Kevin Ryan has had a long career playing pivotal roles in New York City technology. He is the founder and CEO of AlleyCorp, an investment firm that has invested in a variety of startups, and is a serial entrepreneur with early-stage involvement in companies such as Business Insider, Zola, Gilt, Pearl Health, and Transcend Therapeutics. He helped found the advertising technology company DoubleClick as president and CEO in the 1990s and early 2000s, which Google later acquired for $3.1 billion in 2007 and transformed the online advertising industry. He co-founded 10gen, an unstructured database provider that later changed its name to MongoDB and went public in 2017.
We interviewed Ryan at TechCrunch Disrupt last Tuesday to discuss the pivotal moment in the company’s transformation for the good of the company selected for this year’s Startup Battlefield 200.
As part of the Startup Battlefield 200 program, selected founders participate in pitch training workshops as well as a series of exclusive masterclasses with top-level VCs, successful founders and operations experts. The virtual program aims to prepare and excite you for what’s to come when we present exhibits, demos and presentations at Disrupt in October.
In Ryan’s session, he provided a lot of useful advice for companies at every stage, from finding a great co-founder to when and how to raise money to how a founder’s focus should change as the company grows.
But given his background at DoubleClick and MongoDB, I asked how a company founder should decide when and whether to accept an acquisition offer, and when to hold on and try to go public.
“There’s no formula, but what I think about is, number one, what does our audience look like?” he said “Let’s not be delusional. How much are we growing, what will this company look like in three years, what is our exit strategy, how many other buyers are like us, how are we doing compared to others. ?”
He added: “Most people underestimate the time factor. So if it’s worth $100 today, it will need to be worth $200 four years from now to break even due to risk, cost of capital, etc. So are you signing up as CEO (because you believe) our company will be worth $300? If you really believe it, we should hold on. But if you think it’s going to go to $150 or $170, you should probably sell today. Because you also need to consider the following: The market may close at any time. You and I could talk about many things we haven’t seen in 25 years. Ukraine War. No one saw inflation coming. No one saw much happening… And suddenly everything died.”
In general, he said, more people should sell sooner rather than trying to become the next Mark Zuckerberg, who famously turned down the opportunity to sell Facebook to Yahoo for $1 billion in 2006. (Disclosure: Yahoo owns TechCrunch.)
“I think we need more people to sell than we sell to on average,” Ryan said. “You hear stories about $20 billion companies turning down something, but there are plenty of examples of people who were able to (try to sell).”
He added that many entrepreneurs don’t think clearly about the personal wealth that comes from acquisitions, and instead of settling for life-changing amounts of money, they pursue bigger and bigger numbers. And by not settling, it often ends up as 0 instead.
“We had this conversation the other day,” he said. “Someone could sell it now and make $30 million. $30 million is truly a huge amount of money. It’s life changing, right? And they… After a year, you can go out and do a lot of things. And you know what? “$60 million doesn’t make you much happier than being 30, but 30 makes a big difference to being 0.”
He added, “It might be nice to make 60, 90, 100. In reality, it doesn’t change your life much.”
You can see the full interview here.
