Pluck, three years later. . .
March 4, 2008
Techcrunch is reporting Demand Media bought Austin-based Pluck for $75MM cash. Frankly, I am fairly surprised. I first wrote about Pluck after sitting on a panel at the McCombs School of Business (UT @ Austin) Web 2.0 Panel in 2005. I compared VC-backed Pluck to bootstrapped Consumating, suggesting that to be considered a success Pluck would need to be sold for $100MM versus a $1-10MM sale for Consumating. My thesis was that Pluck was using a Web 1.0 funding style to build a Web 2.0 business and it was very likely that the founders would see little, if any, upside when and if the company was sold. Consumating, on the other hand, was a classic example of a Web 2.0 funding method coupled with a Web 2.0 business model providing the founders with a very nice upside.
I was dead on with my analysis of Consumating. Within a few months Ben Brown sold Consumating to CNet for a tidy seven digit number and a cushyjob. Ultimately Ben would leave CNet and the property is scheduled to be shuttered later this year. Pluck was fairly quiet over the next two plus something years and I had assumed they were dying a slow death. Fortunately for Mayfield and Austin Ventures, they were able to sell Pluck. Assuming Techcrunch is correct, and the company was sold for $75MM in cash, the founders shared around $6.2MM:
- Dave Panos: CEO and Co-Founder $1.75MM (estimated)
- Andrew Busey: Co-Founder $750K (estimated)
- Will Ballard: VP and CTO $875K (estimated)
- Ken Nicolson: CMO $750K (estimated)
- Rachel Brush: VP Operations $500K (estimated)
- Eric Newman: GM $250K (estimated)
- Steve Semelsberger: VP Sales $250K (estimated)
- Stephanie Himoff: VP Sales UK $250K (estimated)
- Adam Weinroth: Director Marketing $125K (estimated)
I have heard that the deal was in the $50MM range with the ability to reach $75MM based on various milestones (you never get the earnout money, ever…). If this is the case, the management team likely will get nothing, but a new employer out of this deal. Why? Learn about Participating Preferred Stock.
