“Bought too early” is traditionally a derisive time period thrown at founders who exited startups nonetheless on an upward trajectory, and it’s true that just about each profitable firm went by 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 hold constructing, I’ve additionally come to understand that understanding when to get out issues as a lot. And so wanting backwards over the previous couple of years of ZIRP Increase, we are able to now honor these of us who bought the bag for his or her firms by taking the best supply 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 forth. That is about truly attention-grabbing firms that most likely needed to make arduous choices about elevating extra capital or promoting. Though I wasn’t concerned within the conditions I’m naming beneath (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 firms had confirmed greater than the youthful ones did). I’m additionally certain there’s a bunch that I’m forgetting – be happy to disagree or broaden the checklist 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 certain the corporate may have stayed unbiased and continued constructing however they exited throughout a interval the place multiples have been excessive, antitrust wasn’t a problem, 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 an increasing number of negotiated service provider/CPG offers, construct out the ad community points, and all the time face some privateness/client knowledge 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 resolution.
Mirror by Lululemon: There was some snickering about why would Mirror money out whereas Peloton, Tonal, and different linked health units have been the longer term. Nobody is snickering now. Mirror constructed a powerful 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 most likely have higher champagne than I do! 🍾🍾🍾🍾🍾🍾🍾
(Once I requested some associates for his or her nominations others which got here up have been Afterpay, BentoBox, Slack +++)
