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My Pressgram Investment


We had agreed on a ten million dollar purchase price.

I had set a goal of selling a company by the time I was thirty and we were weeks away from seeing that happen. I’d been a part of selling the last startup I’d been a part of, but not an owner. This time I’d be an owner.

I can’t tell you all of what I thought would happen when I sold a company before I was thirty. Maybe I hoped for a parade. But I had purposely chosen to live outside of the tech world, out in the East Bay of the San Francisco Bay Area, so that my neighbors talked about real life – not just another startup idea. So it wasn’t clear who’d be throwing the parade.

Hardships & Haircuts

And then suddenly we had an issue.

A reseller agreement that we had with Verizon (a huge company that you may have heard of) was suddenly a potential liability issue. When  you’re negotiating the purchase of your company, a liability issue is many things but the one you think about most is the reality that it gives the other party a device for changing the valuation of the deal.

They call it a haircut but it can feel more like a beheading.

The talk was that this liability might cut the purchase price in half. That’d barely be enough to give our investors a nice return and us owners a nice dinner.

So there we were, with a set of days to do just about anything we could to get Verizon to write us a letter that would release us from the contract, so we could sell our startup.

After all, this was 2000 and the internet bubble had burst. Our term sheet had been pulled (after getting one, which at the time was unheard, at least to me). It wasn’t like we were going to find another buyer.

So we hustled. We talked to everyone we knew.

In the end, we sent someone to spend as much time with a Verizon secretary (they have the real power anyway, right?) as they could, to see if we could get that letter.

Fundraising & Flashbacks

That was the part of my story, the selling of ICE Wireless, that came to mind when I found out that the Pressgram Kickstarter campaign had suddenly lost a major investor.


pledgeCancellation

I didn’t begrudge Matt’s decision. He lived out his values.


But his pledge cancellation dropped the funding on the project right as it had reached 96% of completion. It was how I’d felt when we were just days away from selling our startup. Suddenly things looked tougher, rougher, and we had to hustle.

So I upped my pledge and became a significant investor in the project. I did it for three reasons:

1. I love entrepreneurs and wanted to invest in John.

2. I didn’t want Instagram to own my images; I wanted to own them.

3. I remembered the scrambling at the last minute when selling ICE.

The day I wrote my article about Pressgram, inviting others to join me and offering some additional incentives, we rallied about 50% of the withdrawn funding. And in the end, it reached its goals.

Testing & Triumphs

This weekend I finally got a chance to really put the alpha thru testing. I installed Pressgram on my iPhone and started taking pictures. The first photo I took was of my Montblanc watch. Soon after, I took a photo of my Montblanc pens.


watch

The symbolism won’t make sense until you hear the rest of my ICE story. I wasn’t taking photos of nice things just because.

A DoneDone Deal

After camping out (read: sitting in the office) with some Verizon staff for a few weeks, we got the letter we wanted/needed. We were able to get the deal #donedone. But there were some additional last minute challenges.

See, the point wasn’t just to successfully sell the company. We wanted every single employee to have a spot with the company buying us. We had ten employees and they were willing to do the deal, but the offers for a few of the folks were pretty weak.

So as owners we decided doing right by the employees was worth more than taking our cash portion out of the deal. We used the cash to sweeten the “sign on bonuses” – even though it wasn’t coming from the new company. It was coming from us. We still had shares (and that’s a totally different story, with it’s lessons learned).

So I had just enough cash to buy a pen. A nice pen.

And that started my love affair with Montblanc. And that started my love affair with choosing people over money.

This weekend as I snapped shots with Pressgram, I couldn’t help but remember those stressful days in its campaign, and the stressful days selling ICE.

But I also couldn’t help but look back on the last thirteen years to see how good life has been. I invest in people. It pays dividends with compound interest.

We all choose what we invest in. All the time. What are you investing in?

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