Millennial Media Files for $75 Million IPO
Millennial Media, Inc., Baltimore, MD, has just announced that it has filed with the U.S. Securities and Exchange Commission (“SEC”) for a proposed initial public offering. The target offering is $75 Million. Morgan Stanley & Co. LLC, Goldman, Sachs & Co. and Barclays Capital Inc. will serve as joint bookrunners for the proposed offering. Allen & Company LLC and Stifel Nicolaus Weisel will act as co-managers. Law Firms Cooley and Wilson Sonsini Goodrich & Rosati are the law firms involved.
Millennial Media is a mobile advertising platform startup company founded and lead by former Advertising.com people and based in the Canton neighborhood of Baltimore, MD. Our technology, tools and services help app developers and mobile website publishers to maximize their advertising revenue, acquire users for their apps and gain insight about their users. They offer advertisers audience engagement opportunities on mobile devices with advanced targeting capabilities.
Millennial Media raised around $65 million in Venture Capital through Columbia Capital (Series A, B, C, D), Bessemer Venture Partners (Series A, B, C, D), Charles River Ventures (Series B, C, D), and New Enterprise Associates (Series C, D) between January 2007 and January 2011.
The company recently acquired Condaptive and Tap Metrics (launched at Social Matchbox back in 2009 after graduating from LaunchBox Digital).
Old School vs. New School Investors
The dynamics of the investment community are continuing to change and we can all expect to see more change in 2011. It seems like just a few years ago the image of VC’s that everyone had in their mind was a bunch of old guys in sports jackets or sweater vests at the Palm, but there are quite a few trying to shake that image up. Take First Round Capital’s Holiday Video parody of Rebecca Black (the actual Rebecca Black video they based theirs on) for example (I can’t help but think of the Connected Venture (Vimeo) Lip Dub – Flagpole Sitta by Harvey Danger video a few years back. Early stage startup investors are starting to look more like post-graduation pre-grad school finishing schools (or perhaps alternatives to them like the one put on by YCombinator) and their marketing is starting to look that way as well. With all of this money being splashed around by early stage investors and all of the exits that have been happening recently the outlook for startups is certainly good, however, this is the stuff that Bubbles are made of – time to get to work while the market is good for exits!
Webs.com Acquired by VistaPrint for $117.5 Million!!!
Webs.com (formerly Freewebs.com), the Silver Spring, MD based startup founded by Haroon Moktarzada, Zeki Moktarzada, and Idris Mokhtarzada has just announced their acquisition by VistaPrint for $117.5 Million according to a statement from one of their people who just share details with us! This is really big news and proof positive that the East Coast Startup community has the right mix of people and opportunity.
In August 2006 the Mokhtarzada brothers raised just over $11 Million from local Venture Capital firms Novak Biddle Venture Partners and Columbia Capital, and from Capital One co-founder Nigel Morris. The company quickly became the Web 2.0 company in the Washington area. This is a huge win for everyone involved and largest cash acquisition of a Web 2.0 company in the Washington area startup community in recent years.
The company started out in 2001 on a single Pentium computer with Zeki as the CTO (he still is today) and Haroon as the business guy, but scaled up into the tens of millions of users range. Recently, Webs.com acquired Pagemodo, and app that helps people customize their Facebook business page. They also launched a light weight CRM tool. A few years back the company spun off the Social Gaming Network which was also acquired. The company also spun out teams that went on to co-found Manhattan startup AppsSavvy that received funding from True Ventures, and DC based startup recruitment firm staffmagnet, and Social Matchbox. Other Webs.com alumni have gone on to found and work in top positions of quite a few other Washington area startups, too many to name.
The company recently added Rich Ellinger who previously served as CTO at Jobfox and Kathy McGovern who had previously served in marketing roles for Careerbuilder and Network Solutions. While the newcomers certainly had a role in things, the core team at Webs.com is the real story – they have an amazing group of people who have been highly committed to the company over the years. Former Washington Post tech reporter Kim Hart wrote a good piece that also fills in the back story, check it out here.
Congratulations to all of you guys!
Updated: Video shot and produced very recently, titled “Working At Webs“. I’m guessing it was filmed by someone in house because they managed to Dorian in the Foosball shot (among others in the right shots elsewhere).
How To Find A Startup Co-Founder
If you don’t have a co-founder or are looking for an additional co-founder then you should not be obsessed about finding one. Instead, focus on finding people who you can work with and who buy into what you are doing. You can always promote people into co-founder level roles after they have demonstrated their commitment to what you are doing. Further, you can also set aside equity or options or both for that. That doesn’t mean you should not look for people. There are a lot of reasons why you should have a co-founder, some have to do with getting work done and others that have to do with attaining resources like loans or investment later.
The best way to look for people is through people you know and meet through networking. If you have local events where you are then you are very likely to meet the kind of people who can introduce you to potential co-founders as long as you are going to events where people interested in what you are working on are likely to be (many promote that they are but are just lead generation or money making vehicles for the organizers). For example, if you are building a web or software product startup company that makes products then you should find the events that draw these people where you are. If you are in the Washington area then Social Matchbox events are the best place to start. It is also a good idea to attend local developer user groups to meet people.
Whatever you do, be sure that you look at people who you meet as if they were potential employees first. You can’t skip the interview and due diligence and reference check stuff just because it is a startup. Too often, people give people a free pass and this often ends in disaster or hard times that could have been avoided.
There is also a right time and a wrong time for looking for a co-founder. A lot of people come up with ideas and then think that they are ready to find a co-founder. This is typically a really bad idea. You get all wound up around an idea and then put a lot of energy into it, but don’t get too far before a lot of time, energy and resources have been spent without an upside in sight any time soon.
A lot of times you are much better off if you can get yourself set up with some of the basic trappings of a startup before you start looking to pull others in. For example, you could spend around $5-7 k to get some help from a couple of college students during their summer break and take a summer break from your own job, call it a sabbatical and get your employer to give you the time off to work on a project that will make you a happier employee when you come back and they might buy into it. Another option is to just quit your day job for the summer and plan to start looking again at the end of the summer, something that you could more easily plan for than to just quit your job with no end in site for when you wills start making money. It really helps if you have money set aside which you can do if you plan ahead and a supportive spouse. I want to emphasize that quitting your job just to work on your startup full time is a dumb idea. A lot of us who have done it will confirm this. You need to have money committed first. If you do what I’m talking about here you will limit the collateral damage to your bank account and career, and you will probably have something that works by the end of the summer if you choose well. Note that you need to pick up your summer college interns before the end of March or April and this will be no easy task – you will have to prepare aggressively for this if you want to get ones that are even decent. Part of that prep work should be becoming your own technical co-founder (provided you are comfortable with that – see this previous article on that subject to see if that may be right for you). At the end of the summer you will have something that you can work with in your spare time to market and you will (provided you treat them right and paid them, and continue to pay them) have a couple of students who can continue to help with things while they are back in school and you are back at work. With a prototype and some support for it you can now take your idea to a few seed or angel investment groups and the odds go way up that you will get taken seriously. There are no guarantees, but that is part of the joy of being an entrepreneur – you have to bet on yourself and sometimes you win and sometimes you lose. Smart entrepreneurs learn how to increase their odds of success. If you happen to be in the Washington area I would be happy to chat with you about how you can accomplish this one on one.
Remember that the chicken or the egg part of this is crucial. You can burn yourself and your cash supply and your potential co-founders out faster than you can imagine if you don’t plan for small incremental wins. Don’t make your project so big that it will never get built. If you start talking to people and what you have in mind is something that will take months to build then you are already thinking too big. Even people who I know who have built and sold their companies have trouble with this concept. No amount of resources will overcome the small incremental success necessity. People’s morale goes up and down, but without small wins you are going to create a sink hole for everyone involved and that is not going to get you where you want to go. I’m just as guilty of this as the next guy. I wanted to be able to let people post jobs here on Social Matchbox but I also wanted it so that people could create profiles, and a lot more that I can’t really get into here. I should have started out with just getting a mechanism in place for people to post jobs. Instead we built it all. We have both now, but it took nearly two years because there were just a lot of other things that kept demanding attention first. In the end we got both, but we’re still working on things and the post jobs aspect could have been done in a few weeks or maybe a Month if you add in payment handling. Just don’t let yourself get all wound up in the potential when you can have a small win. Small wins also help you learn what you can accomplish and what it takes.
Good luck in your effort. I would love to hear about your experiences too.
PayByGroup Raises $50k, Gears Up for Angel Round
PayByGroup, San Francisco, CA has just informed us of their raise of a $50k in advance of a larger Angel round anticipated to kick off in January. Co-Founder & COO Frank Langston and Co-Founder & CEO Camilo Acosto are two Princeton alums who presented their last company as part of the Social Matchbox Startup Launch series just a few years ago. This time around they picked up Dan Oblinger, a former DARPA Program Manager with a PhD. in Artificial Intelligence from the University of Illinois at Urbana-Champaign. Aaron Batalion, the CTO of LivingSocial, is an adviser to the team. They initial seed money came from Dave McClure’s 500 Startups program which is beginning to look more like a Y Combinator or Tech Stars program than a fund based on how things are running so far.
Left to Right: Frank Langston, Camilo Acosta, Dan Oblinger
Another recent trend has been DC founders getting connected up with these guys through Paul Singh, a DC startup community alum who moved out there. It is sad to see these guys go, but at the same time it is getting to the point where we have a strong contingency of Social Matchbox alumni in the bay area as a result of startup founders moving out there when they can’t find funding here at all or when they can’t get reasonable term sheets from Washington area investors.
Camilo characterizes PayByGroup as a social purchasing platform in which no single person has to front money for group purchases like vacation rentals, concert tickets, sporting events, and any other activity that groups do together where payment is required. He says they are integrating with merchants directly as a payment button and employing a tipping point mechanism where a minimum number of friends have to pay before everyone’s payments go through to the merchant. This sounds a lot like a product that vendors might choose as an alternative to Living Social or Groupon. Another similar company is Urban Escapes, a company that we ran into up in Philadelphia around the time they were acquired by Living Social – they were focused around events (e.g. Shooting AK-47’s and drinking Whiskey).
When I asked Camilo why they decided to go the 500 Startups route he said that they decided to apply and join 500 Startups because of their deep focus on data, design, and distribution. He pointed out that the list of mentors and founders that are part of the program is a who’s who of Silicon Valley entrepreneurs, which is something they knew could give their startup a significant boost during the early stages.
I also asked him if they had any luck trying to raise money in the Washington area and the answer was a resounding no.
We did not try to raise money in the Washington area this time around, having built and launched their last startup here. Camilo said that from their prior experience they knew the DC landscape was not ripe for raising seed-stage money for their type of startup. He pointed out that the Washington area has fantastic venture capital firms that can help revenue-positive companies expand, but that the angel and seed stage scene is sorely lacking. Ryan concluded by saying that he hopes this changes soon for the long list Washington area startups that need seed money to survive.
Having spoken with and sat in on a ton of area investors, funds, angel groups and the like over the last few years (and before that) I want to point out that he is right. It is really depressing to Washington area founders when there are investors ready to put money in at the $1, $3, and tens of millions a year in revenue stages but not at the napkin, post-prototype, and beta/initial go to market stages. There are exceptions, but these are usually companies launched by founders who have the ability to put $50-250k of their own money in to get to through those initial tranches.
A Recipe for Becoming Your Own Technical Founder
One of the most common things I hear from people in the startup community is that they are looking for a technical co-founder to help them build a prototype of their startup idea. This can be a really frustrating experience. Today I was reading a post from someone on Reddit talking about their thinking about going back to school to get a second bachelors in Computer Science. I started writing a comment on their post but it got really long winded so I decide to turn it into a post here instead so that Social Matchbox community members could benefit from it too. This is something I have personally considered numerous times myself and I know that many of you have too. I’ve got intro books on Ruby on Rails, JavaScript, MySQL, PHP, Web Design, Web Development, and have logged hundreds of hours attending developer meetups and conferences as well as in watching tutorial videos online. One of my favorites is the “You Suck At Photoshop” series when I wanted to learn how to wield Photoshop more effectively. If you are on a shoestring budget be advised that there are some really amazing tools out there that you can use on Ubuntu – there is not really a good argument for a poor startup founder to pay the megabucks for Photoshop anymore. Do that after you get funded or get your prototype working, then start becoming a big spender. Ok, I’m getting of topic…here goes.
So here is the approximate recipe for becoming your own technical co-founder. You should decide what you like doing, feel comfortable doing, and want to do. If you are afraid to install a new program on your computer or haven’t done something involving HTML or programming in your life then skip this, go take a class at your local community college on building a website and then come back for this (unless you have a really good tutor).
The thread I read previously was someone just asking if they should get a second bachelors in Computer Science. If you are thinking about this now you were probably thinking about it before. You, like me, probably took at least one programming class in K-12 or college or both. If you were able to handle the math and science requirements to get a BS in undergrad then you probably are not going to have that much trouble learning to program so keep reading. If you didn’t then you probably want to consider going the Web Developer or Web Designer route (see notes about the Web Developer route below). The bigger question is what you want to do – a CS degree or second one is only training in how to think about the field of computer science, how to learn a language, and stuff like that. I’m omitting a lot here, but this is sufficient for this discussion. It prepares you for a lot of possibilities. If you know what you want to do then you could easily just come up with a plan to develop a competency in what you want to do without getting a second BS. If you want to be the next Sergey Brin or Larry Page and have plans to come up with the next search engine or a complex algorithm to solve a series of complex problems then you should be thinking about getting a MS in Computer Science and just taking some leveling courses (they will require you to do so to get into one). Avoid anything online, you need to do this in person – programming is a social learning experience that just can’t be done online via programs that are usually more like survey courses than cutting edge curriculum in my experience (I’ve looked many of them).
So to decide what it is that you want to do, you need to choose a level of difficulty and focus that fits your personality and abilities. If you can stare at a computer for days and days writing, editing, doing math, then programming/software engineering is for you. If you are a very visual person then web development is probably more your thing. If you like configuring things, playing with databases and spreadsheets then you might want to think about database engineering.
So here are the three tracks as I see them: Web Developer vs. Software Engineer/Programmer vs. Database Engineer.
As a web developer you need to learn CSS, HTML, JavaScript (especially JQuery because that is what most people are using), and MySQL. You can find an intro to book for CSS and HTML at the library or bookstore and pick those up. You can supplement that by going to your local Web Developer meetups (you will need to listen and learn through people giving talks and outside of talks, developing some peers will help a lot when you get stumped and you will). For JavaScript (JQuery), you should probably take a class on it – there should be something for this if you live in a major urban center and if not then travel to one nearby and take a class on it there. There are probably some you can do in a weekend or online (take one from someone who programs in it, not from a training institute or online university). You don’t need to much MySQL knowledge to get started as that is pretty much going to be taught if you take a class or read a book about JQuery.
If you want to be a Software Engineer/Programmer then you need to decide what kind – there are the kind that work on enterprise software, embedded (think mobile devices, and web programming). If you go the web programming route then all the web developer skills are the same, but you need to learn one of the following combinations: Ruby on Rails, Python and Django, or PHP and Zend or Symphony. You should be able to pick up a book on how to do one of these pairs that will also cover MySQL basics. Pick a book that helps you build something from scratch. Once you get done with that then you should take a few classes on it. Ruby on Rails is very social as far as communities go so it is probably the easiest to jump in and get started with – there are user groups pretty much everywhere these days and people who will help. Python and Django are also popular and pretty social, but not as widespread in my experience. PHP is splintered a bit – people use it for WordPress, Drupal, and custom programming so there are factions (if you want to be a programmer you want to steer clear of the WordPress and Drupal crowds, at least at first – you can read up on these and make your own decisions though, there are a lot of people who make a good living off building and customizing websites built around both). If you want to build enterprise software then you could pick up Java or C#.NET, but these are a lot more complicated to learn and so you would be better served by going the Ruby on Rails route or the Python and Django Route.
A database engineering track is something that is best learned via course taught by a college or university or trade school. You are going to have to know a lot and be the custodian of critical data for an organization and to do that you are going to want to make sure you don’t have any big gaps in your knowledge. Programmers are building and then releasing so there is a little more opportunity for getting it wrong, then testing it, then fixing it. With databases, getting it wrong can be tragic.
I would personally recommend Ruby on Rails + MySQL + CSS + HTML to start out, then JavaScript & JQuery later if you really want to get yourself headed somewhere where you can build something and then even potentially do that full time within 3-12 months. I say 3-12 months implying that you might even want to change careers a bit. In the 3-12 months you you are going to have to a) work on at least one project to show people that you can build something using these technologies, b) get to know some people at your local meetup who might be willing to hire you part time for a project while you are learning your way – even if it is part time, and c) get someone who can be a reference from you based on a project.
If you have your own startup and that is why you are doing this then you need to make sure to budget a ton of time – 20 hours a week at least. If you are looking to learn to program and get some experience, you should create a profile here on Social Matchbox and indicate on it that you are looking to find a startup company that is looking for a technical co-founder or programmers. There are plenty that I’ve spoken to that are willing to take a chance on you learning while doing. If you have stories about doing this yourself I would love to hear about them.
Is Your Team’s Quest For The Best Killing Your Prospects For Recruiting The Best Programmers
I advise and help a lot of software engineering teams and software executive teams to recruit the best programmers and other team members. Not a week goes by that I’m not involved in this aspect of startup and software company operations. I’m writing this post because recently I have had conversations with some really amazing teams that are seriously hurting their prospects for hiring the best programmers. I would like to share some perspectives and some actual examples that have come up that you might be able to avoid in your own efforts.
One of the most recent examples is one where a small software startup team interviews someone who is essentially an A- with the respect to what they are looking for. In their particular case, an A or an A+ would essentially be co-founder material at what is otherwise an established startup. In my book what often differentiates a co-founder type from a solid team member is the fact that the co-founder type gets the full 360 view of what the startup is about and they are willing to go the extra mile all the way around to help it to succeed. You can usually spot these people because they were the ones who took the time to do the free trial of your web app before the interview and before you asked them to. They probably had a bunch of 360 type questions about it too – not just questions like how much does this job pay, how many hours is it that I’m expected to work, etc. In fact, they are probably commenting on how much they dig the people working there and things like that. So to get back to the point above, the established startup was interviewing someone and they had the whole team there but one person had to leave before they spoke to the potential recruit who was an A-. The prospect didn’t feel slighted, but they got a slightly better reception at another company they were interviewing with and they ended up taking that other job. It didn’t have anything to do with money at all. The second company could have offered $10-20k more and things would not have ended up differently!
Let’s take a look at a different example. An A person for a startup is usually someone who buys into the company. Success to many people is how much they make at the end of the year. For others it is working on cool technology. For others it is riding a startup that they believe in until it has a big exit and they get their reward for being there early and through thick and thin. There are not too many of these companies around. You know you’ve got one when people are willing to work for less than the market rate and they are willing to stay late without having to be asked. This is harder at a small early stage company because of the long road ahead, but it isn’t impossible. These are the team members who go to conferences and local meetups and pass out stickers for the company and talk to people about open jobs at the company and about the company’s product. I ran into someone from Spotify and another person from Github, both at the Ruby Conf held in Baltimore this year, both were doing doing just that. I also ran into the founder of another company at a similar developer conference this year who was repeatedly pressuring people to recruit people for his team. Those guys didn’t want to have anything to do with it, but the founder was paying their ticket to the conference I guess and just assumed that they would be as aggressive as he was. At least one of those employees quit shortly after that. I talked to at least one person in that room who was looking for a job and who would have been a great prospective hire for that founder. The same guy took a job with another startup – he met someone from that team in the same 30 minute window of time and the team member’s interactions did not feel artificial (I was sitting at the table with them both and followed things to their conclusion). The point of this is just to get you to consider that different people have different personalities and motivations.When you are recruiting people you have to recognize this. The takeaway from this should be two-fold. First, you should recognize the attributes of a person who is an A for your team. Second, you should be aware of the fact that aggressive recruiting efforts can backfire just like aggressive sales efforts and so on.
Another example of how it is easier to attract A people with a honey pot than with a pot of vinegar. I’ll call this the gauntlet interview. I’m constantly reading about interviews and recruiting efforts gone bad on Reddit and YCombinator’s hacker news. There are a lot of people on both sites that just don’t play well with others, but the comments there are usually born out of frustrations that people have with their day jobs or employers. I’ve seen a lot in my days – from cameras monitoring the one Internet enabled computer with a browser that employees can be used in a break room to the company I was once interviewing with standing over someone’s should and pressuring them to do something they did not want to do (aggressively) while I was ten feet away (I think they forgot I was there or else this was a preview that they wanted me to see). We’ve all been there. The objective in pointing this out is to encourage you to consider whether or not your interview has enough honey or not. I know one employer that has a two day 16 hour interview for every prospective developer hire. The company is well known for having a really high caliber team so this is a message that they are sending out to the national community every time someone makes it out to the interview. I guess in a way they are branding themselves as tough interviewers and smart people in the same way that the Ruby on Rails contributor who claims that he charges $10k plus first class air fare and a room at the Hilton for an eight hour day is branding himself as a bad ass programmer. The problem is, that company is wasting 16 hours of their day not counting the amount of time they are wasting of that candidate. They may get a lot of people as a result of it that they would not have gotten otherwise, but they are going to turn off even more people. The more frequent example of this is the two stage 1-2 hour phone screens that happen frequently that are followed by a full day interview. While I’m sure that having such a power session or sessions up front helps filter people out some people who you find to be undesirable, a short 30 minute up front call can also accomplish that and save both you and them valuable time if you are asking the right kind of questions. This is especially true when you have someone who is working full time and interviewing elsewhere. They may have other interviews going on concurrently and for them to have to schedule 2 hours up front and 4-8+ hours later for one interview out of a lot of others is something that will potentially raise red flags for their co-workers and superiors which could get them in trouble and even fired. What this accomplishes is that you get people who are willing to be honest co-workers saying no and people who are less than honest with their superiors and peers who are willing to say yes, because they are the ones who don’t mind taking advantage of the good will of others.
At the end of the day you should do your homework on what works for your situation and go from there. If what you are doing works then you probably don’t want to change it and that is fine. There is always room for improvement though.
