How Key Ring Sold to Gannett
20th September 2012 · 0 Comments
You may have already heard the news that we had our first official exit…and it’s a real one. Last week, Gannett, one of the largest public media companies in the world, bought Key Ring, a 2010 graduate of Tech Wildcatters’ inaugural class. We couldn’t be happier for the team, as this allows them to keep growing the brand from their home in Dallas, and gives them that first big startup win.
When we started Tech Wildcatters, we hoped to accomplish a few things. First, we wanted to play to our strengths rather than be a “me too” kind of company, which is why we specialize in b2b startups. Second, we wanted to help grow the local innovation ecosystem by helping the new generation of founders start up real companies, exit, then do it again while giving back to the next generation. Third, we wanted to make a top decile venture return (not guaranteed, yada, yada, yada…).
There is a lot of talk in the startup world about “acquihires” and plenty of startups buying other startups (which can be a great strategy if done right), but those aren’t the exits that move the needle. Even Paul Graham admitted as much this week in his post titled Black Swan. However, as investors, we have a duty to maximize our shareholders’ capital. The question that looms large in my mind is, should we consider a financial win above other things like community, win for founders, etc?
I have always said absolutely not. After all, if we take a short term win, will we lose a longer term opportunity? This week at Techcrunch Disrupt, we had a company launch in the battlefield that graduated our program last December. Paytap is a system that allows you to pay other people’s bills with the money going directly to the biller. It could be a parent paying for kids, kids paying for aging parents, roommates, or just a gift. They announced the fully developed platform with over 10,000 billers integrated, along with Amazon for purchasing goods.
In a world where we’re expected to do more, faster…systems like Paytap aren’t afforded the luxury of building it right the first time. This is where we are a little bit different. We certainly push hard for big milestones, but we also push for quality. When you’re talking about financial transactions, there are major security and regulatory concerns that must be addressed. So a launch 8 months after they finished our program isn’t seen as a failure…we see it as a huge win.
It wasn’t much of a surprise when Paytap failed to wow the Disrupt judges with their app. It was also no surprise when they took Best of Show at Finovate in NYC one day later. In the end, it’s a lot more important to impress your industry and potential customers if you want to build a real company, so they couldn’t be more excited. And we couldn’t be prouder!
Bringing it all back to Key Ring and being proud of our founders, we look forward to hosting CEO Chris Fagan in a few weeks, when he will be sharing his startup experience and plans for the future. Stay tuned!