Jake Bittner·December 1, 2025

Buying for $600k, Selling for $35m | Jake Bittner Interview

Jake Bittner spent over a decade in enterprise software sales focused on data analytics for federal government agencies before buying a carveout called Cadence Quest (rebranded ClarionQ) in 2011 for roughly $600-700k, 100% seller-financed. The business was losing money at acquisition — a handful of contracts, a small team, and no profitability — but it had a GSA schedule, past performance history, and a small team to build from. Jake partnered with COO Adam Roy and spent the first several years grinding through a staff-augmentation model with 54% customer retention before pivoting decisively to long-term multi-year analytics 'programs' for government agencies in federal healthcare, Massachusetts, and Virginia. The shift drove customer retention above 90%, pushed gross margins from ~20-30% to ~60%, freed Jake and Adam to work on the business rather than in it, and produced landmark projects including Virginia's opioid data-sharing platform. COVID-19 response analytics work further accelerated growth and drew acquisition interest. By 2021, with SDE of ~$3.1m on ~$20m+ in revenue, Jake and Adam sold to an independent-sponsor-backed platform for $35m (~11x SDE) — structured as ~$18m cash, $5m equity rollover, and ~$12m earnout. The post-acquisition period was rocky: the buyer's dysfunctional culture was jarring, and when the earnout came due, the independent sponsor could not pay without breaching loan covenants, leading to an 18-month standoff before they were paid in full with penalties. Jake now invests in GovTech search deals through Mission Support Partners and offers business coaching to ETA operators.

Deal facts

purchase price: ~$600-700k (best recollection ~$660k)
multiple: Not applicable — business was losing money at acquisition; ~11x SDE at exit
sde ebitda: SDE ~$3.1m at time of exit (2021)
revenue: ~$2.5-4m at acquisition; ~$20m+ at exit
financing structure: 100% seller financing at ~10-12% interest rate
notes: Carveout from original Cadence Quest entity (Accenture had purchased the other assets). Exit in 2021 for $35m total: ~$17-18m cash upfront, $5m equity rollover, ~$12m earnout (achieved but delayed; paid in full with penalties after ~18-month dispute with acquirer, an independent sponsor-backed platform).

Why this business

Jake was approached by a former Micro Strategy colleague who was selling his analytics firm (Cadence Quest) to Accenture. The government-facing contracts were a confusing sideshow to Accenture and were being spun off separately. Jake saw it as a better path than starting from scratch — an existing entity with past performance, a GSA schedule, some staff, and a brand name, even though it was losing money. He had 10+ years of enterprise software sales experience specifically selling data analytics to government agencies, so the domain fit was tight.

What's working

Pivoting from staffing/staff-augmentation to long-term analytics 'programs' — multi-year engagements that transformed customer retention from 54% to ~90%+, creating a compounding flywheel of revenue
Laser focus on three geographic verticals (federal healthcare, Commonwealth of Massachusetts, Commonwealth of Virginia) producing powerful case studies and a reputation as the go-to analytics firm in those markets
High-margin project work (~60% gross margins on program work vs. ~20-30% on staffing) dramatically improved profitability and allowed owners to work on the business rather than in it
Mission-driven positioning in GovTech drove strong employee loyalty and long-term retention
Building the business to be acquirable (tech-enabled services positioning, high growth rate, recurring multi-year contracts, strong case studies) attracted strategic acquirers without running a formal process
Opioid data-sharing platform for Virginia won multiple industry awards and significantly raised their profile with acquirers
COVID-19 response analytics work for Virginia accelerated growth and drew acquisition interest
Adopting SaaS-style metrics (dollar retention, net revenue retention) to manage and communicate business quality
Disciplined use of OKRs and long-term thinking to scale operations efficiently
Ability to walk away from acquisition negotiations produced increasingly rich offers over a year-long process, culminating in an ~11x SDE multiple

What's hard

Early years in staffing/staff-augmentation model were a constant grind — winning new business but not growing because engagements churned as fast as they won (54% customer retention)
Chaotic early employee experiences: workers losing security clearances, signing bonuses taken then departing, employee fraud (different person showing up for the job than was interviewed), office relationships causing team defections
Being a carve-out introduced legacy IRS and state tax complications that dragged on after the transaction
Having to rebrand from Cadence Quest to ClarionQ, including the practical downside of a Q-initial brand in alphabetically sorted conference directories
Post-acquisition integration with the buyer was dramatically worse than expected — a dysfunctional executive team (CFO and COO openly at war), large-company bureaucracy, and political infighting made the earnout period miserable
The acquirer (an independent sponsor) could not pay the ~$8-9m first earnout tranche when due because paying it would have breached their loan covenants — took 18+ months of negotiation to eventually receive full payment including penalties
Key lesson: independent sponsors have no fund to backstop a struggling portfolio company, unlike traditional PE — this risk was underestimated in deal diligence
Earnout language was vague enough that the acquirer claimed contractual flexibility to delay payment, creating legal uncertainty
Transition away from staffing was necessary but difficult — required turning away short-term revenue while rebuilding the business model

Notable quotes

People look at entrepreneurs as risk-takers but in reality entrepreneurs hate risk. They actually are just better at mitigating risk than anybody else because risk is relative. What's risky for you is not risky for me.

We were winning a lot of new business but you get to the end of the year and you look at the numbers and go, 'How come we're not growing?' Things were also ending just as fast as we were winning them.

Our customer retention was 54%. We set a target for 90%, and I remember the team thinking that was very difficult to achieve. But once we started to focus on these programs, customers were with us again and again and again, and the growth started to take off because every new program we won was additive — we weren't filling a hole anymore.

We were positioned as a tech-enabled service. We tried to be a little more of a technology type. There's a middle ground between technology and pure services where they look at tech-enabled services as a stronger multiple.