NYA COMPANY SPOTLIGHT - SCOTT SADIN, COO U.S. INTEGRITY
Scott Sadin, Chief Operating Officer of U.S. Integrity, has always had a fascination about the opportunities for innovation, especially within the sports betting, gaming and wagering ecosystem. When he met Matt Holt, CEO and President, Co-founder of U.S. Integrity, through a mutual friend, they discussed the idea for a conflict-free integrity monitoring company, and the rest is history.
Scott has experience in operational management stemming from financial services institutions such as Apollo Global Management, Tourbillon Capital and MSD Partners. While working in financial services, Scott helped develop trading surveillance programs aimed at identifying potentially suspicious equity and debt transactions. Scott was born and raised in New York City and received his B.A. in Political Science from Lehigh University.
How did you first meet New York Angels?
I was introduced to New York Angels through Jeff Seltzer. He had seen a profile or a pitch through one of SeventySix Capital’s showcases. We had several subsequent conversations, including about going through the NYA investment process. We went through a few months of diligence with NYA and closed our round (which New York Angels led) on October 2, 2020. I believe that was the day because it was the night before my wedding when we actually closed. I remember literally getting off the phone with Jeff on a Friday around 3 pm, and saying, “This is great and I'm excited, but I'm headed to our rehearsal dinner, so I have to go.”
What were you looking for in investors when you were fundraising? Why did you choose to work with New York Angels?
We first met Jeff in the summer of 2020. At that point the world was in a somewhat precarious position for obvious reasons, and the sports industry was in a really precarious position because so many sports had canceled their premier events, e.g., March Madness was entirely canceled. At the time, we had a product that we felt really strongly about, but it was still an idea/concept, and we needed to raise capital to extend our vision and see what milestones we can accomplish.
We were really excited about the New York Angels process because there were so many areas that we knew we needed some guidance on e.g., technology, products, commercial expertise. We needed domain experts to help us in each aspect of the core business. With New York Angels, there were so many of these individuals who come from disparate backgrounds and professional experiences and are really eager to help young entrepreneurs to drive products and projects that they felt strongly in. The more conversations that Matt and I had with NYA, the more we were bullish on what the New York Angels would be able to bring to the table for us.
What was the process like for you when you were fundraising?
At the time, we were past friends and family fundraising. We had already raised capital through SeventySix Capital, and they were interested in doing a follow-on round. We also knew that we wanted to find a new partner for strategic guidance. We spoke to many different companies, and they all said with COVID, sports are on hold, but we are interested, but we’d like to see someone else lead the round.
With New York Angels, we were really excited about them because they would not only give us some of the capital that we needed to achieve certain milestones, but also provide the opportunity for us to have some additional investors come on alongside them. We actually raised more from than we were expecting when we initiated the process.
The other thing that I think was interesting about the NYA process, and Jeff told us this from the beginning, was that NYA will take you through a full process from start to finish. It's not going to be abbreviated. It's not going to be fun necessarily, but it's going to be at the very least, a great learning experience. That's one of the things that Matt and I were excited about. We would learn what parts of the company that we probably needed to work on, and we would learn how shrewd investors look at and value a potential asset. We definitely went through a full process that was painstaking at times but yielded a great result. The process gave us a really unique perspective of our company that we hadn't had in the prior two years from previous fundraising through friends and family and pre-seed rounds.
What have you enjoyed most about working with New York Angels?
I would say that Jeff has been a fantastic proponent, support system and domain expert. He has been our primary point of contact and expanded our network. Whenever we need something, whether it's related to technology, product, general operational or vendor management, we know that there is going to be someone within the New York Angels network who can help out. As an early-stage founder, you always have little things that pop up, and Jeff has consistently addressed our one off questions. New York Angels provides a wide network of resources who can help you with almost any topic.
What advice would you give other founders who are looking to fundraise?
One of the great things about U.S. Integrity is that we are partners who can tag team things. If one of us needs to take a call with New York Angels, the other can take a client call. We trust each other to handle the day-to-day operations in the company as well as any kind of fundraising or investor relations or financing related activity. In a very early-stage company, it all often falls on one person. When you’re fundraising, especially with an institutional or potential institutional investor, you need to understand that it is going to be almost your full-time job. The more you can allocate to other seasoned professionals the better.
Spend a lot of time on your pitch deck. Even if you are phenomenal at drafting pitch decks, your first, second, third, and fourth versions just aren’t going to be the right version. It takes time to craft the story. It takes time to understand what resonates with potential investors. It takes time to understand exactly the right cadence for your slides and the right verbiage to leverage for some of the concepts that you're trying to convey.
Clearly identify how much you are looking to raise, and why. A lot of people say generally this would be a nice amount, and then increase it by 30-40% for runway purposes. Funding is often dissected quite significantly by investors, so if you don't have all of your ducks in a row, it could come back to bite you.
What advice would you give other early-stage investors who are looking to invest in companies?
Especially in the sports betting landscape it is really important to understand the regulatory and legal framework. I've seen a lot of companies out there that have raised some really large rounds, but in many ways are anticipating some kind of significant or material change to the regulatory framework. That's fine as long as your investors or potential investors are on the same page and understanding. Investors should have a clear understanding what is legal, what is not legal, and how impactful the regulatory framework is on running a business. Understanding the regulatory framework and legalities involved is critical for investors, at least in the sports industry.
What has driven U.S. Integrity's success?
Although we are very much a technology and data driven company, sports betting relationships are crucially important. We have a client list with top-tier professional athletic properties and a long list of sports book operators that operate across North America. They know that they can come to us for anything and that we're professional problem solvers. Even if you run a SAS company, make sure that those relationships are constantly being nurtured because they are not only your paying clients, but they also usually can offer you some unique opportunities that you can capitalize upon. It was crucially important in our success to maintain, nurture and develop the relationships that help fuel our company.
What is next for U.S. Integrity?
We have about 32 people in a physical Las Vegas location and 7 more that work remotely here in New York. As we continue to expand, we're looking at opening a sister office on the East Coast.
