This is the first of the six-part “SA 100 Insider” series, looking at the passions, hobbies, and pursuits of Silicon Alley’s tech elite.
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Bryan Goldberg and his three co-founders had to wait eight torturous months to learn the fate of their startup.
Technology sites were reporting acquisition rumours about their company, Bleacher Report, and each story made the founders cringe.
The rumours were true: Bleacher Report was on the block. Turner Media, owner of CNN, was interested in buying the sports media site.
But no paperwork had been signed and Bleacher Report didn’t want to spook the potential buyer.
“It went from something that seemed out of reach, to something that was remotely possible, to something we thought might happen, to something we thought would probably happen, to something that seemed almost certain,” Goldberg says.
“You go to bed every night thinking there’s a really good chance this deal is going to go through, and knowing at any minute it could come apart for the smallest, most abrupt of reasons.”
Ultimately, Turner purchased Bleacher Report for $US213 million.
After raising $US40.5 million, each founder only owned a sliver of the company. But that sliver was still worth more than most people make in a lifetime.
What’s that life-changing moment like for a founder?
It’s a multi-phase, emotional roller coaster.
Phase 1: Relief and Disbelief
Most founders, like Goldberg, feel relieved then euphoric when their companies sell. It takes a while for reality to set in, even after the money hits their bank accounts.
Charles Forman, the founder of gaming company OMGPOP, experienced disbelief. His acquisition came more suddenly than Bleacher Report’s.
Forman left OMGPOP in the hands of his colleague, Dan Porter, to start a new venture. When Porter told Forman about a ~$200 million acquisition offer from Zynga, it was unexpected.
The offer stemmed from the abrupt success of an OMGPOP mobile game, Draw Something, and Forman only had $1,700 to his name at the time.
The acquisition news came as such a surprise, it put Forman in a daze. He wandered aimlessly into the road and almost got hit by a car.
“I walked across the street, and all I heard was ‘honk,'” Forman told the New York Times then. “It was surreal.”
While a thicker wallet is nice for startup founders, telling employees about an acquisition can be even more rewarding.
Phase 2: Tears, Vegas and “That’s It!?”
Wiley Cerilli, the founder of a business management tool Single Platform, remembers calling one of his executives, Kenny Herman, with good news. Constant Contact had acquired SinglePlatform for $US100 million in cash, stock, and employee incentives while Herman and his wife were away on their honeymoon.
While the couple was still in the airport, Cerilli told them they were millionaires. The couple spent the next few minutes embracing.
Dan Porter also remembers delivering acquisition news to OMGPOP employees.
There was a celebration at the New York City headquarters which involved popping open a bottle of champagne.
Porter then sat down with each employee and told them how much money they had made.
An entire day of work was then dedicated to paying off debts, like student loans and mortgages.
Goldberg recalls mixed reactions from Bleacher Report employees. Bleacher Report’s executives distributed paperwork to them that stated the number of shares each owned and the share prices.
Two calculators were made available so employees could punch in numbers and determine their new net-worths.
Some were ecstatic and wrote the founders thank-you notes; others expressed disappointment.
“People were texting their boyfriends and girlfriends,” Goldberg says. “Some people’s reactions were like, ‘Oh my God, this is more than I ever could have imagined.’
“Some people were like, ‘That’s it?!’
“You never knew what it was going to be.”
Later, Bleacher Report employees took an unofficial, un-sponsored company trip to Las Vegas. Cerilli and the SinglePlatform team took one, too.
Phase 3: Remorse and Nostalgia
No matter how rich a founder becomes, the acquisition high doesn’t last forever. Once it’s over, some founders feel remorse.
“When the money hit the bank account, I was just relieved that this gruelling eight-month process was over,” Goldberg recalls. “Then you realise, I don’t own this [startup] anymore, which is a very powerful feeling.
Then you realise, I don’t own this [startup] anymore, which is a very powerful feeling.
You go on the website and it just occurs to you, ‘This isn’t mine and it doesn’t belong to me in any way other than from a sentimental standpoint.'”
One founder who was left bitter likened his acquisition to getting hit by a car, then getting disability money for a hurt leg. While he admits the money is nice, all he wants is his healthy leg back.
Another founder, Josh Abramson, has had years to reflect on his acquisition. Now he just feels numb.
“The moment we sold felt great,” Abramson recalls. “It was something I’d been working so hard to accomplish for years. I was basically jumping up and down for weeks.
“The excitement of having the liquidity lasted about six months, then it just felt normal. My life didn’t really change at all.”
Abramson co-founded College Humour in his University of Richmond dorm room. College Humour sold a 51% stake to IAC for $US20 million in 2006.
IAC also got two of College Humour’s other brands, Vimeo and Busted Tees, in the sale.
Abramson says he has no regrets about selling his company, although it’s sometimes tough to hear Vimeo’s current valuation.
“I feel sort of numb about it at this point,” he says. “[Selling the majority stake in College Humour] is the single most important financial decision I’ve made in my life so far and I made it as a 24-year-old.
“I don’t regret the decision — I still think it was a smart thing to do at that time … As you can probably imagine, it’s the kind of decision that gets replayed in your head every now and again.”
Phase 4: Back to Work, with Different Priorities
Once you’ve tasted your first startup win, most founders don’t crave retirement or a beach. Instead, founders long for the madness of a startup all over again.
“I think with most founders, you want to work the rest of your life,” says Goldberg. “I want to be working hard when I’m 80 and having money doesn’t really change that.”
Goldberg has already started a new media company, Bustle.
“I just knew that I had to find another endeavour because every time I go on Bleacher Report, all I can feel is, this isn’t my baby anymore,” he says.
Abramson agrees. He recently purchased Busted Tees back from IAC so he could run a smaller company again.
This time, his priorities are different.
“It’s literally the biggest cliche that exists — but people still forget sometimes that money doesn’t buy happiness,” Abramson says.
“I expected that selling my company would make me feel a certain way and it didn’t.
“Obviously having financial security is awesome to a certain point, but I realise now that having a fun company with awesome people I enjoy spending time with does so much more for my day-to-day happiness than more money in the bank ever would.”