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Last night, Milo co-founder Jack Abraham explained how he sold his startup to eBay for $75 million after less than two years.He was speaking to a roomful of entrepreneurs, investors, and bankers at Rocketspace in San Francisco.
Here’s where it started: after a four-month gig as a consultant, Abraham didn’t want a normal job ever again in his life.
He was set on coming up with a big idea. Around the same time, in 2007, he became fascinated by shopping and how it related to e-commerce.
In 2008, he started a local shopping startup called Milo with two friends. The friends got an apartment in Philadelphia and slept on airbeds while they worked feverishly to build a product. After some user testing, the team realised that people wanted to see and feel things before they bought it online. The time was right, he said, so he dropped out of school and moved to Silicon Valley, away from his friends and family.
Working out of an apartment in Palo Alto, Abraham began to network. One of Abraham’s friends knew Keith Rabois. Abraham asked to be introduced. But Rabois didn’t want to meet him.
Abraham didn’t give up. He had big plans to bring every product on every shelf onto the Internet and he wanted to see if Rabois was interested in investing.
Finally after enough persistence, Abraham met Rabois. And sure enough, five minutes into the meeting, Rabois made a snap decision to invest. Rabois helped bring in other A-list investors such as Kevin Hartz of Eventbrite and Jawed Karim of YouTube into the seed round.
Abraham kept a low profile while he built out his local shopping company. But after they raised an additional $4 million, people started to talk about them. Suddenly, 10 companies were interested in buying Milo.
Abraham stayed exclusive with eBay after they made their offer. “It’s a relationship. You date to get to know each other. When it’s getting serious and you begin to shop around, it’s a risk,” Abraham said.
Abraham said he didn’t want to be acquired by Microsoft or Google, and knew eBay was a good fit. He adds, working on a partnership with a company is a great way to get to know them.
Felicis Ventures’ Aydin Senkut, who helped connect Milo and eBay, explained that while 90 per cent of success is about showing up, that extra 10 per cent matters. And that’s where investors can help.
“There are a few things that we can do for entrepreneurs that matter. We can help with the exit side by building relationships with acquirers. I met people at Goldman Sachs, who invited me to an event with people at eBay,” Senkut said.
He later brought in three companies to Mark Carges, the chief technology officer of eBay. Carges wasn’t interested in those options. After Carges scrolled through the rest of Senkut’s portfolio of companies, Milo stuck out and he asked Senkut to make an intro to the shopping startup.
On December 2, 2010, eBay bought Milo for $75 million.