existing EHR/ADT connectivity partners: Redox, CollectiveMedical, PatientPing, Audacious Inquiry).
• SAM (no-IT-required): ~3,150 EDs.
• SOM stated: 480+ hospitals (9% of US market) via expansion of existing health system relationships.
• No explicit TAM/SAM dollar figures in deck beyond ED spend context.

• Pricing tiers (per facility per month):
• Tier 0 - Free (3-month trial): $0/facility/mo
• Tier 1 - ERAdvisor: $5k/facility/mo ($60k/yr)
• Tier 2 - ERAdvisor + ED Follow-Up AI: $10k/facility/mo ($120k/yr)
• Tier 3 - Full suite (eventual): ~$500k/yr/facility
• Average ACV today: ~$100k/hospital.
• Billing: monthly per facility.
• Sales motion: pilot (free, 3 months) → paid contract → upsell additional modules.
• Sales cycle compressed to 2–4 months (from industry standard 12–18 months) via no-IT-required deployment.
• Channel: direct enterprise sales to health systems; leverages existing EHR integrations.

• Hospitals: 67 hospitals, 13 health systems.
• Hospital count by month (Nov–Mar): ~5 → ~11 → ~12 → ~38 → ~60.
• Of ~60 in Mar: ~19 contracted (green), ~41 pilots started (blue).
• Expansion pipeline: 480+ hospitals across existing health system relationships (UPMC 40 total, Ascension 150, Tenet 65, AdventHealth 50, Emory 6, etc.).
• Patient volume: 250k patients + family/yr now; ~400k/yr end Q2 '21; ~1M+/yr end Q4 '21.
• Adoption rate: 50–60% of patients with mobile numbers use the product (64%, 57%, 58%, 51% across four Emory EDs).
• Revenue at Emory (4 EDs): $7M+ in new revenue attributed to Vital; $5M+ immediate new revenue from Follow-Up AI alone.
• Clinical AI trial: identified $3M/yr/ED in missed supply billing and $1M+/yr/ED in missed critical care billing.
• Visit length: 13-minute decrease in visit length.
• Staff burden: 1,500 fewer questions/month.
• Patient satisfaction: 97% satisfaction rating on ERAdvisor.
• HCAHPS (Dignity Health SJHMC): +38% on "information about delays"; +226% likelihood to recommend after Vital launch. Press Ganey score rose from ~22 pre-launch to 98 post-launch.
• Team size: 20 FTEs pre-raise → 35 post-raise.

• ACV range: $60k–$120k/yr/hospital contracted; eventual $500k/yr.
• Current blended ACV: ~$100k/hospital.
• Hospital ROI: $5M–$7M+ in new/retained revenue per multi-ED health system customer - implies very strong payback for buyer at $60k–$120k/yr price point.

• Legacy sales cycle for hospital IT is 12–18 months; Vital has cut this to 2–4 months via no-IT-required deployment piggybacking existing connectivity (Redox, CMT, PatientPing, Audacious Inquiry).
• 10 AI models developed, 5 published academic papers on AI/NLP in ED (Emory University collaboration).
• No named competitors called out in deck.
• Moat framed as: EHR-integrated data flywheel, clinical credibility (CMO is Emory EM faculty), founder pedigree (Aaron Patzer, founder of Mint.com), and deep health system relationships with expansion runway.

• Aaron Patzer - CEO; Founder & CEO of Mint.com, Fortune Top 40 Under 40, 10 patents.
• Justin Schrager, MD - CMO; Asst Professor of Emergency Medicine, Emory University School of Medicine.
• Kurt Essenmacher - VP Sales/BizDev/Ops; Employee #3 at InQuicker, 400+ ER relationships.
• Nate Fletcher - Director Sales & Ops; Employee #10 at GetWellNetwork, 50+ health systems.
• Te Warren - VP Engineering; led Pixel Fusion, Founder Summer of Dev.

• Ask: Series A - $10–12M.
• Use of funds: FTE 20 → 35 (scale sales & implementation), new product development (Inpatient, Clinical alerts).
• Runway: ~3 years post-raise.

• Archetype + why: B2B SaaS - hospital/facility subscription model with land-and-expand upsell motion. Revenue is driven by hospital count × tier mix × ACV, not by patient volumes (though patient metrics are the key sales proof). The expand dynamic (pilot → Tier 1 → Tier 2 → Tier 3) is the core value creation mechanism and must be modelled explicitly.

• Forecast horizon & granularity: 5 years (Y1–Y5); monthly for Y1–Y2 (to track pilot-to-contract conversion and cohort build-up), quarterly for Y3–Y5.

• Key drivers & assumptions:
• Starting contracted hospitals: ~19 contracted at model start
• Starting pilot hospitals: ~41 pilots at model start
• Pilot-to-contract conversion rate: 60% - deck shows strong momentum and health system relationships; hospital budgets are constrained but ROI is demonstrated
• New hospital signings (pilots/mo): 15–20/mo in Y1, scaling with sales headcount; deck shows ~20 in one month (Feb→Mar jump from ~38 to ~60 total)
• Sales ramp with headcount: ~2 quota-carrying reps post-raise → 6 by end Y2; each closes ~10–15 hospitals/yr
• Tier distribution (contracted hospitals):
• Tier 1 (ERAdvisor, $60k/yr): 60% of contracted base initially
• Tier 2 (+ Follow-Up AI, $120k/yr): 30% of contracted base
• Tier 3 ($500k/yr): 10% of contracted base, growing over time
• Blended ACV today: ~$100k/hospital
• Upsell rate: 20% of Tier 1 hospitals upgrade to Tier 2 per year; 10% of Tier 2 upgrade to Tier 3
• Churn rate: 5%/yr - health IT contracts are sticky, EHR integration increases switching cost
• Gross margin: 70–75% - typical B2B healthtech SaaS; implementation costs and customer success are the main COGS; no hardware
• Implementation cost per hospital: $5–10k one-time (no-IT-required deployment is a key selling point, so should be low)
• Headcount: 20 FTEs pre-raise → 35 post-raise; ~55% of opex is personnel
• S&M as % of revenue: 40–50% in early years, declining toward 25% at scale
• R&D as % of revenue: 20–25% (AI model development is core)
• G&A as % of revenue: 10–15%
• Burn rate implied: ~$300–400k/mo at 20 FTEs; ~$500–600k/mo at 35 FTEs
• Runway: ~3 years on $10–12M - consistent with ~$330k/mo burn

• Scenarios (Base / Bull / Bear):
• Base: Pilot conversion 60%, 15 new pilots/mo, tier mix stays blended at ~$100k ACV
• Bull: Faster health system expansion (Ascension 150, UPMC 40 converting), Tier 3 adoption accelerates, blended ACV hits $200k+ by Y3
• Bear: Pilot conversion drops to 40%, hospital budget freezes, sales cycle elongates back to 6+ months, churn at 10%

• Required sheets / outputs:

1. Assumptions - all drivers above with scenario toggles
2. Hospital Cohort Model - monthly new pilots, conversions, tier mix, churn; waterfall of ARR by cohort
3. ARR Bridge - new ARR, expansion ARR, churned ARR, net new ARR
4. P&L - Revenue, COGS, Gross Profit, S&M, R&D, G&A, EBITDA
5. Headcount Plan - by function (Sales, Eng, CS, G&A), linked to opex
6. Cash Flow & Runway - monthly burn, cash balance, months of runway
7. KPI Summary - ARR, hospitals (pilot/contracted), blended ACV, net revenue retention, burn multiple