[Scrap]So You Sold Your Company For Millions, What Next?
What would you do next if you sold your company to an Internet giant for millions of dollars? Existing examples show 4 different types of Internet millionaires:
- Serial entrepreneurs – keep doing the same
- Dreamers – expand their horizons
- Midas – invest and help multiple entrepreneurs grow new businesses
- Consistents – stick with their jobs
Now let’s look into each of these types and illustrate them with some famous examples.
Serial entrepreneurs know how to raise money, pick the best people and execute their company towards an acquisition or an IPO. Their fellow investors love them and are ready to give their money to this type of successful entrepreneur, because they are sure that he or she will make it happen again. Note that most serial entrepreneurs are also investors in parallel.
Niklas Zennstrom and Janus Friis
Kazaa, Skype and now Joost. These North European stars haven’t stopped disrupting decades-old businesses and changing the way we use our computers, using P2P. Their latest venture, Internet TV service Joost, raised $45 M from high profile VC firms like Sequoia Capital.
He was the founder of Netscape and now he’s on the web 2.0 bandwagon with Ning – a network of social networks. Also, keep an eye on his great new blog http://blog.pmarca.com
Excite anyone? JotSpot was the second venture of Joe Kraus, and it eventually got acquired by Google for an undisclosed amount of money; Joe is now a Googler, but I suspect that a new idea may flame his passion for founding another startup.
His first success ONEList became a part of Yahoo in 1999, but that was not enough for him – he then founded Bloglines, which eventually got acquired by Ask.
He was a member of the board of directors at Paypal, but he is now preparing for possibly the biggest IPO of the web 2.0 era (unless Facebook does one too) with his professional networking venture, LinkedIn.
Founder of the shopping comparison engine Kelkoo, which became the biggest hit of Europe after Yahoo bought it, he is now heading Wikio – a mix of Digg and search, focused on Europe.
Dreamers know this business very well, but they choose to pursue bigger dreams and take bigger risks. They usually go out of the web business and run after more scientific projects. As for funding, they are not as lucky as their serial entrepreneur peers – they usually need government grants, since the chances of getting a return is relatively much lower.
From the web to space. Elon Musk’s new ambition is to conquer space with his company SpaceX, which recently accomplished a successful rocket launch to space.
Co-founder of eGroups, he is now in the green energy business with his solar power company NanoSolar.
Started with broadcast.com (acquired by Yahoo for billions) and now heading the NBA team Dallas Mavericks. Well this is not scientific, but definitely a big dream!
The elder brother of Google co-founder Larry Page, Carl not only helped his brother to build Google – he was also one of the co-founders of eGroups, which was acquired by Yahoo. And now he’s the CTO of HandHeld Entertainment, a mobile entertainment gadgets company.
He stated a company called AnyBots, focusing on humanoid robots in his peaceful office in Mountain View. He was a co-founder of Viaweb, which was sold to Yahoo.
His new target is Bill Gates and Microsoft. South African Mark Shuttleworth, ex-founder of SSL certificate company Thawte (now Verisign) is currently leading Ubuntu – which recently succeeded in becoming the 1st Linux distribution to be bundled with Dell computers.
Similar to Mark Shuttleworth, Michael Robertson is also in the operating systems business. The founder of of mp3.com (which was acquired by French Vivendi Universal), he is now leading a controversial Linux company, Linspire.
The founder of Hotmail (acquired by Microsoft for $400 M) is now trying to rebuild Silicon Valley in India – with the name Nano City.
This list is perhaps the most crowded one; because almost every venture capital company contains one or more successful entrepreneurs in the team. However we will limit ourselves with just a few examples. These Midas list members, instead of focusing on a single company and idea, share their experience and money with new entrepreneurs – getting equity in return.
Along with Ken Howery and Luke Nosek, the founders of Paypal are now leading the Founders’ Fund VC firm, which invested in Facebook, Geni, Powerset and Slide.
Paul Graham is helping young entrepreneurs with his funding program Y Combinator. His successful investments include iminlikewithyou, reddit, Scribd and Justin.TV
Founded half.com and sold it to eBay. Now he’s heading First Round Capital – a seed stage investment company with a rich portfolio including Wikia, OpenAds, Powerset and Riya.
This Turkish-Armenian entrepreneur sold her company CyberCash (a pioneer in eCommerce) to Verisign. Now she’s an angel investor and partner with US Venture Partners (USVP).
Consistents are usually those who succeeded in taking their companies to IPO. For example, Jeff Bezos was the founder of Amazon.com and to this day continues to head his company. Similarly Pierre Omidyar is founder and still chairman of eBay. But the interesting point is they both reinforce their technology passions by investing in younger companies too. For example Jeff Bezos’ investment in 37Signals and Omidyar Networks’ investment in SocialText.
It’s very rare that an acquired company’s founder remains committed to their new company. Scott Shambarger, who was with eGroups, is still with Yahoo. Sometimes, as in the case of MySpace, the founders of the acquired company may demand aggressive compensation just to stay with their new company.
None of these entrepreneurs are solely motivated by money. After all, there are safer but still very profitable ways of making more money. I think their continued investments and entrepreneurship can only be explained by the pursuit of new technology and creating things.
Al of these people do what they think they are good at and keep bringing value to our society. That is perhaps the primary condition of being successful at your business; if your motivation is spending your time at the Caribbean, then you may be on the wrong path. It seems that what kept the above entrepreneurs coming back for more, is their passion of technology.
Few years before, I might choose the ‘dreamer’.
But with my recent experience – startup my own business – teach me that it should be strictly depended on business circumstances.
Don’t choose this kind of job “if your motivation is spending your time at the Caribbean.”
It really is.