📶 when a "good" outcome isn't good after all

Say “hey” 👋 | Apply 👥 | Upgrade 📶 | Sponsor 📣

Good morning 👋

And welcome back to work for those of you who actually have a life outside of reading and writing emails.

Everybody wants to talk about the VC success stories. That’s all you hear about.

But for every success, there are dozens of failures, and sometimes even the successes are failures once you start peeling back the details.

That’s exactly what happened to ActOn, and we’re covering it in today’s piece.

There’s a growing narrative that VCs are the bad guys, and that investors throw founders under the bus and walk away with all the money. Anybody that still thinks this clearly doesn’t understand the economics of this game.

The truth is that VCs only make real money if founders make a ton of money.

Not a little bit of money.

A ton.

But once you raise beyond a certain amount—especially over $10M—you have to deliver. The stakes get real, and not enough founders seem to take that seriously.

A case study in how it goes wrong: Act-On used to be a legit competitor to HubSpot, Marketo, and Pardot (now Salesforce Marketing Cloud).

After 17 years and raising $53M, they grew to $26M ARR—and then sold to a SPAC competitor for a nominal $53M.

This is an eight-figure exit that feels like a huge loss due to:

So who actually made money here?

✅ Later-stage VCs: Might get 10-20% of their investment back—some in cash, some in SPAC stock (which may or may not be worth much).
❌ Early investors: Probably got wiped out by liquidation preferences.
❌ Employees: Almost certainly zero.
❌ Founders: Most likely zero.
✅ Current management: Probably the only ones who got anything, via retention bonuses to stick around.

The takeaway: A fast failure is 100x better than a slow failure.

The founder and some of these early employees had spent the better part of two decades building and growing this business. Early investors put up the highest risk capital.

Now, their stock is worthless, and they have nothing to show for that work.

If you’re a rocketship, none of this matters. HubSpot, their #1 competitor, is worth $30B+ today. Raising $100M+ pre-IPO? Just fuel for the fire.

But if you’re not a rocketship? Raise less. Maybe just one round.

If Act-On raised half as much, this $53M exit could have made a few millionaires instead of leaving everyone empty-handed.

Read more: https://martech.org/marketing-automation-vendor-act-on-acquired-for-53-million/

Hire A players from the #1 venture capital community in the world.

🔎 Unlock a talent base of 2,500+ vetted candidates with investment experience
🤝 Our team sets up 10+ intros for you
💰 We help you negotiate offers based on five years of annual VC comp data
☑️ Don’t pay until we finish the job and find the right hire for you
🔄 90-day money-back guarantee

Set up a free call to learn more.

🧰 What’s in your Stack—The State of Tech Tools in 2025: Results of Lenny’s Newsletter’s survey that asked what tools they used, what tools frustrate them, and what they’d change, plus key themes that emerged

💲 How We Make Money Here: Mostly Metrics proposes actually explaining to employees on day one your business model

🔝 My Top Essays From 2024: Andrew Chen lists his top 11 essays and the books he’s been reading

👀 What Venture Capitalists Look for in Startups: The VC Corner shares how to align your startup with VC expectations

🤒 How I Knew I Was Burned Out and Headed For Disaster—-Leadership Minute: Robert Glazer shares the story of his breaking point and how he got to the other side

Join dozens of high-growth companies partnering with us to reach 15k of some of the most sought-after people in tech and finance.

See our list of sponsorship packages to learn more.

(Media kit available upon request)

Thanks for reading this far and giving us a little bit of your attention this week.

Feel free to unsubscribe whenever this stops becoming valuable to you.

- Clay