Jon Nordmark has raised $70 million across two companies. He’ll tell you that it’s closer to a warning label than a trophy.
Glenn Gow, The Scaling Executive Coach and host of The Scaling Executive Podcast, sat down with Nordmark, co-founder and CEO of iterate.ai, to pull apart what he’s learned building two companies across two entirely different eras: eBags, the e-commerce brand that achieved 34% compound annual growth through the dot-com bust and sold over $1.65 billion worth of product before Samsonite acquired it, and iterate.ai, a patented low-code AI platform now serving enterprise clients like Ulta Beauty and Japan’s largest bank.
The post targets CEOs navigating a specific decision: how much money to raise, when to raise it, and what it costs you when you raise too much too soon.
This episode is for CEOs who are weighing their next fundraise and want to understand what founder control actually costs when outside capital comes with board seats attached.
Key Takeaways
- CEOs who raise venture capital early give up more than equity: they give up the speed to make fast strategic decisions, and in fast-moving markets like AI, that speed is often the competitive advantage.
- The board a CEO builds will make or override their most critical strategic decisions — often without domain expertise in the specific business, and often at the worst possible moment, as Nordmark learned at eBags when VCs blocked a 10x exit to protect their own portfolio math.
- Agentic AI is not just making existing jobs more productive. It is making previously impossible tasks achievable, including recovering $17.4 million in rejected hospital insurance claims that would have gone uncollected without AI.
- A genius-level technical person equipped with agentic AI tools can produce in one day what would have taken a small team three to four months, according to Nordmark’s direct observation of his co-founder.
- The right answer on headcount after AI adoption is not always fewer people. The hospital that recovered $17.4 million asked immediately about hiring someone to manage the process.
How CEOs Lose Control the Moment They Raise Venture Capital
Jon Nordmark learned this at eBags the hard way.
When eBags had $2 million in revenue, they raised at a $142 million valuation. Then the dot-com crash hit. When they needed more capital, it was gone. To survive without a down round that would have wiped out employee and founder equity, they had to cut 25% of the workforce: capable people who did not deserve to be laid off.
That experience shaped everything Nordmark built next.
At iterate.ai, he bootstrapped to over $10 million in revenue before raising meaningful outside capital. The company funded its early growth through a consulting arm: building custom software for clients, teaching enterprises how to work with startups, and using that revenue as fuel. The people who joined for large salaries are gone. The equity holders who took lower pay are still there.
But the deeper lesson was not about cash. It was about boards.
“The board makes the most strategic decisions a lot of times, or at least the ones I’ve been involved in,” Nordmark told Gow. “They come in every three months, they think they know everything about your company. They weigh in on really the most important decisions. And they can put your company on a path that may not be the right path.”
He calls this “swoop management.” People with no operating experience in your domain arrive quarterly, dispense advice with full confidence, and leave. Meanwhile, you live with the consequences.
At eBags, Nordmark had a deal on the table: nearly a 10x return for angels and early investors, six years in. The venture firms blocked it. They were managing a portfolio of dot-com disasters and needed a 20x outcome to offset their losses. The founder’s best available exit disappeared because the cap table said so.
The fix at iterate.ai was structural. Today, the board is two people: Nordmark and his co-founder. That structure lets them make decisions fast. In AI, that matters.
Nordmark draws the lesson directly from the eBags blocked exit: every time you raise outside capital, you are trading permissions, not just equity. The right to say yes fast. The right to take an exit when it’s right for you. The right to pivot without a quarterly presentation. “Every time you raise money,” he told Gow, “it can actually be almost the opposite of success. It means you couldn’t do it without the money.”
Why the Best CEO Is the One the Team No Longer Needs
Nordmark heard a phrase recently that stuck with him: “hero leadership.” He found it immediately suspect.
Gow frames the point as a job description. The number one job of a CEO past the earliest stages is to build a great leadership team. Not a management team. A leadership team: people who know how to scale. The second job is to lift that team up and get out of their way.
“The best thing for a guy like me is when I know I’ve built a great business is the day I’m no longer needed,” Nordmark said.
Nordmark’s partnership with co-founder Brian Sathley Nathan is the operating example. Nordmark is the business operator. Sathley Nathan is the enterprise software architect, former Apple engineer, and one of the seven-person security team that built and tethered the first iPhone to AT&T. They are structurally different people, and that difference is the point.
“My job is to enable him as much as I can,” Nordmark said. “Help him get the money he needs, help him hire the people he needs. As long as things are going really well and people are experimenting a lot, I’m very hands-off.”
The question to ask yourself: who on your leadership team makes you unnecessary? If the answer is no one, you have not yet built a team. You have built a dependency.
How Agentic AI Gives CEOs Options They Have Never Had Before
Iterate.ai built its own internal AI coding agent, called Agent One, because Cursor and Windsurf were not producing what they needed: enterprise-grade software built agentically, running for hours without stopping, with security and unit testing built in. They built it for their own engineers, and now they sell it to enterprises and give it free to startups.
The impact on Sathley Nathan’s day is the clearest proof of what agentic AI does at the ceiling of human capability.
“He’s doing sales calls and talking to Dell or Qualcomm or Intel or Ulta Beauty,” Nordmark said. “But then there’s Brian that sets all these prompts before he starts working in the morning. And then the 10 developers go to work.” Those ten virtual developers are the CISO, the QA team, the coders, all operating from English-language instructions Sathley Nathan sets at the start of the day. He returns at the end of the day to review what they produced.
“I almost believe it’s like 100 to one,” Nordmark said of his co-founder’s output. “He can get done in a day what would take a little team of people three or four months.”
That is not a productivity improvement. That is a category change.
Nordmark’s framework for what agents do breaks into two effects:
| Effect | What it means | Real example from iterate.ai |
| Makes current jobs more productive | Removes mundane tasks; frees people for relationship work | RFP first draft completed in 12 minutes instead of 30 hours |
| Makes the previously impossible possible | Tackles problems too complex or expensive to attempt manually | $17.4 million in rejected hospital insurance claims identified and queued for resubmission |
The hospital example deserves a direct look. Hospitals submit insurance claims that get rejected at a 15% rate due to coding errors and submission complexity. The total annual cost of rejections across the US healthcare system sits somewhere between $130 billion and $200 billion. The resubmission process is so complex that claims die there.
Iterate.ai built an agent that reads the rejections, diagnoses what went wrong, and creates a resubmission. For the first hospital, it found $17.4 million that could be recovered.
The hospital’s immediate response: we need to hire someone to manage this.
That is the correct read. Agents do not always reduce headcount. They often reveal work that was never getting done at all.
How the Agentic AI Headcount Decision Works for CEOs
When agentic AI multiplies individual output by orders of magnitude, the headcount question becomes a strategy decision, not a cost calculation. Nordmark identifies three paths available to a CEO once agents are in the stack. Each one is a real choice, and not choosing is itself a choice:
| Path | What it means in practice | Named evidence |
| Cut team and maintain output | Reduce headcount while holding production constant | Nordmark flags this as the default move for financial-return-optimized buyers — the PE path that cuts cost without capturing new capability |
| Maintain team and multiply output | Keep the same people and build faster than before | Sathley Nathan’s output-to-headcount ratio is Nordmark’s cited proof: one engineer producing what a small team takes 3–4 months, with iterate.ai’s headcount unchanged |
| Add people and operate at previously impossible scale | Grow the team to pursue work that was never economically viable before | The hospital that recovered $17.4 million in previously uncollectable claims immediately asked about hiring someone to manage the process |
CEOs who move now build infrastructure their competitors will spend the next two years trying to replicate.
Quotes from This Episode
- “The board makes the most strategic decisions a lot of times, or at least the ones I’ve been involved in. They come in every three months, they think they know everything about your company. They weigh in on really the most important decisions. And they can put your company on a path that may not be the right path.” — Jon Nordmark, Co-Founder and CEO, iterate.ai
- “Every time you raise money, it can actually be almost the opposite of success. It means you couldn’t do it without the money.” — Jon Nordmark, Co-Founder and CEO, iterate.ai
- “The best thing for a guy like me is when I know I’ve built a great business is the day I’m no longer needed.” — Jon Nordmark, Co-Founder and CEO, iterate.ai
- “My job is to enable him as much as I can. Help him get the money he needs, help him hire the people he needs. As long as things are going really well and people are experimenting a lot, I’m very hands-off.” — Jon Nordmark, Co-Founder and CEO, iterate.ai
- “I almost believe it’s like 100 to one. He can get done in a day what would take a little team of people three or four months.” — Jon Nordmark, Co-Founder and CEO, iterate.ai
Frequently Asked Questions
Why do boards so often make the wrong call on CEO strategy?
Jon Nordmark argues that most board members practice what he calls “swoop management”: arriving quarterly with confidence, making high-stakes recommendations, and leaving. They frequently lack operating experience in the specific domain of the company they govern. At eBags, Nordmark watched venture board members block a nearly 10x exit for early investors because the VCs needed larger returns to offset losses elsewhere in their portfolio. The CEO’s best available outcome was eliminated by people whose financial incentives were structurally different from the founder’s.
When should a CEO raise outside capital?
Nordmark’s operating answer: as late as possible, and only after the business has demonstrated real revenue. Iterate.ai crossed $10 million in revenue before raising meaningfully. His reasoning is that not having money forces invention, and having money early creates the illusion of validation. He has raised approximately $70 million across two companies and describes each raise as closer to a reset of the starting line than a milestone of success.
How should a CEO think about AI agents changing their team structure?
Nordmark frames it as two distinct effects. The first is productivity: agents make existing jobs faster and less manual, as when At iterate.ai’s RFP agent cut a 30-hour process to 12 minutes. The second is possibility: agents tackle work that was previously too complex or expensive to attempt, as when At iterate.ai built an agent that recovered $17.4 million in rejected hospital claims that would have gone uncollected. The question for a CEO is not only whether to reduce headcount. It is whether agents reveal capacity that frees your team to do more, build faster, or serve customers in ways that were not economically viable before.
CEOs Work with Glenn Gow to Scale Their Companies and Careers
Glenn Gow is The Scaling Executive Coach: he coaches ambitious executives into the CEO seat and CEOs into successful exits. With 25 years as a CEO and 5 years in venture capital, Glenn helps leaders scale their companies by scaling themselves first. If this conversation was useful, you can apply for executive coaching with Glenn Gow or apply to be a guest on The Scaling Executive Podcast.
