Last Saturday, NASSCOM conducted an event, Fireside Chat with Founders. Ravi Gururaj, the chief of NASSCOM Product Council and most well known personality in the startup ecosystem, played host to three founders whose companies were acquired within last 12 months. The interviewees were Phanindra Sama of Redbus, Kumar Rangarajan of Little Eye Labs, and Pratyush Prasanna of PlusTxt. As expected there was jam packed audience, mostly startup entrepreneurs, that was keen to hear more, straight from the horse’s mouth. The theme of the chat was pertaining to exit dynamics.
Summary of important statistics is presented in this table
|
Company |
Year Founded |
Revenue |
Number of Employees |
Funding |
Got Acquired in year |
Acquired by |
|
redBus |
2006 |
Rs. 600 Cr. |
700 |
$7M |
June 2013 |
Naspers |
|
Little Eye Labs |
2012 |
Rs. 10 L |
8 |
$250K |
Jan 2014 |
|
|
PlusTxt |
2012 |
NIL |
4 |
$400K |
July 2013 |
One97 |
Ravi quizzed all the founders about the vital statistics of the deal. None of the founders revealed the numbers, perhaps to the disappointment of the audience. But as they say, in success stories, numbers are meaningless.
Here are some interesting snippets from each of the founder –
Phani: Normally, the seed investors look for an exit in seven years. It is important to capitalize on the timing, because when you are actually looking out for investors, the valuation may be lower than what is perhaps would have been.
Kumar: Your potential acquirer could be your present customer. There is a trick in approaching them and pass down the message in subtle way. It is also important to be discrete about maintaining secrecy or being transparent. Finally, the post acquisition terms and conditions are something you will have to put up for a long time. And most important thing to remember is that the payouts happen over a period of time, not in one shot.
Pratyush: The typical practice in the corporate world is to track success by milestones. With acquisition, come some tradeoffs. When you run your own organization you may not need approvals to make payments, however post acquisition you may lose such liberty.
Ravi, throughout the interview kept asking questions which kept up with the inquisitive expectations of the audience. Like always, he played a great host. The video has been recorded by Ravi Raj, Founder & CEO MastCoffee. You can watch it here –
Last but not the least, we would like to mention a message from NASSCOM team that the Startup Warehouse would be available for entrepreneur events on weekends, and interested people may contact the team to know more.
About the Author
Vijaykant Nadadur is the Founder & CEO of Tationem , a startup focusing on training, consulting and research in the areas such as Algorithms, Machine Learning, Data Mining and Statistical Modeling. He obtained his Masters Degree from the University of Kentucky, where he also worked for brief time before moving back to India for good. Besides running his startup along with his partners Aravind & Senthil, carrying out research and serving as an Advisory Editor of Computer Science on a Journal Publication house, he enjoys writing on several topics in his spare time.
