Awareness Tech

Brad Miller was winding down his role at Perimeter, an internet security business where he and a partner had just sold half the company to Goldman Sachs. Looking for his next venture, he initially considered buying another company for Perimeter, but ultimately decided to acquire a business for himself instead. That business was Awareness Tech, a secure internet security software company with dual market positioning: a B2C play helping parents monitor and control their children's online activity, and a B2B play focused on employers managing employee productivity.

When Miller acquired Awareness Tech in 2010, the company was doing $5 million in revenue but losing $1 million annually. Miller paid $6 million for the acquisition—$5.5 million of his own capital and $500,000 from a financial partner, supplemented by $1 million in bank debt. The founding team was smart but had made a critical operational mistake: they had built the business as a software-as-a-service model but were selling it as a one-time purchase. Customers would log in indefinitely but the company only got paid once.

Miller's first move was straightforward but transformative. He converted the entire business from one-time payments to recurring subscription billing. This single change added $2 million in revenue overnight, bringing the company from $5 million to $7 million in annual revenue. More importantly, the business flipped from losing $1 million to making $1 million in profit. The move also freed up capital—by letting the two founders leave the payroll, he saved $400,000-$500,000 annually in salary expenses.

The company's primary growth channel was paid search (PPC), spending approximately $300,000 per month—roughly $3.6 million annually. This was the biggest source of revenue, which meant Miller had to carefully monitor unit economics, measuring how much revenue came back for every dollar spent on ads. The team obsessed over cash-basis reporting to see real-time sales and ensure they were getting positive return on ad spend.

Miller's strategy centered on inorganic growth through strategic acquisitions. His first acquisition came in 2016 when his wife discovered a parental monitoring app online and suggested he buy the company. Miller found the company and negotiated to acquire it. During the five-month negotiation window, the acquired company's revenue doubled from $50,000 per month to $100,000 per month—and the sellers tried to double the purchase price mid-deal. Miller refused to budge, hung up the phone, and didn't answer for three days. The sellers, who had already spent their bootstrapped capital and couldn't afford to wait longer, came back begging to close the original deal. Miller closed it for $3 million ($1.5 million upfront, $1.5 million contingent on revenue hitting certain thresholds).

By 2016, the combined business was approaching $12 million in revenue. That same year, Miller was extracting healthy profits but reinvesting them into growth and debt paydown.

His second acquisition in 2018 was even more dramatic. Variado, their biggest competitor, had been acquired by VCs for $45 million when it was doing $15 million in revenue and $6 million in profit. When a VC called asking if Miller would be interested in being acquired as a "tuck-in" for another deal, Miller deduced that Variado must be struggling and called his investor contact to explore. Miller's team initially proposed paying $19 million for Variado, which was then doing $12 million in revenue. But as negotiations dragged on over months, Variado's revenue collapsed. By close, they were on an $8 million run rate, had run out of cash, and couldn't meet payroll. Miller acquired the company for $3.5 million instead—a stunning 82% discount from the initial asking price.

Miller's first move post-acquisition was to cut 30 people from Variado's payroll. That single restructuring move swung the acquired business from losing money to making $2 million in profit. The combined entity was now doing $20 million in revenue and $6 million in profit.

Miller held the combined business through early 2020 and sold it in late 2020 for $35 million—a $45 million total return on his initial $5 million investment, or 9x his money. He also extracted $12 million in dividends along the way, meaning he got back more than his initial investment twice over before the exit.

However, the post-sale story reveals why founder-operators and professional management diverge sharply. The acquirers immediately hired expensive professional management and shifted the business from cash-basis accounting (which showed real-time sales) to GAAP-basis accounting (which lags reality). They spent hundreds of thousands rebranding and redesigning the website while losing focus on daily business operations. The massive fixed cost base of new management ($2 million in overhead) suddenly became untenable when revenue started declining. By March 2021—just five months after Miller left the board—the company missed its bank payment. Revenue had cratered from $20 million to a $10 million run rate, and the business was in restructuring. Miller's prediction: the company will eventually get distressed enough that he'll buy it back for pennies on the dollar and grow it again.