Christopher Gray has a word of advice for founders hoping to sell their companies.

Path

Gray is currently the CEO of Path, an affordable AI-powered platform for academic and career readiness. According to its LinkedIn page, Path offers unlimited practice tests, predictive scoring, and step-by-step solutions to support users preparing for career certifications, college admissions, and graduate school exams.

“When this pandemonium happens where everyone’s freaking out because now I need to make a certain score or I need a pass or a certain score to make the SAT to graduate, now we can swoop in and be able to say, ‘We can give you that, make it more affordable. Predict what you’re going to make before you take the test,'” Gray said on the “Black Tech Green Money” podcast hosted by AFROTECH™ Brand Manager Will Lucas.

Scholly

Prior to focusing on Path, Gray served as the co-founder and CEO of Scholly Inc., an AI-powered college scholarship app on a mission to help students eliminate their debt. The platform has helped students secure over $100 million toward their higher education. It also caught the attention of investors Daymond John and Lori Greiner on “Shark Tank,” who invested $40,000 into Scholly. The company went on to earn $30 million before its acquisition by Sallie Mae in 2023, according to Inc.

Scholly Acquisition

Speaking about the acquisition, Gray commented on the podcast, “When we got acquired by Sallie Mae, you went through the diligence process… and Scholly’s actually profitable. I only raised $400K, so I had the majority of equity in my company… That was all well for me, and it was ultimately my decision to sell.”

Gray recalls receiving pushback from the Black community regarding the acquisition. He mentions, with the $400,000 he raised, those investors are still looking for their financial commitment to be returned, and oftentimes this will be through an exit.

“The Sharks and other people, when you take someone else’s money, they have to get it back,” he said. “And nine times out of 10, they have to get that back through an exit. And that’s something that isn’t well known in the mainstream Black community. That capital cannot be taken without it being returned. And an exit is the way to do that. So thinking about what an exit strategy could look like is really important to think about in the beginning of the journey. It’s not being transactional, it’s just understanding the reality of growing a business and the liquidity events that have to come with that.”

Advice To Founders Looking To Sell

Gray also shares advice for other founders who are looking to have their company acquired, and that recommendation is to build their business with artificial intelligence to scale faster and more cost-effectively. He says he was able to pocket more money following the acquisition of Scholly in comparison to some of his peers, who had more time under their belt as a founder.

“I grew Scholly profitably, but through that process of selling the company, I inadvertently learned that I know I’ve seen X buyer person sell their company for this amount,” Gray mentioned. “I made infinitely more take-home money in my pocket than they made. I’m talking about people selling their company for $250 million and walking away with $2 million after 10 years of work… I think that it is important for founders, and I think AI has presented an opportunity where you are able to build things faster for much cheaper. I suggest a lot of founders lean in to that and do milestone-based fundraising so you can get to key milestones. So you can have leverage in these negotiations.”

Watch Full Episode Here

To watch the full episode of the “Black Tech Green Money” podcast, click here.