How Ralph Wagner Pulled a Donald Trump & Other Stories

Ralph Wagner is a born storyteller. He is a master of the pregnant pause. His sense of irony is deft. Plus he has a lot of material to work with from his long and full life as a founder and angel investor.

In the second episode of the Angel Invest Boston podcast, Ralph Wagner tells some highly entertaining stories that highlight the perils and opportunities created by technological innovation. You can subscribe to the podcast on iTunes at and on Google Play (alas, Google Play works only on desktop or laptop browsers, not on mobile).

  1. Vivid Narrative of Technological Disruption: Ralph Wagner’s first encounter with personal computers was a scary experience. He was in the business of providing financial projections to the management of savings banks. He used the first spreadsheet software, Visicalc which ran on a time-shared mainframe computer (i.e. a big honking thing), a service which costs thousands of dollars per month. One day a friend invited Ralph to his store to see the first really usable Apple computer, the Apple II. What startled Ralph was to see the same software he used on the expensive time-sharing service, Visicalc, running on the Apple II desktop computer. Any moderately successful person could afford an Apple II, never mind his banking clients. Suddenly his consulting business was threatened by this innovation. Of course, the Apple II also created huge opportunities for Ralph, but that’s another story.
  2. IBM Provided Munificent Employee Benefits in the 1950s: IBM paid for Ralph to get his MBA at Columbia, then sent him to programing school and then to sales school. The icing on the cake is that it payed him 25% of his IBM salary while he was serving in the Air Force. While some employers (such as Bain & Co.) still pay for MBAs, getting paid while in military service is now a thing of the past. While IBM is an important company today, it had an unbelievably strong market position in the early days of the computer industry. This near-monopoly power allowed them to provide a lot of perks and still be profitable.
  3. Never Count Your Chickens Before They’re Hatched: Ralph was on the board of Netegrity when it was sold to Computer Associates. In prior years, Netegrity had been one of the best performing stocks on the NASDAQ. For having helped put the winning team together Ralph had been rewarded with an attractive stake in the company. The stock had been trading in the 30s ahead of the sales when one missed quarterly forecast reduced the company’s stock price to $12 per share. Ralph was glad to exit at that price since his holdings were highly appreciated already.
  4.  Ralph Pulled a Donald Trump: When Ralph sold his first company it was to a publicly-listed corporation called Mathbox. Because of tax rules it made sense to receive half the payment in cash and the other half in shares of the acquirer. It seemed like a brilliant idea since the shares in the public entity were supposed to be liquid. Unfortunately, Mathbox went under and the shares became worthless. Because of the tax loss carry forward provision also employed by Donald Trump, Ralph was able not to pay any income taxes for well over a decade.