Here’s what we heard from a well connected and trustworthy insider about the early days of Dailymotion, the “French YouTube”. It’s a teachable moment for many tech entrepreneurs and investors. (Keep in mind it’s just a story from one source, however.)
Think back to 2007.
YouTube just got acquired by Google for an eye-popping $1.6 billion dollars after vertiginous growth. News Corp had bought MySpace, which was headed for a billion dollar revenue run rate and looked like it would own the world.
Meanwhile the young video sharing site was on a tear, growing from 2 to 40 million uniques in its first year.
The board of Dailymotion decided to put the site up for sale, for 360 million (our source doesn’t remember if it was euros or dollars).
No one would bite, except News Corp, which sent back a term sheet for 100 million.
Dailymotion’s board laughed them out of the room.
Then a few months later, they came back to News Corp saying they were willing to reconsider. This time it was News Corp who turned them down.
So Dailymotion raised a new round and tried to go for it.
Today’s deal between Dailymotion and Orange values the company at $165 million, which means it hasn’t gained much in market value in over three years.
This doesn’t mean Dailymotion’s exit isn’t good for everyone involved. But it’s worth keeping in mind that since then Dailymotion burned through roughly $60 million in venture capital, which doesn’t seem to have translated to much of an increase in value.
It’s also a reminder that sometimes, when there’s a good offer on the table, you should take it.