8 Lessons I Learned Selling Two Startups In 12 Months
One VC-backed team effort, one bootstrapped side hustle
This article was originally published behind the paywall in Inc.
https://www.inc.com/joe-procopio/8-lessons-i-learned-selling-two-startups-in-12-months.html
Entrepreneurs succeed by figuring out what they’re doing wrong and making the right adjustments. That’s what we call learning from failure, and frankly, it’s not a lot of fun.
But a lot of entrepreneurs don’t realize they can learn just as much from their successes as from their failures, provided they take the time to review those successes and extract the lessons.
A long time ago, in a perfect storm of circumstances, I wound up selling two companies nearly back-to-back – one as a part of a talented VC-backed team, and another totally on my own.
Here’s my story and – now that I have the proper amount of hindsight – the most important lessons I learned.
How We Got Here
14 years ago, I walked into my friend Robbie’s new office in a horrible mood. I had been consulting for his new sports data startup, and today we were meeting to continue our discussion of whether or not it was possible to use the sports data he had to automate content.
I loved these meetings. They were about automation, artificial intelligence, technology, writing, and sports — basically all that things I built my career on plus how I spent my free time.
But on this particular day, I wasn’t showing much enthusiasm. I explained that I had just come from a meeting that was supposed to have been about finalizing the funding of a passion project that I had been working on for close to a year. What actually happened was an unbelievably bizarre rejection. Months of free work, planning, and negotiation had just vaporized in an hour.
Needless to say, I was now in shock and without funding.
Door Closes, Window Opens
He listened patiently and then told me that he had been thinking more and more about the automated content solution I had proposed, and he thought we should get started.
My mood shifted instantly. “Give me the weekend to come up with a design,” I said.
By Monday, we were underway, building what would become Automated Insights, a company that would offer the world’s first commercially available Gen AI platform.
However, in our working agreement, I negotiated the right to keep working on the project that just got unfunded — because I believed in it that much.
Things happened quickly after that. We closed our Series A raise and, in 2012, we landed Yahoo Fantasy Football, the NFL, and the Associated Press. We raised a strategic B round in 2014, the same year our automated content churned out over one billion articles for dozens of customers.
But then there was that other project.
Passion Project Evolves
ExitEvent, a startup ecosystem data network and information resource, had evolved into a full-fledged second startup by late 2011, with just the three to five hours a week I could spend working on it. And I knew that the path that we were about to embark on at Automated Insights was going to eat up that scant amount of spare time.
I also realized that ExitEvent was starting to suffer from the limitations of my time. I knew, even though every instinct I had as an entrepreneur told me not to, that it was time to hand it off.
So I sold ExitEvent to American Underground, a regional incubator spun out of a media conglomerate. And less than 12 months after the ExitEvent acquisition was finalized, Automated Insights got snapped up by Vista Equity Partners, a private equity firm.
Now, in trying to make a long-story less long, I made it sound like both acquisitions just “happened.”
Nothing could be further from the truth, and here’s what I learned along the way.