My investor became a stranger overnight

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👋 Hi, my name is Mike Pritchett, and I’m here with this week’s edition of The Midnight Text, Forum Ventures’ newsletter tackling the honest, messy, and often unspoken moments that keep founders up at night.

I’m the Founder & CEO of BuzzTrail.ai, which creates AI video avatars to handle product demos, lead qualification, and CRM integration around the clock, no scheduling delays, no no-shows, no SDR ping-pong. Think of it as a 24/7 sales rep that actually qualifies intent before a human ever picks up the phone.

Before BuzzTrail, I built Shootsta, a video production company for big companies who needed volume, taking it from Australia into 7 countries, growing the team to 150 people, and scaling it to $20M ARR before exiting in 2023. Real growth came with real operational pain, and today I want to tell you about one of those moments, a story I haven’t shared publicly before.

Within our first year we had paying clients and meaningful revenue, and no outside money in the business at all. We weren’t fundraising and didn’t need to be, but we were open to it if the right thing came along.

Then it did, or at least it looked like it did.

A publicly listed company reached out after their CEO saw what we were building on LinkedIn and got genuinely excited about it. They had ten offices around the country and a sales force that dwarfed ours several times over, and the pitch practically wrote itself in my head: their reps sell our product, we get instant distribution, and we scale faster than we ever could have managed alone. I remember doing the math in my head on what all those salespeople could do for us during those first conversations, buzzing at the possibility.

We took the deal, a million Australian dollars that worked out to roughly $500K US in cash and another $250K in services we were promised on top of it. On paper, I had a serious partner with serious reach behind me.

For the next three years, there was no meaningful sales support and no real GTM lift to speak of, and the services contract expired unused. Fortunately, we were steadily growing, even without the extra lift.

But while things were moving in a positive trajectory for us, our investor’s business started going south, and soon after they delisted.

When they delisted, their shares in my company landed personally in the hands of the chairman, an older man who didn’t understand what we were building and suddenly owned a serious chunk of my company regardless. Overnight, what had looked like a sophisticated institutional investor became one person who didn’t share our vision.

We had offers to sell, good ones, at real market prices. But our agreement gave him both a first right of refusal and the ability to block a sale outright, and together those two terms meant he could hold every offer at bay without ever having to compete for the business. When he did counter, it came in below what the market was telling us the business was worth, and it became clear that selling simply wasn't something he was motivated to do.

The company survived all of it, and Shootsta is still around today and still profitable, but we lost years we’ll never get back, and we certainly lost an exit at the right valuation that would have been the best outcome for everyone else who helped build that business alongside me.

A few things I’d tell any founder sitting where I once sat.

First, don’t let inbound investment interest replace a real process, because an opportunity landing in your inbox is a signal that something’s working rather than a reason to skip comparing it against everything else out there. I took the first serious offer because it felt like validation, when I should have treated it as nothing more than a starting point.

Second, public company investment carries a risk most founders never think to price in. I assumed a publicly listed company would always act in the interest of its shareholders. My lawyer told me afterward that what happened to us isn’t nearly as rare as I’d assumed. Companies get into trouble, individuals end up holding shares that were never meant to sit with one person, and that person’s incentives don’t always align with the founder’s.

Institutional VC isn’t a guarantee against bad actors, but it’s structurally safer, because the incentives are clear from the start. A fund is in the business of returns, and everyone knows that going in, whereas an individual holding a windfall stake can end up with all kinds of motivations that have nothing to do with the business itself. On top of that, a fund also has a reputation to protect and a track record it needs founders to trust the next time around, while an individual holding a stake by accident has none of that pressure weighing on them.

Third, know who you’re getting into business with all the way down. Not just the logo on the term sheet but the actual people behind it, and where they actually see the business going. That means vision around the model itself, in my case whether this was a services business, a SaaS play, or something built with AI. And it means vision around the exit, whether you’re building to sell, building to hold, or building for something in between. Both come down to the same thing in the end, which is the people you’ve brought in and whether their picture of the company’s future looks anything like yours.

It was really tough watching years of runway and a real exit get held hostage by someone with nothing left to lose, but it wasn’t the end of anything. I learned exactly what to look for, and I built BuzzTrail on that lesson, going straight to VC with a clear path from seed onward and no ambiguity about what comes next.

None of this makes me look back on Shootsta with regret. It’s still a business I’m proud of, and the lesson just became part of how I build now. If this helps even one of you ask a sharper question before you sign, that’s a good trade for telling a story I don’t usually tell.

Mike

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