CARY – Jonathan Hayes, founder and CEO of Reward Stock, which sold last fall to financial services giant Experian, “had great timing,” says David Gardner, partner at CoFounder’s Capital, an early investor in the company.
Hayes, probably best-known for his appearance on “The Shark Tank,” where he landed an investment from Dallas Mavericks owner Mark Cuban, sold the travel-related startup earlier this year just before the COVID pandemic.
The news only emerged recently – and Hayes is reluctant to discuss what happened.
Reward Stock helped its users, who paid an annual fee, make the best use of their frequent flyer points, and hotel and credit card reward points. “His sale timing was perfect,” Gardner said. “It happened before it all shutdown, which we would have struggled with. Experian is a large company that takes the long view. It’s not a startup where losing a month of sales can be devastating.”
CoFounders Capital invested a total of $590,000 in Reward Stock, beginning with $350,000 in 2015. Gardner said the sale was not huge, but was a solid base hit, delivering a good return to CoFounder’s investors, Reward Stock employees, and himself. Actual financial details of the purchase were not disclosed, but Gardner said it was a multiple of the CoFounders’ investment. “It was a 100 percent cash acquisition,” he added.
Gardner said he’s glad to see an entrepreneur of color succeed so well. But he also noted that Jonathan the quintessential startup entrepreneur. “He’s a Stanford grad, a smart kid, who was working on Wall Street as an investment banker making tons of money. He walked away do his own startup.”
Jonathan Hayes of RewardStock
Hayes has said in interviews that he got the idea for the company after he spent three weeks researching how to use credit card points to pay for his honeymoon to the Maldives. He ended up spending $200 on a $40,000 trip. He thought there had to be a better way to get the most from reward cards, and proceeded to create an algorithm that could do the same task in seconds.
In addition to annual membership fees, he had affiliate relationships with credit card companies and sold services to others.
The Reward Stock website says the company is at capacity and not accepting new members at this time. Hayes has said he will stay with the company for now.
