ostendio investment review

Ostendio Investment Presentation Review

Ostendio Investment Presentation Review

Ostendio is a cyber security and risk mitigation company with an initial focus on healthcare.  Ostendio has a cloud based workflow purporting to be Salesforce for security.  Ostendio’s product has been operational since 2014.  Ostendio appears to have strong and experienced management.

Ostendio is seeking to raise $700K.

Innovation Area:  Big Data and Healthcare

Ostendio addresses two innovation areas.  Its focus on the workflow of managing security infrastructure differentiates it from the many assessment tools available.  The focus on security management provides opportunities for Ostendio to become an essential part of client operations which may provide pricing power.

GREEN

Size of the Opportunity

Ostendio’s initial focus on healthcare provides an industry that has significant security requirements and growth prospects but which also has been a challenging industry to enter due to the diffuse and heterogeneous nature of its participants.

Ostendio may benefit from branching into a non-healthcare arena so it does not get pidgeon-holed into a challenging sales environment.

Ostendio asserts the healthcare GRC market in North America is projected to reach $1.3 billion in 2020 which appears to me to be too small given the high number of competitors in the space and the complexity of the healthcare IT Sales Process.

RED if sole focus is Healthcare; YELLOW if broaden industry focus.

Inefficiency

Ostendio needs to address its current pricing model based on the data they provided.  Ostendio claims 1300 licenses sold and $325K in revenue combined for 2014 and 2015.  If the math is right a license costs $250 but their expenses appear to be closer to $500 per license.  Pricing would need to be adjusted closer to $1000 per license to make this an attactive opportunity.

Ostendio projects losses through 2018 even with receipt of funding which tells me they are going to be looking for more funding and fast.

RED

Business Godfather Commentary

Ostendio has experienced success in its initial implementation of its cloud based solution but needs to address its pricing model and its industry focus to make itself more attractive to me as an active investor.  Ostendio would benefit from providing potential investors with a clearer path to return of their investment and return on their investment.

Caveats

This Presentation Review is my opinion based on extremely limited information – a 1 page write up and 5 minute presentation.  My assessment might change if I had conducted more thorough due diligence.  I provide this assessment for educational purposes in applying the Business Godfather Investable Business Analysis.  Entrepreneurs are always swimming against a universe of people who may not fully understand their true business innovation and that may apply to me.

Known as the Business Godfather, Chris Koomey started his first business when he was 19 and since then has opened up businesses and helped others open up and grow business as a business owner, business consultant and business attorney. Chris helps growing businesses in fields ranging from education to technology. Chris graduated from the Marshall Wythe School of Law at the College of William and Mary after receiving BA & MA degrees from the University of Chicago and an MS degree from George Mason University. Business Godfather, LLC was established in 2012 to bring together all the aspects of Chris's experience and background.