
14-year-old startup founder turned down a $30M buyout offer - prostoalex
http://money.cnn.com/2016/05/10/technology/recmed-taylor-rosenthal-techcrunch-disrupt/index.html
======
aresant
"14 year old CLAIMS to have rejected $30m offer for startup that has yet to
launch. But can't share details because of an NDA." is the actual story.

And a follow on story a few weeks later is that he would "accept $50m" and
wants to buy a "Bentley with a chauffeur".

Keep hustling kid.

(1) [http://www.cnbc.com/2016/05/11/the-14-year-old-who-turned-
do...](http://www.cnbc.com/2016/05/11/the-14-year-old-who-turned-down-30m-now-
wants-50m-for-his-start-up.html)

~~~
dvcc
If that is true, I believe that falls under fraud when a company is publicly
traded. No idea when privately owned!

~~~
spiderfarmer
I believe that falls somewhere between 'clever marketing' and 'exploiting
gullible journalists who publish anything related to teenagers and
entrepeneurship'.

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tw04
I hope his parents are already loaded, otherwise they have done a VERY poor
job of guiding him down the appropriate path. At $30 million you can live a
VERY comfortable life unless you're a complete idiot with it.

I get "chasing your dream" \- but I struggle to believe an idea he came up
with for a school science fair at the age of 14 was any kind of lifelong
dream.

~~~
retro64
He may not have had a concept of what $30 million really is. I know I don’t,
even at my age.

If he has his needs met, what does it mean to him to have his needs met more?
I know logically this can be worked out that lots of money buys lots of
comfort, but thinking back at that age, I personally didn’t know squat about
the value of a dollar. I grew up with less money than most of my peers (not
“food insecure poor”, but “all I got for Christmas was cloths and 1 small toy
poor”) but never thought about it. I just thought my parents were careful
spenders.

However, to your point; where were the adults in the equation?

~~~
tw04
>He may not have had a concept of what $30 million really is. I know I don’t,
even at my age.

I would be shocked if he had any concept at all. Most adults have no concept
of what it means to have that kind of money which is why most lottery winners
are broke within 5 years of winning the lottery. You literally can live an
upper middle-class/lower upper-class lifestyle without working another day in
your life off that interest alone.

~~~
mikestew
Point taken, and I'm not trying to pick apart your post with pedantry, just
curious how the numbers come out. 2% gives you 600K/year. If you go with the
retirement fund concept of spending "only" 4%/year, that's 1.2M/year. I don't
know how you're defining "upper middle-class", but I'll bet most would define
it much lower than that.

Finally, a money market fund at 0.5% has an annual yield pretty close to what
I make working 40 hours/week. And in my opinion, we live pretty well on what I
make in an expensive city like Seattle.

All that, of course, assumes that one does not lapse into lottery winner
syndrome because one _doesn 't_ have a concept of how much money $30 million
is, therefore views it as a bottomless pit of cash, and blows it all on velvet
Elvis paintings, bad business ideas from your cousin, and "helping" out your
meth-head sister.

All of _that_ assuming assumes the $30 million dollar offer is real. And I'm
convinced a vending machine idea is worth a couple of orders of magnitude less
than what is claimed.

------
AlexB138
That is an extremely easily replicated technology. Turning down a buyout was a
horrible idea, but good for him for making it that far.

~~~
bognition
Apparently he has a patent, although its not clear what he has actually
patented. If the patent is sufficiently effective to keep other players out of
the market that would explain the high price tag.

~~~
notlisted
On Quora a vending machine operator commented: "It’s a design, not a utility,
patent which have less stringent requirements for granting.

His idea is not new, things like aspirin and bandaids have been sold through
vending machines for decades. What is unique about his system is that its
dedicated to first aid and medical supplies and its interface with the
customer is exclusively via a touchscreen. You can’t see the product through a
window." [1]

Maybe there's something unique to the interface, though I see nothing in this
little video interview that strikes me as earth-shattering [2].

It is also entirely likely that this is another case of 'child genius myth-
makery' like we've seen so many times before. Remember the 72MM high school
kid trading hoax? [3]

[1] [https://www.quora.com/How-did-Taylor-Rosenthal-get-a-
patent-...](https://www.quora.com/How-did-Taylor-Rosenthal-get-a-patent-for-
his-vending-machine-which-dispenses-first-aid-kits/answer/Chris-Bracher)

[2]
[https://www.youtube.com/watch?v=lmxkUxEr81w](https://www.youtube.com/watch?v=lmxkUxEr81w)

[3] [http://observer.com/2014/12/exclusive-new-york-mags-boy-
geni...](http://observer.com/2014/12/exclusive-new-york-mags-boy-genius-
investor-made-it-all-up/)

~~~
FireBeyond
As it is, such products already exist, in physical form:

[https://www.amazon.com/gp/product/B003JQL2HM](https://www.amazon.com/gp/product/B003JQL2HM)

is a first aid kit that has pre-packaged pouches for "bleeding", "spine",
"burns", "bites and stings" such that the individual pouch can be replaced
upon use.

------
Symbiote
He has a patent, yet a brief Google search shows plenty of companies offering
similar machines.

Here's a record of a machine in Germany in 2007:
[http://www.toytowngermany.com/forum/topic/59813-first-aid-
ve...](http://www.toytowngermany.com/forum/topic/59813-first-aid-vending-
machines/)

~~~
GFischer
Having a patent is very easy in the U.S.

Getting one that can have its claims stand in court is the hard part - of
course, you can play chicken with would-be claimants, and it's usually cheaper
to just pay and avoid expensive lawsuits. Even here in Uruguay, lawyers are
advised to always settle instead of going all the way.

------
FrozenVoid
Vending machines in Japan already sell much more, variety of goods seems only
culturally limited in the west. With recent push to automation you'll expect
more of this: [http://kotaku.com/5988536/the-wild-and-wonderful-world-of-
ja...](http://kotaku.com/5988536/the-wild-and-wonderful-world-of-japanese-
vending-machines) [http://www.hongkiat.com/blog/bizarre-vending-
machines/](http://www.hongkiat.com/blog/bizarre-vending-machines/)
[https://www.dramafever.com/news/25-things-youll-only-find-
in...](https://www.dramafever.com/news/25-things-youll-only-find-in-vending-
machines-in-japan/)

------
dvcc
I'm a little more disappointed that someone didn't provide him a bit more
guidance on this. I, like many here, find the rejection crazy. But you can't
go and blame a 14 year-old for it, it's the adults surrounding him.

His parents are really to blame for that rejection. Hell he must have a patent
attorney, who at some point mentioned this would probably be easily
challenged. This has a ton of risk with what upside?

------
johnward
I'd have a very hard time turning down anything over $10m at any age. Even if
I thought my product might be worth billions.

~~~
mulletbum
Even if you don't think specifically about how much money it is, you basically
could fund any idea you ever want to do for the rest of your life. Instead you
get to have one idea that your stuck with whether or not it makes 100k even.

~~~
joshmanders
> Instead you get to have one idea that your stuck with whether or not it
> makes 100k even.

Six Flags ordered 100 machines putting him at 550,000 revenue for a single
customer. As more momentum picks up and they pull in more customers, he'll be
well over 30m revenue in a few years time. Smart move from this kid. Bill
Gates didn't get his wealth by selling out at the first offer, regardless of
his age.

~~~
mulletbum
"As more momentum picks up"

This is the crux of what is being discussed, as with the risks involved in
that.

------
seibelj
> _Rosenthal sketched a design and consulted with his parents, both of whom
> work in the medical industry._

> _By December, he had a working prototype and had acquired a patent._

Parents did all of the work, and are using their kid for marketing purposes.
Look at all this free press! Buyout offer doesn't exist. Pretty good marketing
plan but I think the business idea is stupid.

------
danso
I'd normally roll my eyes at this if this were a teen in the Valley, but a
14-year-old from small-town Alabama? That's pretty gutsy, good for him.

~~~
witty_username
This is stereotyping.

~~~
danso
How so

~~~
witty_username
You're generalizing a group of individuals. Not everybody in Alabama is
backward (whatever the negative stereotype is, I'm not American). Which state
a person is from is a weak estimator of their socioeconomic status.

~~~
danso
Where in my statement did I say that Alabama is backward? If you're not from
America, perhaps you're not familiar with the geographical and geopolitical
distance Alabama has from the entrepreneurial strongholds of Silicon Valley
and New York. I'm from a small town in the Midwest myself and can attest to
how far removed you can be from what happens on the costal big cities.

~~~
caminante
don't feed the troll!

------
breitling
Anybody know if this buyout offer has been verified? Who made the offer? Are
we sure this is not just a PR stunt?

------
pbiggar
> Rosenthal is the youngest CEO at Round House, where he has an office and
> access to mentors in exchange for a 20% stake and a $50,000 investment.

Exploitative local incubator strikes again.

~~~
jacquesm
Looks like he took the deal at 250K.

------
samfisher83
Who made the 30 million dollar offer?

~~~
xapata
Sounds fishy.

------
thesimon
20% for $50,000 (aka seed), but shortly after with no improvements buyout for
$30M? Sounds more like a marketing stunt.

------
rojabuck
The idea of charging someone for a plaster when they need it feels totally
alien to me.

~~~
tjic
If all people felt that way no one would run drugstores, and there'd be ZERO
plasters / bandaids available on the market.

"It is not from the benevolence of the butcher, the brewer, or the baker that
we expect our dinner, but from their regard to their own interest." \--Adam
Smith

...and thank goodness for that!

------
FfejL
A 14 year old can't sign a contract, so how does he own a business? I don't
doubt he's done all the work, and I've nothing but admiration for him, but
there's no way this is the complete picture.

------
brudgers
Press coverage of the offer:

Miss America inteview: [http://www.oanow.com/news/opelika/opelika-s-mallory-
hagan-in...](http://www.oanow.com/news/opelika/opelika-s-mallory-hagan-
interviews-recmed-ceo-for-
blog/article_fb618456-93b6-11e5-bdff-a7973d61bd9b.html)

August 2015: [http://www.wltz.com/story/29846919/13-year-old-opelika-
entre...](http://www.wltz.com/story/29846919/13-year-old-opelika-entrepreneur-
aiming-for-over-9-figures-for-start-up-business)

------
zeveb
> The 14-year-old is exhibiting his startup idea -- a vending machine that
> dispenses first aid products -- at TechCrunch Disrupt this week in Brooklyn.

How long before we see articles decrying him for being a profiteer?

(N.b.: I think that this is actually a great idea, but I also think it's
difficult to underestimate the economic illiteracy of the general populace and
journalists in particular.)

------
fideloper
We don't have enough information to really say if the $30mm buyout was a good
offer. Maybe there were some ridiculous strings attached to it. It could be a
very good decision his parents helped him on.

------
esseti
The question is: how a 14 yo kids have the knowledge and capability to build
such a company?

PS:looking at their website it seems to be a school project rather than
something more.

~~~
pcunite
Both of his parents are in the medical profession. I think that if you have a
child with the right temperament you can coach them into something like this.
I've been asking my daughter (who would make someone a good COO) about her
thoughts in business.

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kirykl
The $30MM if real is probably just skewed for marketing.

It might just be a royalty deal on the patent, and the dollar figure is based
on potential over the patent's lifetime

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homero
First aid vending machine? Should've taken it kid

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rdlecler1
We also didn't see the terms of the offer which could have had significant
clawback provisions and performance expectations.

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ChemicalWarfare
If that is indeed true then both the fact that someone offered 30M for this
and was turned down is mind boggling :)

------
JoeAltmaier
A vending machine? I don't understand how its new at all.

