If you launch a startup and sell it fast, by Silicon Valley standards, you’ve made it.
But selling your company can actually be a miserable experience, warns Nate Kohari, who founded a company called AgileZen with his wife Niki, and sold it to Boulder-based Rally Software in 2010.
He’s been writing a series of posts that show the dark, painful side of being acquired.
Kohari and Niki created AgileZen, an app for doing Kanban-style project management on the iPad. They were still the only two employees in 2010, with $US70,000 of revenue under contract when Rally Software called, flew them to its Boulder, Colorado, headquarters. and offered to buy their company.
“The payout was split between cash and a grant of stock up front, good compensation in terms of salary and two years of stay-pay bonuses for both of us, as well as stock options on a three-year vesting schedule,” Kohari wrote.
The money was decent. But what convinced them to sell was “we felt like we had no idea what the $US%!* we were doing.”
Not thrilled with Boulder, they moved to Rally’s Raleigh, North Carolina, outpost to work. “We felt like we made it.”
But things went wrong from there.
Kohari told Business Insider, “We really had hoped that joining Rally would put ‘rocket fuel’ behind what we were trying to do, but it often ended up feeling more like we were slogging through molasses. No one, including us, could figure out exactly how we fit into their overall strategy.”
It was also a mistake to be working remotely instead of the mothership in Boulder, he said.
“I made it just over two years before they decided to show me the door. My wife (and co-founder) Niki left the Zen team at that point, but stuck around a while longer in a different role,” he said.
Kohari landed a job elsewhere and then he lucked out. Rally had a successful IPO in 2013 and their stock was finally liquid and worth enough money to let them quit their jobs and bankroll another startup. They’re working on TaskTorch, but the details of the company are still under cover.
Looking back, he says “I wouldn’t say I regret selling the company. I learned quite a few things — many of them the hard way — that I would never have learned if we hadn’t joined Rally.”
Still the story shows that a “nice fast exit” and “living happily ever” after aren’t always the same thing.
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