Kevin Ryan has had a long and storied career as a key force in New York City technology. He is the founder and CEO of investment firm AlleyCorp, which has invested in a wide variety of startups, and is a serial founder, involved in the early stages of companies such as Business Insider, Zola, Gilt, Pearl Health, and Transcend. Therapeutics. He helped build ad technology company DoubleClick as chairman and CEO in the 1990s and early 2000s, and Google later bought it for $3.1 billion in 2007, transforming the online advertising industry. He then co-founded unstructured database provider 10gen, which later changed its name to MongoDB and went public in 2017.
Last Tuesday, I interviewed Ryan to discuss pivotal moments in the company’s transformation to benefit the companies chosen for this year’s Startup Battlefield 200 at britcommerce Disrupt.
As part of the Startup Battlefield 200 program, selected founders participate in training workshops as well as a series of exclusive masterclasses with top-tier venture capitalists, successful founders, and operational experts. The virtual program aims to prepare and excite them for what is to come when they exhibit, demonstrate and present at Disrupt in October.
During Ryan’s session, he offered many useful tips for companies at all stages, from finding a great co-founder to when and how to seek funding and how a founder’s approach should change as the company grows.
But given his experience with DoubleClick and MongoDB, I asked him how company founders should decide when and whether to accept an acquisition offer, versus when they should wait and try to go public.
“There’s no formula, but what I’m thinking is, first of all, what are our prospects like?” said. “Let’s not fool ourselves: how much we are growing, what this company will be like in three years, what the exit strategies are, how many other people (other buyers) there are, how we are doing in relation to others. ?”
He added: “Most people underestimate the time factor, so if we are worth $100 today, four years from now it will have to be worth $200 just to break even because of risk, cost of capital and things like that. So, do you sign up as CEO? [because you believe] What are we going to be worth $300? If you really believe that then we should hold on. But if you think it’s going to be $150 or $170, we should probably sell today because you also have to keep in mind: the markets can close at any time. You and I for over 25 years could name many things we didn’t see coming. The Ukrainian War. Nobody saw inflation coming. Nobody saw a lot of things coming… and suddenly everything is dead.”
Overall, he said, more people should sell sooner, rather than wait to try to become the next Mark Zuckerberg, who turned down the opportunity to sell Facebook to Yahoo for $1 billion in 2006. (Disclosure: Yahoo owns britcommerce. )
“I think more people should sell than probably sell on average,” Ryan told me. “You’re definitely going to read the story of the $20 billion company that turned something down, but there are plenty of other examples of people who could have turned it down.” [sold].”
He added that many founders don’t think clearly when it comes to personal wealth derived from an acquisition, chasing bigger and bigger numbers rather than settling for a life-changing amount of money. And by not settling, they often end up with zero.
“I had this conversation the other day,” he said. “Someone could sell now and make $30 million. $30 million is an incredible amount of money. It’s life changing, right? And they can… a year later go out and do so many things. And you know what? “60 million dollars doesn’t make you much happier than 30, true, but 30 makes a big difference compared to zero.”
He added: “It sounds great to get to 60, 90, 100. It doesn’t really change your life much.”
You can see the full interview here.
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