$15M for 15 Employees — How Aaron Leibtag Structured His Pentavere Sale to HealWell

Aaron Leibtag was one of the most popular guests in Built to Sell Radio history. He sold his 15-employee bootstrapped healthcare AI company, Pentavere, for $15 million. 

Pentavere built AI to unlock patient data trapped inside PDFs and clinical notes years before large language models existed. 

The headline number was $15 million. What it did not reveal was the structure underneath. Part of the consideration was paid in the volatile stock of the acquirer. Aaron and his partners also rolled 49% of their equity into the new entity. Now Aaron returns, and you might be surprised to learn how it all played out. 

When it comes time to sell, most business owners want 100% cash at closing. Almost no one gets it. Most deals come with structure, and structure usually comes down to three levers: what currency the buyer pays you in (cash versus stock), how they keep you tied to the future after giving up control (earn-out versus equity roll), and what rights either side has to unwind the relationship later. 

In this week’s episode of Built to Sell Radio, you discover how to: 

• Negotiate the right to sell your acquirer’s stock immediately instead of accepting a hold period 

• Use an equity roll instead of an earn-out to stay aligned with the buyer 

• Structure a buyer-side call option with a fixed-price floor that increases over time 

• Add a multiple-of-gross-profit kicker so you participate when the business outperforms 

• Position professional services revenue as strategic, not lower quality 

• Push back on lockups, vesting, and other clauses using the “reasonable expectation at time of bargain” principle 

• Decide when stock may be more valuable than cash in a public-company acquisition 

Show Notes & Links

Press Release

Pentavere

HealWELL

The Prix-Galien Award

Watch Aaron’s First interview 

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Definitions

Letter of Intent (LOI): This document outlines the basic terms and conditions of a deal before a formal agreement is drawn up. It serves as a mutual commitment between the buyer and the seller to move forward with the transaction on the agreed-upon terms.

Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.

Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.

Put Option: A put option is a bit like an insurance policy for your stock investment.

Imagine you own a stock that you think might go down in price, and you want to protect yourself from losing too much money. A put option can be your safety net.

Here’s how it works:

• You pay a fee, known as a “premium,” to buy a put option or negotiate put options when you sell your company.
• This option gives you the “right” to sell your stock at a predetermined price, called the “strike price,” by a certain date.
• You don’t have to use this option if you don’t want to. It’s like paying for car insurance but hoping you never have to use it.

So, let’s say you own a stock that’s currently worth $50. You buy a put option with a strike price of $40 that expires in one month. You pay a premium, maybe a few dollars per share, for this right.

Two things can happen:

1. The stock price drops to $30. Yikes! But because you have the put option, you can still sell your stock for $40, the strike price. So, the option saves you from a bigger loss.
2. The stock price stays the same or goes up. You decide not to use your option. It expires, and you lose the premium you paid. But your stock is worth more or the same, so you’re probably okay with that.

Remember, unlike owning a stock, which you can keep for as long as the company is in business, an option has an expiration date. Once that date passes, the option is either used (exercised) or it becomes worthless.

If you agree to roll a portion of your proceeds into stock of the company acquiring yours, you may be able to negotiate a put option which gives you the rights to “put” (i.e. sell) your shares to your acquirer at a predetermined price.

About Our Guest

Aaron Leibtag

Aaron has successfully established partnerships and gained financial backing from major global pharmaceutical companies and top-tier hospitals for the development of DARWEN™ AI. This innovation has been recognized for its leading accuracy in prestigious scientific journals and showcased at key international conferences. With a demonstrated expertise in leading organizational change, Aaron has steered multiple private equity-backed consumer businesses towards successful liquidity events. His leadership extends beyond the corporate realm, having served as the vice chair of Sinai Health System’s Volunteer Advisory Committee and as a board member for the Museum of Modern Contemporary Art.

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