How three friends turned a niche SaaS into a 6x exit
“Tad Fallows founded a SaaS business called iLab in 2006 with two partners and eventually sold it to Agilent Technologies for 6X revenue,” shares Sam Thompson, a Minneapolis business broker and the president of M&A firm Transitions In Business. “In this episode Tad talks about the hidden risks in earn-outs, turning customer funding into product development and avoiding spoiling your kids after a big liquidity event.”
In 2006, Tad Fallows and two friends spotted a problem inside Harvard’s cancer labs: researchers were spending more time managing freezers, fruit flies, and mice than actually doing research. They built iLab, a SaaS tool for universities and hospitals, bootstrapped it to a high-7-figure ARR, and eventually sold it to Agilent Technologies for roughly six times revenue.
But the journey wasn’t smooth. Cash was often razor-thin with 75 employees on payroll, and an early inbound offer at 3× ARR forced Tad and his partners to decide whether to take the deal or gamble on building more value.
You’ll learn how to:
- Turn customer funding into product development—while keeping the IP.
- Use add-on modules and international logos to triple your total addressable market.
- Push valuation from a “meh” multiple to a life-changing one.
- Spot the hidden risks of earn-outs—and why some founders never see the payout.
- Protect employees and culture when choosing between PE rollover equity and a strategic all-cash deal.
- Face the emotional whiplash of suddenly having “enough” money, yet struggling to stay motivated.
- Avoid spoiling your kids after a big liquidity event.
- See how thousands of post-exit founders actually invest their wealth—and why most ditch the traditional 60/40 portfolio.