Ask an owner what they will do after they sell and a lot of them say a version of the same thing. They want to stay close to the action.
Adam Spector co-founded LiftIgniter in 2014, which used machine learning to personalize websites the way YouTube does. Growth stalled, and with no way to prove the company was causing the results customers saw, it could never charge what the work was worth. The board brought in a new CEO to sell, and when Adam argued to keep building he was outvoted two to one. It sold in 2018, mostly for its engineers, and he left soon after.
For Adam, staying close meant angel investing. He wanted it to keep him near the work and grow the money at the same time. It has done neither the way he assumed.
Seven to eight times on paper. Roughly break even in cash.
That gap is where it gets interesting. His checks were too small for even a huge winner to matter, and paper gains are not money until somebody sells. It did not put him any nearer the work either. The founders he backs rarely ask him for anything.
In this week’s episode, you discover how to:
- Find out how long a paper win takes to turn into cash
- Work out who holds the vote on selling your company, long before it comes up
- Tell the difference between a stall that means sell and one that means dig in
- Find out why staying close to the action rarely works the way you picture it
- Learn what it costs to be right about something and too cautious to act on it
Watch the full episode below.
Quote of the Week
I’m shocked by how many founders I’ve invested in don’t ask for advice. Only about 25% even send out quarterly updates. You don’t have any idea what’s happening.
Adam Spector, on the difference between backing a company and being part of one.
Curious what an acquirer might think of your business? Let’s take a look.
Deals
RealSense, a company that makes 3D depth-sensing cameras that help robots “see” and navigate the physical world, was acquired by Cognex (NASDAQ: CGNX), the global leader in industrial machine vision, for $500M. RealSense is expected to generate $80M to $90M in revenue in 2026, implying a valuation of 5.9x forward revenue.
