Take The Money

Sep 21, 09 in Internet, Startups, Venture Capital

Big news last week in the world of Internet applications was Mint's acquisition by Intuit for $170 million. It seemed to set off quite the storm.

The 37signals blog called it the result of a "VC-induced cancer" to which Fred Wilson responded with his thoughtful post on how exit decisions are made. And it seems that the decision was made by Mint founder Aaron Patzer (which would be the case according to Fred's analysis.)

Here's the deal. There are three types of successful exits for startup founders. You get a new car, you get a new house, or you get a new life. When someone offers $170 million for your startup you get a new life, whatever type of life you want.

You take the money.

Comments

I understand Jason might think that too many startups will aim for the big exit now (and fall far short of it) but how could you fault someone for taking and exit that big? Who in their right mind would turn down that kind of investment?

Sure, Intuit might totally screw Mint up. Maybe. Or maybe they will take a few lessons to heart about how Mint was able to go from 0 to 60 in only 3 years and take on millions of new users.

If Intuit breaks Mint and trashes it, well, they're wasting their own money and they'll be punished for it. The team that created Mint can always take their new wealth and create another giant killer.

I find it inspiring to see a company like Mint achieve what they have. It's not the best route for every startup but there are going to be Grand Slams and they are fun to watch!

Andrew Watson | Sep 21, 09 at 11:41 AM

@Andrew - I think Mint will be just fine. An Intuit exec posted something about how they will not ruin Mint in anyway. They realize what they're dealing with and how many users love Mint. Mint kept walking over their turf and they realized it was best to acquire them.. also Mint employees will be working on some other Intuit properties like QuickBooks online I think? It's also a talent thing.

Paul Stamatiou | Sep 21, 09 at 01:25 PM

Jason is not saying the Mint founders did anything wrong. He is sad it happened. But what is preventing the next generation of 'acquirers' is not a 'VC-cancer', it is the inability of good companies to IPO. Partially due to Sarbanes Oxley. But also because, as Fred Wilson said "VCs have been in the penalty box for almost a decade since we committed the cardinal sin of foisting crap into the public markets." http://www.avc.com/a_vc/2009/05/the-end-of-the-ipo-drought-is-coming.html

Paul Freet | Sep 21, 09 at 01:29 PM

Exits like that do not happen very often. Founder should be congratulated. SO should the VC's who backed the company. Take. The. Money.

Knox Massey | Sep 21, 09 at 02:18 PM

@pfreet - good point about troubles getting tech startups to IPO.

I don't fault the founders for doing what they did. I'd have probably done the same. $170M is a big check.

HOWEVER, I am sad that Intuit bought it. My personal history with Intuit over the last 10 years is that they are a horrible company to deal with at every turn. They build a minimal pile of crap that they can market. I definitely don't trust them to preserve Mint's uniqueness, culture, and forward path, but I'll give them the benefit of the doubt and give them a year to see what happens.

Maybe they know they're horrible and see Mint as a way to re-ignite the fire. But I am not holding my breath.

Alan

Alan Pinstein | Sep 21, 09 at 06:57 PM

What if the life you want is to continue working on your current project? If my projects were profitable to the point of supporting me, and showed all prospect of continuing to grow, I'd think twice about accepting any buyout.

Money is nice, but I think most founders would feel a twinge of loss knowing that they were no longer in control of the thing they built.

Then again, nobody has ever put a $170M check on my table. That might change my opinion somewhat.

Micah | Sep 22, 09 at 10:50 AM

@Micah: Another way to look at it is that it likely took you a long timeline and hours upon hours of sweat equity to build that idea that you would be so passionate about.

Acquisition might be an exit from that particular idea but it enables you to get the next idea out to market very quickly.

The question becomes, are you one idea or is the value YOU? YOU move on and work on the next big idea.

Travis Vocino | Sep 23, 09 at 03:46 PM

http://www.businessinsider.com/mintcom-founder-heck-no-my-vcs-didnt-force-me-to-sell-to-intuit-2009-9

End of discussion.

Knox Massey | Sep 23, 09 at 09:12 PM

The most interesting thing about that post is the discussion about how much the founder owned. $170 million is not a $170 million check to the founder. 20 - 30% seem about right? Chop that by 40 - 50% for taxes. $170 million turns into $20 million. Still a new life.

Lance Weatherby | Sep 23, 09 at 09:28 PM