In this episode of the "Failing to Success" podcast, host Chad Kalecki interviews Adam Spector, founder and CEO of Levy, a back‑office operations firm for high‑growth startups. Adam explains that Levy spun out of a previous venture in 2022, now approaching $3 million ARR with about 40 employees. He recounts the predecessor’s $10 million raise, the challenges of building a product‑centric back‑office solution, and the decision to pivot to a services model. Adam also details his extensive angel investing experience—over 150 early‑stage deals—through the Autopilot Fund and two earlier, non‑standard syndicate structures that pre‑date AngelList. He shares his investment thesis: prioritize founders who are deeply dedicated, optimistic, and willing to stay the course, using founder‑to‑founder conversations rather than formal pitches. Fund performance metrics are discussed, including a target IRR of ~40 % for top funds, a 10 % unicorn rate across his investments, and specific return snapshots for his three funds. Adam reveals his personal net‑worth allocation to startup investing (15‑20 %) and argues that his daily exposure to founders gives him an informational edge. He reflects on his first startup, eUS, a verification‑as‑a‑service that failed due to being too early, but which led to a successful investment in Checker. Throughout, Adam emphasizes the importance of staying in the game, leveraging personal advantages, and contributing to the ecosystem via his podcast "Entrepreneurial Excellence" and various online channels. Contact information for Levy (levy.company), the Autopilot Fund (autopilot.fund), and his social media is provided at the end.
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Today on the show, I'm happy to have Adam Spector. He's the founder of Levy. They run your back office operations team for world-class startups. Adam, when did you actually found this business?
So Levy was founded in 2022, although we were a bit of a sort of spinoff from a previous company that I had. So you learn something from one, you move to the next, and you take the really good parts and, and keep moving on.
And what have you scaled this business to now in revenue?
So yeah, so in the past year and a half, we are getting close to $3 million in ARR and almost 40 people.
40, 40 staff now.
Yeah.
So you said you learned from the past one to now create something better. What happened in the past one?
The past one. So we raised about $10 million from top-tier investors, um, out there. It was, in that sense, a success rate. Silicon Valley should have looked at fundraising, fundraising as a metric for success, which by the way, it's not in any way. It's a vanity metric. However, we raised a bunch of money to automate back office work and it was a great idea. It still is a great idea. In fact, I'm still working on that idea in a different way today, but it turned out there were so many edge cases to deal with that it was almost impossible to code it up properly as a product. So we had this sort of services business where it was going really well. It was break-even. It wasn't the best business because it wasn't the main focus, but a services business to run startups' back-office operations, HR, finance, compliance, and equity. And that is annoying. It's tough to do. It's not a core competency of any founder. It's not why any founder starts their company, and yet it needs to be done. It's basically like being the plumber and taking care of the plumbing. It's doing back office operations. And so we essentially spun out this teeny, teeny little side hustle that we had going on as part of Abstract Ops, the previous company that became Levy in late 2022.
You also have invested in a lot of startups, right?
I've had the privilege of investing at this point in over 150 different startups, almost all at the angel stage.
And it's a, what's the fund called that you're a part of right now?
Current fund is called the Autopilot Fund, but I've had 2 others before that and was doing basically in the fund structures in the early days were not standard funds. They were more a bunch of, it's part of the theme, I think, of a lot of things that I've done, but basically the idea that you create syndicates. So we were creating syndicates well before AngelList syndicates was a thing. This was 2012, I think, or so when we started doing that. It was essentially creating syndicates with wealthy in this case, mostly East Coast individuals, which is where I was from, but I was living in San Francisco. I had access to deals and founders and they wanted to do alternative investing. And it was a kind of interesting match made in heaven well before any of this was a thing. And so that's when it started and it's just continued from there.
So you're investing in startups, you're running startups, and we both know it's a very high-risk game, right? Not all of them work. So what's your thesis or philosophy going into both working on them, devoting your time to them, and putting money into them?
Yeah. So actually it's funny. So I also have a podcast, by the way, related to, it's called Entrepreneurial Excellence, Chad. And the thesis around that is essentially what does excellence look like? How do you decide what the right investment strategy is and the right company to put your money into? Now, even the best investors in the world have a huge amount of failure. This is actually the difference between founders and investors and where founders have to be actually really careful because investors spread their bets out. So as an investor, I'm spreading my bets out over a lot of different companies and I'm assuming a fraction of those, hopefully a small fraction, but a certain pretty good percentage are still going to fail. As an investor, as a founder, I'm all into my company. That's the only thing I can spend time on and energy on. So the big challenge in focus is how to figure out what the best investments are with a minimum amount of time, because I'm also working on other projects. And what I really look for when I invest are founders who are incredibly dedicated and frankly, like, bullheaded optimistic about what they're doing. So it is really hard being a founder. I feel that every day myself, but because I'm a founder, I'm also able to have these great conversations with other founders and understand what they're doing and why. And talk one-on-one as a founder, not a pitch. Don't tell me why you're going to be great because every founder is going to tell you some story. Let's talk real. Why are you energized and passionate About this market, because if you aren't, things are going to go wrong and you will not be able to push through. And part of the theme that we're probably going to talk about more is just being in it to win it and sticking around. Being there to stick around enables you to be in the game, and being in the game means you have a chance of hitting a home run. You have a chance of being on the pitch and scoring a goal. You have a chance of getting a touchdown. But if you're not in the game in the first place, that's never going to happen. And so you need to be there to ride the right wave to achieve that end goal.
That brings us to one of your first businesses, right? Which didn't work out as planned.
Yeah, totally. My very first business and startup, a company called eUS, we were Virtue Us. We thought it was funny, but we were doing, we were literally doing essentially verification as a service. So this is early days of Airbnb, Uber, Lyft. Like literally I got one of the earliest Uber rides ever from, it wasn't even officially an Uber ride. It was literally the co-CEO of Uber at the time, not Travis, but I think Ryan was his name. We were at an event together on the other side of San Francisco and we were leaving the event and we lived near each other and he was like, do you want to ride with me? And we talked about Uber the whole way on the ride. So in a sense it was like one of the first Uber rides. But, but our company at the time was doing verifications and saying, hey, how do you trust these people? These are early days. People probably don't remember, but the idea of getting in a random person's car. Or renting some random person's house was totally insane. And so we were trying to verify what everyone was doing. It didn't work. We were too early and it didn't make sense for at least the US market. But in the process of it failing, we identified this awesome current check market that we arguably should have stuck with because we actually started getting real traction there. But we shut down the company, which was a failure. We actually had exit opportunities, which we didn't take, which was also a big mistake. I mean, we can talk about those mistakes and why we should have taken those. But the one upside of all that is it led me to the moment Checker became a public thing. When it got into YC, I noticed them right away as that is a company we need to invest in and got my fund to invest in Checker in the really early days. And that's probably a 100x plus investment for us.
So those 100x investments, how often do they actually happen?
Gosh, the best investors probably had that happen 1 to 5% of the time, maybe, probably less than that. I feel lucky enough that about 10% of the investments I've made, maybe actually a little bit higher than that, are currently unicorns despite down markets and down valuations, are unicorns across all of my funds. They've either— the very first fund has paid back all the cash that was invested and we're still waiting for most, pretty much every single one of those companies that we have. We probably have 6 or 7 of those that are Heading towards IPO. So waiting for those to head to IPO. Second fund is probably up at least 2 to 3x at least at this point, but still waiting for some exits to pay back. We paid back about 50% of total invested capital. And third one's too new to tell, but yeah, I know it's, if we can have that track record on a regular basis, we'll be easily in top quartile or higher of investors and funds.
What's a strong fund investing in startups do? As far as numbers-wise on return on investment?
Oh, they're looking at probably, I think top funds right now are probably like an IRR of about 40%. So internal rate of return. So it's a good way of looking at your cash over time essentially and saying, hey, if I invested 10 years ago and I still haven't had an exit, that actually reduces your IRR. Whereas if I invest money today, in 12 months from now, so a year later, I have a 2x exit, that is a really good IRR. So right about 40%, like good funds are hitting like 40%. If you're crushing it, you're maybe a 50% IRR. And I don't know the exact numbers for what the stock market does from an IRR perspective, but the benefits, by the way, of the stock market is your money is much more liquid, right? So the money I invested 10 years ago is still locked up in these startups. You can get some exits over time, which we've done. We've taken money off the table when we had opportunities to do secondaries. And that's a great way to help your IRR actually, because you can of course reinvest that cash. But you're talking probably 40% IRR. In my earliest funds, we haven't done it recently, but I think we were looking at 50-plus percent. IRR that's gone down since we last ran those numbers, but they were looking pretty good.
Personally, what's your allocation of net worth that you devote to these types of investments?
That's a good question. I bet my personal allocation's probably 15 to 20%, but that's way higher than most people should be at, of course. But I feel like I have an unfair advantage, right? I have essentially alpha in the ability to pick notice C startups because guess what? I'm in it every single day. I live in San Francisco. I meet startups every day. I talk to them every day. I have people sending me deals every day. I have probably a better ability to make the right pick than the average person off the street. Whereas on the other hand, I don't have any good way of— I'm not better and I'm almost certainly way worse at analyzing individual public company stocks. I don't know what's better or worse there. How would I know? There are people who spend their entire careers analyzing 5 or 10 stocks and reading every single public statement about those stocks from the founders and the CEOs and the entire market. So I don't have any special knowledge, whereas when it comes to startups, I think I do. And at least it's been proven out by a lot of the investments that I've seen.
Yeah. And it's focusing on what you do really well. And then that's what gives you that advantage.
Yeah. And everyone should take their special advantage and dive deeper into it. That is arguably what leads to greater joy in life, being good at something. leads to enjoyment of it, leads you to do— you doing it more, leads to you getting better at it, and hopefully then really becoming a thing that just you love and love doing. And by the way, I enjoy investing and I think it's great, but what I really love is startup stuff. So there's a reason why I stayed a founder and do investing as a side thing is because I prefer— I'm not sure why sometimes, because it's really hard being a founder, but I prefer being a founder. in building companies than being a full-time investor because they are very different jobs. But by being that full-time founder, I have an opportunity to see and do interesting investments on the side where once again, I'm not being pitched a startup. I'm being, having a conversation with a founder to founder. What are your real challenges? Why are you building things the way you are?
So Adam, if any of our listeners wanted to get in touch about the funds or Levy, how could they do so?
Yeah, absolutely. So Levy, we're levy.company, levy.company. There's a ton of information there. You can also find the podcast Entrepreneurial Excellence. There, or of course on Spotify, YouTube, you name it, autopilot.fund. So you can find us there. And also of course on Twitter, LinkedIn, all the usual good places where you can find Adam Spector and my information and the stuff, the content that I put out to hopefully help the overall ecosystem. That is in the end what brings me joy is hopefully leaving the world and the startup ecosystem better than when I arrived because entrepreneurs at the heart of a successful world economy, you name it, is people who want to start and build things and make improvements. So if I can be a small part of that, it brings me joy. Well,
thank you, Adam, for coming on the show. Everybody listening for another episode of Failing to Success. I'm your host, Chad Kalecki. If you like the show, make sure to subscribe and we'll see you next time.
