Sep 2, 2021
“It’s freaky—having people work for you that you never met” — Michael McCrary, founder and CEO of PureSpectrum, a complete end-to-end market research and insights survey platform with the mission of making researchers’ jobs easier. In just five years, the company has sourced over 32 million online interviews. Recently, the company was ranked #21 on Deloitte’s Technology Fast 500 list.
Michael shares his insights in procuring $17 million of Series B financing (growth stage capital). With this explosive growth, Michael used this opportunity to take some chips off the table. He surveyed a number of other entrepreneurs and it was unanimous that he should sell some shares in the process.
Some of the key benefits for Michael were “de-risking” his personal financial plan. From a psychological standpoint, he says it was nice to see some reward for the last five years of work and effort.
Additionally, it helps protect the value of the overall enterprise in case something unforeseen were to happen. He wouldn’t be forced to take a lowball offer due to a scarcity mindset. With personal security checked off the list, he can focus on taking the company to the next level. Michael says that the key is to strike the right balance in the deal structure so that an owner can’t ride off into the sunset. The owner should be incentivized to work.
Unlike many technology companies that partner with private equity firms based in major hubs like San Francisco or New York, Michael partnered with a Minneapolis-based firm. As he explains, there was a better cultural fit and he felt a better alignment of interests. He says it’s not just a quarterly board meeting. You are inviting these investors to be a “fiduciary” to your company. He thought of it like hiring another executive.
Lastly, he shares his two action items for owners: