Startups who rejected from 100 of millions to Billions in buyout offers? Becoming a Billionaire is a lifetime dream for majority of us and that is exactly what it will stay as, but the founders of these companies Snapchat, Yelp, Paypal passed on becoming extremely rich like it was nothing.
Price war between Facebook and other tech giants takes 3 year old tiny startup.
Snapchat offer to 3,000 million but No sale is the answer. Are Snapchat founders wrong , a signature for mobile messages , rejecting the 3 Billion offer from Facebook? Are they holding out for a bigger offer or it’s a courage to pursue their dreams? Snapchat , created in 2011 by Evan Spiegel , 23 , and Bobby Murphy, 25 , had to make a decision, sell or remain independent – is one of the decisions that all technology entrepreneurs would love to make.
Successes attract attention. But Silicon Valley is littered with stories of companies that rejected offers and others that were sold too soon.” The decision to sell or hold is never clear ,” said Ben Horowitz, the venture capital firm Andreessen Horowitz, one of the first to invest in Instagram, Kevin Systrom co-founded by and sold to Facebook for a Billion a year ago . “When Kevin sold Instagram , people said I was a genius. Now he wonders if he did it too soon, and believes that Snapchat is too bold. Who is right ? No one’s knows yet . “
The decision to Snapchat evokes the situation that crossed other founders of technology companies. Some recall what they thought at the time that they were offered money and it was unpredictable future .
Max Levchin and PayPal
eBay called many times and asked the founders of PayPal to sell. ” They said, ‘ You have to sell to us because it is the natural synergy, if you do not, you end up with internal competition,” recalls Max Levchin , one of the founders of PayPal. Levchin asked his employees? Are you still willing to fight?”.
In 2002, after PayPal went public” and the fight with eBay become very, very unpleasant,” sold for $ 1.5 Billlion. “I have to admit that eBay has been a fantastic manager for what we have build,” he said.
His next venture, Slide, was a different story. Social applications made and sold to Google for $ 228 million, which Google closed a year later. “We were a company of five years old who had wandered in the wilderness for a long time wondering what business should we be in,” says Levchin , who later created a new software company, HVF .
Philippe Courtot and cc : Mail
In 1990 , Philippe Courtot received a call from Microsoft. He accepted to meet with Bill Gates? Two years earlier, Courtot had started a business with $2,000 and 12 engineers , designing a new product emails called cc : Mail. Gates offered 12 million dollars for it . “I told him the price was inadequate, but it was not just the price, we were about to build the dominant platform for emails ,” recalls Courtot .
Gates didn’t take the refusal lightly . ” He said, ‘ If I do not sell the business, you really will be a formidable competitor.” The advantage was that cc : Mail worked with multiple operating systems, while Microsoft Mail just did with Windows. The following year, cc : Mail to Microsoft Mail dominated Gates until Courtot received an offer from Lotus Development for $ 55 million in cash. With Lotus, cc : Mail went from four million to 24 million users, until IBM acquired Lotus in 1995 and closed cc : Mail
Jeremy Stoppelman and Yelp
The first time the local reviews site Yelp turned down buyout offer, an investor warned Jeremy Stoppelman, one of the founders of the company and its CEO, that now ” you would have to build a real business .” “I did not understand the nuances of what that meant,” says Stoppelman” . He was 28, and Yelp, almost two, but did not generate profits. The company that made the offer , which he refuses to name , offered $ 100 million. “Without doubt, influences hubris ” he says.
Three years later , Google offered 500 million. The union seemed promising, but the negotiations failed. “The process just assuming a kind of brain damage to those involved,” he says, largely because they begin to dream of paying mortgages.” But everyone had to take their mind off those fantasies and return to work , including me.” “When we chose the path of being independent, I said, ‘ Now I’m going to have to be a CEO of truth.” Yelp went public in March 2012. The share price has tripled since then, which makes it worth almost around 5 Billions.
Ben Horowitz and Opsware
Horowitz in 2007 had mixed feelings about the sale of Opsware, signing programs for companies that he helped found. ” There is a logic part and an emotional part, and are very difficult to separate,” he explains. The logic continued to sell the company is still valid, he says. The market for data center automation was changing and the economy had begun to worsen. In addition , Hewlett -Packard offered $ 1,600 million. However, even today, his feelings about the sale are turbulent. “I spent eight years, day after day, trying to build this and suddenly is gone, it is over,” says Horowitz, who now advises entrepreneurs and venture capitalist in Andreessen Horowitz. “It’s like something died … “.
Oren Etzioni and Farecast Netbot
Oren Etzioni who was stung by the technology bug while working as a professor of computer science at the University of Washington. He is what you call a serial entrepreneur who started and sold four companies latest of which by eBay and Microsoft. Netbot a comparison shopping service that was sold to Excite in 1997 for $ 35 million, was more a technology than a business, explains , and cried out to buy it to a larger company. Also notes Etzioni , Farecast sold to Microsoft in 2008 for $ 115 million largely because he wanted to create a service, which helps travelers to choose when to purchase tickets. Farecast became the basis of Microsoft Bing Travel Service. He claims he has avoided selling to companies that insisted that employees leave the area of Seattle. He explains getting the highest price was never his priority. “I do not want to look like I’m giving lessons in morality,” says Etzioni, who now heads the Allen Institute for Artificial Intelligence, a research nonprofit.