An incredibly ‘chaotic’ acquisition…

Welcome to The Wise Exit (brought to you by Exitwise)

This week, we’re telling the story of Antonio Garcia Martinez and his company’s incredibly chaotic acquisition.

Let’s dive in…

Chaos Monkeys 🐒

Like many startup stories, this one starts in San Francisco, and it ends with one of the weirdest acquisition stories in Silicon Valley—so unique that it inspired the hit book ‘Chaos Monkeys’.

After working at adtech company Adchemy, Antonio Garcia Martinez left in 2010 to start AdGrok — an advertising platform enabling business owners to automate keyword bids on Google Adwords.

Even the beginnings of the company were chaotic.

On March 1st, Martinez came across Y-Combinator’s application deadline (March 3). He convinced his 2 co-workers at Adchemy to pull all-nighters and help him submit the application on time.

They were accepted to the program. Despite the disorganization, AdGrok quickly found traction with customers and, within a year, there was talk of an acquisition.

Thanks to fellow YC member Mick Johnson, Martinez received an intro to Facebook.

Sold to Twitter, Went to Facebook 😅

After initial talks, Amin Soufonoun, Facebook’s head of corporate development, relayed that Facebook would not be acquiring AdGrok.

They had a different deal in mind: Martinez joining Facebook alone, without the team he had built.

This is not the arrangement that Martinez had imagined, and so, he took the situation into his own hands.

In a move of “4D chess”, he negotiated a deal with Twitter for a $5M acquisition and acqui-hire of his engineers. As part of the negotiation, Martinez would be allowed to leave and join the Facebook team.

Over the next half a decade, he helped build the Facebook Ads business into the behemoth it is today.

M&A Lessons From Our Story 📝 

Your buyer might come from a blog post.

After one of Martinez’s blog posts blew up in the tech world, he received a message from Twitter employee Jessica Verrili who asked him to come in for lunch.

Polite emails with Jess would turn into lunch and meetings with other team members which would then evolve into the acquisition.

When you focus on distribution, you increase the surface area of your luck. It has the potential to change the course of your business and your life.

“I posted the piece [on Hacker News] while asking a few friends to upvote the article to give it some initial traction. Within minutes, it was the number one post on Hacker News, seen by every serious (and not serious) young techie in the world.” Send your posts/tweets to your friends and ask for their help in distribution. Distribution is a team sport. The more eyeballs, the more chance of a potential buyer seeing it.

Knowledge is power.

“Walking into any meeting you should know every goddamn thing there is to know about the other person; if you don’t, you’re failing.”

Quoting Emerson: ‘there is no knowledge that is not power’ and that’s especially true in terms of people.

Martinez says, “before you sit down with people on whom your entire financial future and that of your descendants will depend, you should know them better than their mothers do. Know what they want—whether money, power, social approval of various flavors, or merely a comfortable life—and you can predict 90 percent of what they eventually do.”

You must will a deal into existence.

“If you do it, it is no dream; and if you do not, a dream will remain.”

The easy option would’ve been to just sell to Twitter.

But Martinez wanted to go to Facebook. And he wanted it bad. So even though the arrangement was infinitely more complex, he managed to make it happen. If you want a deal to happen, you need to will it into existence and fight for it. No one else will do it for you.

Cashing Out: Celebrating One Year 🎉

It’s been one year since we launched the Cashing Out podcast.

That’s 52 weeks of:

• Incredible stories from founders and entrepreneurs 🤝

• Insightful interviews on M&A tactics and strategies 💰

• And lessons learned as we try and bring you the best podcast we can 📈

We want to say a HUGE thank you to the guests that joined us for the first year of episodes, and we’re more than excited for the next year to come.

We hope you’ll listen along 🎧

M&A News 📰

Cannabis: Las Vegas headquartered Planet 13 Holdings acquired VidaCann’s vertically integrated marijuana operation for $48.9 million.

Cybersecurity: Cybersecurity behemoth Tenable acquired Ermetic, an Israeli startup which build a fully integrated cloud-native application protection platform, for $265 million

3D Printing: Align Technology, the manufacturers of Invisalign clear aligners, acquired polymer 3D printing firm Cubicure for $79 million. Cubicure team is reported to be smiling wide. 😃

That’s it for this week.

Tune in next Wednesday for another deep dive, and have a great rest of the week 👋