I read an interesting article about the YouTube deal and an interview with the founders, Chad Hurley and Steve Chen. Each is standing to make hundreds of millions of dollars from the sale. The exact amount is not known; they took a total of $11.5 million from venture firm Sequoia Capital, but the exact ownership breakdown is not disclosed. All the same, with a $1.65 billion buyout it seems safe to assume that the two founders will walk away with something in the "hundreds of millions".
This is all, by the way, for a website that was officially launched in November, 2005.
All in all, not a bad payday for about a year's worth of work. But what really drives me crazy is this quote from Hurley when asked how it feels to have hit the financial jackpot: "I haven't really thought about it."
Sure. Of course you haven't.
Just once I'd like to read one of these newly minted dot-com-hundred-millionaires say "It feels great! I worked really hard to get here, my exit strategy all along was to sell the business at some point, a great offer came along, and I jumped at it. I'm really happy I was able to sell the business for so much. Having all this money is definitely going to be fun!"
If you really "haven't thought about the money" and you just want to "continue to deliver value" to your customers and you "don't anticipate any major changes" then DON'T SELL THE BUSINESS!
And there is nothing wrong with that. If you have a business that is making money and that you love doing, there's no need at all to sell it. Run that business for the rest of your life, then pass it on to your kids.
But if you are planning to sell your business one day then you need to think about it from all perspectives, including how it will impact your customers, employees, investors and, last but not least, how will it impact you financially. It's a big decision, so you'd better think about it!
And if you happen to get lucky and walk away with hundreds of millions of dollars, then do us a favor and drop the bland, politically correct answers. Let us know that you hit the jackpot, and it feels great!
Great comments!
I am currently looking to sell my business which is solid, growing, and an incredible opportunity for someone with a passion for it. It provides a great living in a great town. Anyone looking into my situation would tell me I am crazy but the reality is that I have no passion for my services. I purchased as a security blanket but after several years I just cannot see doing it for much longer. I believe that for some, doing what you love and have a passion for is the most important thing. I am an entrepenuer and will always be however my products and services just plain bore me.
Posted by: Hauncheezer | January 15, 2007 at 07:10 AM
Richard - good point - I always talk to new buyers about their exit strategy - encouraging them to build their newly purchased or soon to be purchased website business to levels 3-10 times what they are paying currently and exit with a nice windfall - and then do it all over again but with a nice nest egg. I can't imagine a 20 something not contemplating the freedom and the toys that a few hundred mil will afford - and what is a 20 something multimillionaire worried about being politically correct - at this point who cares what someone elses opinion is!!!
david
Posted by: Internet Business Broker | May 14, 2008 at 12:10 PM