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SMT Conference: Digital Entrepreneurs Prep For Future As Best As Possible

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How to evaluate the potential sale of a digital startup was discussed by the panel
Founders of digital businesses cannot predict when their companies will be bought or what will happen to them after they have sold their business, but there are several things they can do to prepare for that process and make it smooth. Speaking at a panel at the '13 Covington & Burling Sports Media & Technology conference titled “After the Sale: What’s Next for Digital Entrepreneurs,” former Fantasy Sports Ventures exec Christopher Russo said, “The sale is the end of the process. You can talk about what you did or didn’t do right in the last month or two months, but the reality is that a lot of the decisions you make years before affect that outcome.” Russo said investors a company takes on can affect when a sale is made, and partnerships a company strikes can affect whether a sale happens. Fantasy Sports Ventures did an early partnership with Gannett, which acquired the company years later for $30M. Shannon Terry, who sold his company, Rivals.com, to Yahoo, said that it is important to think in advance about what role you want in your company after it has been acquired. He said that he did not consider that during the sale and became a “father” figure afterward without an active voice in how Rivals was run. “From a leadership perspective, be true to yourself as to what your role is,” Terry said. “If you’re going in to integrate the asset, do that and understand that. As you enter the term sheet negotiations, have a plan and be true to it for yourself and your leadership group, so that you don’t build unneeded angst as you move onto the next thing.”

NEED TO STAY FLEXIBLE: However, Peter Vlastelica, Senior VP/Digital at Fox Sports, which acquired his company, Yardbarker, said, "Be flexible with it.” Vlastelica: "I thought a year or two into the deal I’d be intellectually absorbed with something else. That had nothing to do with Fox. It had to do with this bias against big companies in general. But ... you could argue Fox Sports is the most successful startup of the past years. There’s a culture there I didn’t expect. ... It doesn’t feel like I’ve sold out and gone to work for the man.” Russo said that acquisitions are done in unique moments when other companies are looking to buy an asset. He added, “Your chance to get to the finish line are a lot greater if you don’t give yourself two months to make it happen (because you need funding).”

ON TRENDS AND OPPORTUNITIES THEY SEE: Vlastelica: “I’m interested in enabling technology. Personalization is something we still all collectively have a long way to go in. Team Stream (an app from Bleacher Report) is a great personalized product ... but when you start to layer on other types of personalization ... there are different types of Lakers fans. There are Lakers fans who grow up in L.A. There are Lakers fans that didn’t. There are Lakers fans who remember Magic. There are Lakers fans who don’t.” Terry: “At the rate that mobile is ascending, there’s some help you can get from tablet and how it’s viewed, but I see mobile being two-thirds of usage very soon. We have to navigate that or slow it down.” Russo: “More tablets were sold in the last year than laptops or desktops. We’re just beginning that trend.”

Check our On The Ground blog for continual updates from the conference, including a podcast recapping the highlights from Day 1 of the event.
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