“Offered too early” is traditionally a derisive time period thrown at founders who exited startups nonetheless on an upward trajectory, and it’s true that nearly each profitable firm went by way of durations of curiosity from potential acquirers, even when it was simply informal inquiry. However after a decade in enterprise capital, alongside my immense respect for the founders who simply maintain constructing, I’ve additionally come to understand that understanding when to get out issues as a lot. And so trying backwards over the previous couple of years of ZIRP Increase, we are able to now honor these people who obtained the bag for his or her corporations by taking the fitting provide on the proper time.
Right here’s what I’m purposefully excluding: SPACs, crypto, founder/investor secondary that didn’t embrace the crew, potential fraud, soft-landings dressed up as acquisitions, by no means compensated their groups with fairness, and so on. That is about really attention-grabbing corporations that in all probability needed to make onerous choices about elevating extra capital or promoting. Though I wasn’t concerned within the conditions I’m naming under (and so can’t 100% vouch on the small print), they’re ones which by no means had any backchannel stink on them and all appeared to achieve success sufficient earlier than M&A (stage-specific – ie the extra mature corporations had confirmed greater than the youthful ones did). I’m additionally positive there’s a bunch that I’m forgetting – be at liberty to disagree or develop the record in your personal publish.
Body.io by Adobe: Pure touchdown spot for a fast-growing SaaS video creation firm at reportedly $1.275B in money. I’m positive the corporate may have stayed unbiased and continued constructing however they exited throughout a interval the place multiples had been excessive, antitrust wasn’t a difficulty, and to an organization that may carry the product ahead.
Honey by PayPal: $4B in money for this extremely mainstream product – possibly one of many final nice non-gaming client product acquisitions on the books? I assume subsequent section of the enterprise would have required increasingly more negotiated service provider/CPG offers, construct out the ad community facets, and at all times face some privateness/client information laws? What a win!
Locker Room by Spotify: Bear in mind when everybody wanted their Clubhouse clone? Spotify gave Betty Labs an estimated $67m for the Locker Room app that turned Spotify Greenroom. I consider they’d solely raised a seed spherical so founders/firm nonetheless had majority of fairness (hopefully!). Proper place, proper time, proper choice.
Mirror by Lululemon: There was some snickering about why would Mirror money out whereas Peloton, Tonal, and different related health gadgets had been the longer term. Nobody is snickering now. Mirror constructed a formidable product after which took the $500m buyout, not having to fret about buyer retention, {hardware} provide chain, and post-COVID inflation chill.
I’d toast to all these founders however because of these outcomes they in all probability have higher champagne than I do! 🍾🍾🍾🍾🍾🍾🍾
(Once I requested some associates for his or her nominations others which got here up had been Afterpay, BentoBox, Slack +++)
