Case Scenario: COMPANY: CARELINX
Business idea: Design a caregiver marketplace that allows families in need of a caregiver and professional caregivers to connect online. pitch: The traditional way families in need of a caregiver have arranged for care is to enlist the services of a brick and mortar agency. The problem with this approach is that it is expensive and the pool of available caregivers is limited to the people that work for the agency. CareLinx's approach is different. It has created an online platform that makes it easy for families in need of caregivers to find professional caregivers online. via the CareLinx platform, a family is able to find, video interview, read background checks, hire, manage, and pay professional caregivers that match their specific needs and budgetary constraints. The idea for CareLinx emerged from a personal experience of its founder, Sherwin Sheik. Sheik and his family experienced firsthand the challenges involved with finding and managing professional caregivers for a sister who has multiple sclerosis and an uncle with ALS. They were referred to several local agencies and found the process to be inefficient and costly.
To complicate matters, Sheik's mother lived in San Francisco, while the sister that needed help lived in Los Angeles. The distance between the two required Sheik's mother to constantly fly back and forth to coordinate care. There was really no good way for Sheik and his family to manage the care for his sister and uncle efficiently. CareLinx takes the inefficiency out of the process. A caregiver can be located and interviewed online. All caregivers on the site are prescreened and extensive background checks are provided. CareLinx takes care of the insurance, paperwork, and taxes. Due to the importance of finding the ideal caregiver for an individual who needs care, CareLinx isn't just a website. Once a family goes to the company's website and completes the initial survey, they are contacted by a CareLinx team member, who walks them through the process. Caregivers set their own hourly rate, and salary is negotiated between the caregiver and the family with the need. CareLinx charges the family with the need a 15 percent service fee for the duration of the caregiving relationship. The process typically saves families thousands of dollars, whose alternative is to enlist the services of a traditional bricksand-mortar caregiving agency. From the caregiver's point of view, CareLinx provides them an easy way to find clients in their area who need home health care. It also offers flexibility. Caregivers can select clients of their choice, set their hourly pay, and choose clients that fit with their schedules. Caregivers being paid through Care Linx earn up to 25 percent to 30 percent more than those working through a traditional agency. In short, Care Linx is a win-win for both the caregiver and the family in need. CareLinx's goal is to disrupt the $100 billion-plus home care service delivery industry.
1. Based on the material covered in this chapter, what questions would you ask the firm's founders before making your funding decision? What answers would satisfy you?
2. If you had to make your decision on just the information provided in the pitch and on the company's website, would you fund this company? Why or why not?