As the first poster said, don't believe everything you read. The media is all about hype and thousandaires don't roll off the page.
The details: the acquisition price was $5 Million which was made up of $2 Million Cash and $3 Million Stock.
There were 3 founders, Harjeet Taggar, Kulveer Taggar, Patrick Collison. Each founder held 20.89% of the company at the time of sale. YCombinator held 4.38%. Paul Graham personally held 0.96%.
20.89% of $5 Million is $1,044,500. Of course they only have 40% of that in cash and the other 60% is in stock. The stock was $2.69 the day the deal closed. It's now trading at $2.40. If they still have their shares, they are worth 10% less which is a loss of $62,670.
That is all before tax. Factor in capital gains tax of 10-15% before the stock drop and you are already out of millionaire territory.
On an unrelated note, each of the founders are now making a base salary $100,000 at Communicate.com. This does not include bonuses, options, etc.
$1,044,500 * 40% = $417,800
March 25, 2008- LIVC 2.69
$1,044,500 * 60% = $626,700
$626,700 / 2.69 = 232,974 Shares
January 23, 2009 - LIVC 0.41
232,974 * 0.41 = $95,519
"to dot-com millions in Silicon Valley - all in just over a year" - article
I hope he sold his shares in March, cause your stock is down 83% and that means he made barely over $500k, before tax!
(I recall reading Kulveer saying this in own words in his blog, www.kulveer.co.uk, along with the advice PG gave them to keep going and not sell yet, but his blog seems to be down or has a problem so unfortunate I cannot add the source as a reference).
But $500K in a year is still good.
So I don't see there being any useful advice here, apart from maybe "Get to know lots of people, one of which might buy your co. regardless of its merit".
Also the whole saga reminds me of the sad days toward the end of the dotcom bubble, when teenagers were making 'startups', without product, and planning on an exit as soon as possible.
As for live current, just because you own cricket.com, doesn't mean you have any traffic going to it. Premium domain names are just ego trips...
do you have any data to support that assertion?
You know what's also quite telling, for example here http://blog.harjtaggar.com/?p=43
You don't even mention the product or your users. It's as if they are an afterthought. Seems to all be about the networking shmoozing etc
And then in the acquisition there's spin to suggest that auctomatic is somehow relevant to affiliate marketing or something... it's simply bizarre.
(Don't mean this as an attack, it just seemed to me a completely surreal situation).
1) How were you able to convince Evan Williams to be an adviser initially?
2) Why was it that you were able to raise 180,000 pounds (about US$240k) but it was a YC seed round that got you to come to Silicon Valley?
3) What were your strategies in wooing the likes of Paul Buchheit and Chris Sacca?
Chris Sacca writes it in his own words why...
Basicially, to me, it reads because they were passionate about what they were doing (passion), would not let anything stop them (ambition), were able to hack/get things done quickly and efficiently and had some great previous accomplishments (talent, focus, customer care), and were smart.
So, if you possess these qualities, and have a likable-personality, then chances you could woo the Bucheits and Saccas et al of the world (if that is what you desire). Why not?
Otherwise, just get on with building your things, and if it is really something people want, then A) you will get attention this way and B) hopefully make enough cash too to not care about wooing others (maybe I am wrong, but to me it seems people woo only when they want cash/advice/similar rather then pursue friendships because you like each other etc.) :)
I wonder how many startups succeed even if they're attached to a sinking parent company.
I'm not saying it's bad, but it's just not too helpful to those who did not start off with such good cards.
And in a sense, it's more inspiring, since he's giving up a six-figure job to start something new, while most of us would be giving up significantly less.
Someone with good job prospects--be it through education or pedigree-- giving up a high paying job to be an entrepreneur isn't relinquishing their management of risk. They can always get another high paying job.
A kid that has nothing to begin with and turned it into something. That is inspiring. That is why rags to riches is a literary device.
I suspect, but cannot prove, that people who start startups are those who could succeed in other fields, but turn down the steady paycheck for the chance to do their own thing. There certainly are people who started a company because Microsoft wouldn't hire them, but there are plenty more who were hired by Microsoft and realized that they could capture more of the benefits of what they were doing if they set out on their own. Rags-to-riches is a literary device because big-paycheck to big-IPO-payday is not quite so compelling -- and because there's a bigger audience of people who want to believe, and want to be told to believe, that they can succeed despite prior failures.
They can always get another high paying job.
But they can't get back the time they lost, and when that time is worth six figures with a high growth rate, that's a huge cost. In one of his essays, Paul Graham made the point that starting a startup is just barely more expensive than being unemployed -- the flip side of which is that it's not such a huge risk to start one, if you're unemployed. If you do have a job, it's more of a sacrifice.
Many of them earn a LOT more than that after a couple of years, even now, even with bonuses having been cut back due to the current financial crisis.