Scott Alexander·May 22, 2025

Rebuilding from 80% Collapse to Mid 7 Figures Revenue | Scott Alexander Interview

Scott Alexander is a mid-career operator with a background in healthcare intrapreneurship (Medtronic, Cavidian, Mercy Health) who bought iVelocity Marketing, a Denver-based digital marketing agency serving chiropractors and dentists, in early 2019 for $2.1m (~3x SDE of ~$750k) using a fixed-rate SBA loan. The acquisition came with hidden problems: the prior owner had a toxic, micromanaging culture, and the bookkeeper had been deleting unpaid invoices to mask accelerating client churn — problems Scott only fully understood after closing. Just as he was stabilizing the culture, COVID hit in March 2020 and wiped out 80% of revenue in two weeks as every chiropractor and dental client churned. Scott made a decisive wartime-CEO pivot: he shut down the consumer-facing agency model, renamed the business Gyrus Marketing, and repositioned it as a B2B marketing agency for medical device and healthcare companies — using custom physician databases of 4-5 million records to target specialist doctors on Meta and LinkedIn. Leveraging his Medtronic/Cavidian network and healthcare sales background, Scott built Gyrus from zero revenue in April 2020 to mid-7 figures by the time of the episode, with 30 W2 employees, a COO hired in 2021, and a full-time recruiter. The episode is a detailed case study in diligence failures (quality of earnings, customer lifetime value stratification, cultural assessment), the resilience required in a turnaround, and how a catastrophic external shock can force a more defensible pivot.

Deal facts

purchase price: $2.1m (reduced from $2.4m)
multiple: ~3x SDE (original ask was just over 3x)
sde ebitda: SDE ~$750k (at time of purchase)
revenue: ~$2m+ at acquisition; mid-7 figures today (Gyrus Marketing)
financing structure: SBA loan (fixed rate at 7%, arranged through CIBC with Colin McNelte)
notes: Original ask was $2.4m; renegotiated to $2.1m after Q4 2018 financials showed accelerating revenue decline. Fixed-rate SBA loan secured before rates rose. Business was a digital marketing agency (iVelocity Marketing) serving chiropractors and dental practices in Denver, CO. After COVID wiped 80% of revenue in 2020, Scott pivoted to a new B2B medical device marketing agency (Gyrus Marketing) targeting healthcare companies via social media and custom database targeting.

Why this business

Scott had spent his career doing intrapreneurial work at large medical organizations (Medtronic, Cavidian, Mercy) and wanted to run his own business. He searched for businesses with SDE between $750k and $1.5m in five target geographies. He focused on healthcare-adjacent services because of his deep background in the business side of healthcare. The iVelocity acquisition fit the criteria: stable growth, recurring revenue from retainer-based clients, 20 employees, 11-year operating history, and located near his former home in Denver.

What's working

Pivoting to B2B medical device marketing (Gyrus Marketing) after COVID destroyed the original chiropractic/dental agency — the pivot leveraged Scott's deep healthcare background and relationships
Custom audience targeting using a database of 4-5 million physician records, training Meta/LinkedIn algorithms to find specific specialist physicians for medical device clients
Measuring and reporting full-funnel ROI inside client CRMs, tracking from lead to closed deal — a highly differentiated value proposition vs. typical lead-gen agencies
Hiring a COO with extensive agency experience (joined March 2021), allowing Scott to focus on sales while she runs operations
Maintaining a full-time recruiter focused on finding talent — recognizing that in a service business, people are the core asset
Renaming the company Gyrus Marketing and building a distinct brand identity around their B2B healthcare specialization
Growing to 30 W2 employees and mid-7 figures in revenue, essentially all from the new Gyrus business with minimal carry-over from iVelocity

What's hard

Acquired a business with hidden revenue quality problems: the bookkeeper was deleting unpaid invoices, making the revenue decline appear gradual when it was actually sharp and customer service had already collapsed
Toxic culture inherited from the prior owner — the seller micromanaged and publicly berated employees, and had hired people aligned to that culture who actively undermined Scott after the sale
Lost 80% of revenue between March 16 and April 1, 2020 when COVID hit and all chiropractor/dental clients churned out
Prior owner ghosted during the transition period to 'go journal,' abandoned the business at its most critical moment, and even berated the company's largest client in front of staff after the sale closed
Scott nearly lost confidence in himself during the early decline, questioning whether his prior corporate success had been luck
Churn dynamics in the original agency were structurally high — clients in the chiropractic/dental vertical bounced between agencies frequently, making recurring revenue quality much lower than it appeared on the surface
Should have stratified customer lifetime value by cohort rather than relying on average LTV, which was skewed by a few long-tenure clients
Renegotiating the purchase price from $2.4m to $2.1m after discovering deteriorating Q4 2018 financials — and in hindsight would have walked had they understood the full extent of the invoice deletion

Notable quotes

We lost 80% of our revenue from March 16th to April 1st of 2020. I mean like literally when I was saying like you know every phone call was going to be you know getting us getting fired like they came fast and heavy and so we went absolutely into the toilet in those last two weeks.

I said, 'Guys, this is what we're doing.' It's not the first time you've said that, Scott.

Don't ever put me between you and Koko's dance lessons cuz Koko's dance lessons win every time. We're gonna deliver for my family and I want you to be able to help me do that, but if you're not going to do it, then there's going to be a better place for you to be.

Birds of a feather flock together. And so one of the things that was happening is if you start to realize that the seller is not philosophically aligned with you, they're going to hire people that align with them just like you would hire people that would align to you.