X or Data Exchange (transcribed as "X or Data Exchange"; spelling unclear in source)

Mike had spent years building data consortiums for large companies. He saw that the big credit card companies, wireless, cable, and satellite providers held large amounts of consumer data, but they did not like sharing it through the traditional sources. The big three bureaus and data brokers like LexisNexis offered little accountability, and the companies could not see where their data went. He wanted a system where companies could share data to stop fraud or manage credit risk while still holding and controlling that data themselves.

The company was launched in January 2014. Mike funded it himself at first, saying "I put in $800,000 on my own money over the first year." That money came from selling his earlier analytics company, ID Analytics, to LifeLock. The product took about a year to build before revenue began. The first exchange was a small business risk exchange, built for large communications companies that screen business applications for internet, cable, satellite, and phone service. The architecture kept data behind each company's firewall, so requests were pinged inside the firewall and the data never left its owner.

The company sold to a small group of very large clients rather than to many small ones. Mike said that working with the top six to eight financial services companies covered about 90% of America, and that the company was "very successful on dozens of companies." Revenue came from transactional fees of pennies per exchange, which varied with how much money the exchange saved clients and with loss rates. Mike said all current revenue was pay-as-you-go, with a subscription model planned for a new exchange focused on fraud information sharing among financial services companies.

The company raised $6 million to date, including a $1.8 million convertible note and a $4.2 million Series A. It then extended its Series A terms to raise an additional $2 million from existing investors and a few new strategic angels. Mike chose this over a difficult Series B raise, saying raising a Series B in the current environment "is not the easiest thing to do." He also said the company had a long, slow ramp because of heavy technology investment and regulatory requirements, and that it had not yet reached cash flow positive.

At the time of the interview, the company had 10 full-time employees and one part-time, mostly in Austin with two field staff in Miami and North Carolina. Mike's target was to exit 2017 cash flow positive, which the host estimated would require over $1 million in 2017 revenue. He did not disclose revenue figures or customer counts.