Ep 519 How to Avoid the Unforced Errors That Can Wipe Out Your Equity

Welcome back to Built to Sell Radio. I’m Colin Morgan, here with a conversation to help you punch above your weight when you sell. Today, former elite golfer and coach turned founder Spencer Dennis shares the choices he’d rethink so you can avoid the same unforced errors. Without spoiling the story, here’s John with Spencer.

Great to have you, Spencer; as a sports nut, I had to get you on—what were you doing before you started a company?

I grew up chasing soccer until spinal surgery at fourteen pushed me into golf, where I played at a high level and then moved into coaching. Working with elite juniors and pros showed me how chaotic communication was across parents, trainers, and coaches, so I set out to extend great coaching between sessions.

So what sparked the app itself?

I was earning early but burning out on emails and texts, and after reading The Talent Code I knew athletes needed expert feedback, motivation, and deep practice even when we weren’t together, so I built a tool to make that happen across sports with the coach as the customer. I was user one, recruited cofounders who could ship software, raised from students’ families, later brought in venture capital, sold in 2017, sold again in 2024, and I exited about six months ago after a thirteen-year run.

Who were the cofounders—friends, operators, or backers?

They were my best friends since grade school, one a born builder who monetized projects in high school and jumped into Bitcoin, the other a cloud veteran who helped big games scale on day one. Their skills let us start lean and avoid heavy infrastructure costs, and we stayed friends even after they left.

Did you split equity evenly?

Yes, thirds across the board felt fair, and we later added an employee pool as things got more formal.

How much did you raise from parents, and on what terms?

One hundred seventy thousand dollars at roughly a one point five million valuation, straight equity and trust; looking back, we could have taken a bit more.

Where was the business when you first took venture money?

We ran a paid beta, hired an incredible CTO after he rebuilt our site overnight, and landed busy top-tier coaches who brought their athletes, putting us in the low thousands of users at around ten dollars a month. In total we raised a little over three million dollars via an early priced round and later a convertible when things got bumpy.

What made it bumpy?

We turned off revenue and made it free on investor advice during the grow-at-all-costs era, which forced us onto the fundraising treadmill and pulled focus from building the business.

With your team and traction, why not run it profitably?

I bought into the blitzscale narrative and wanted security, but raising meant bosses, board decks, and constant dilution; if I could redo it, I’d keep charging and use capital later as fuel, not life support.

People hear horror stories about liquidation preferences and notes—did they bite you?

As later money came in with preferences and convertibles stacked on top, the cap table got messy, and without great tools or experience we signed terms that put investors first in a sale; by the first acquisition, my cofounders were effectively wiped out.

How did that actually play out?

We were counting on a board member’s network when a promised check vanished around the 2016 election, which opened the door for a would-be investor to say, let’s buy them instead, and we accepted predatory terms because we were on our heels.

Why did you keep equity when your partners did not?

One cofounder left early for crypto and the other stepped away after health and life events, so when the deal closed I was the one continuing and had to re-vest into new terms; some early angels stayed, but many employees were squeezed.

What happened to the parents who backed you?

They stayed on through holding structures with a much smaller upside, and while I left recently, most of my potential is still tied to a future event; CoachNow remains the category leader, so I’m rooting for it.

When did it hit you that you were basically diluted out?

Only after survival mode eased, around 2019, did I see there might be no meaningful payout for me, yet I felt obligated to keep going for investors and the team, which took a heavy toll on my health.

That sounds like the opposite of entrepreneurial freedom.

It was, from awkward golf course check-ins with investors to feeling owned by boards and acquirers; the outside looked like a win, but the fine print was brutal.

Give us the big takeaways you’d want founders to hear.

Build a strong founding team, charge from day one, and aim for real revenue before chasing capital, because subscriptions work and fads fade; treat it like a business, not a user-count contest.

And on deal mechanics?

Avoid convertibles with nasty ratchets, be careful with SAFEs and caps, track the cap table closely, and get seasoned advice; my biggest unforced error was asking to replace myself as CEO when we raised, when what I needed was a tight operational partner, and the outside hire underdelivered and was later shown the door.

How were you paid through all this?

Well below market the whole way based on the dream of a big exit, and by 2024 I realized I would have earned more by staying a coach while many of our users, using our tools, out-earned me.

Did you ever force the acquirer’s hand to pay up or listen?

Not really; post-acquisition they assumed they knew better, burned seven figures building the wrong things, sidelined me for years, then handed the reins back after the detour.

So you left in early 2025 and still hold common stock, hoping for a good outcome.

Exactly, and I’m especially hoping for my parents and early backers.

Do institutional investors deserve their aura of being the smartest people in the room?

It’s less about intelligence and more about incentives and experience, so I now prefer operator-led or athlete-backed funds who decide faster and negotiate fairer than purely financial players who can be slow and aggressive.

You’ve distilled this in a new book—tell us about it.

It’s called How to Fuck a Unicorn, a blunt, fast read for founders, investors, and acquirers on how great ideas get mangled by money and how to avoid it, complete with inside jokes on the cover and no fluff inside.

Where can people find you, and any parting thought?

Find me on LinkedIn under my name, and remember, if you had the idea and the grit to build it, keep your confidence and treat outside money as gasoline, not permission.

That’s a great place to leave it; we’ll link Spencer’s profile and book in the show notes.

That’s today’s episode with John and Spencer; hit subscribe, watch the full interview on our Built to Sell YouTube channel, and find links and credits on the episode page at BuiltToSell dot com. I’m Colin Morgan, and we’ll talk again soon.