StubHub's founder sold the company to eBay for $310 million in 2006 after six and a half years, choosing the collaborative buyer over Ticketmaster, which he calls "Darth Vader" for its anti-competitive moves. He was ready to leave, had a growing family, and wanted better balance. The timing proved lucky: StubHub later hit a $4 billion valuation under eBay, and he avoided the 2008 recession.
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I guess to learn a little bit more about the acquisition though, you know, like what led to that? And I would say like, you know, from like a personal kind of like founder journey, you know, how did you kind of think through that?
Yeah, so we had a couple of different overtures at different times from bigger companies that were interested in what we were doing and sort of approached us with, you know, with the message that they were potentially interested in buying us. One was Ticketmaster pretty early on. And Ticketmaster was kind of— we called them Darth Vader, um, because they, you know, they were kind of this like notoriously sort of difficult company to deal with, kind of anti-competitive in a lot of ways, did a lot of things to try to get the teams to not work with us, um, threatened the teams, you know, threatened us, um, tried to use the PR, some of the PR, um, kind of messaging I was referring to, and some of the state scalping laws and, um, you know, kind of against us, even though they were sort of— they were more or less involved in ticket scalping as well, or, you know, you know, kind of reselling tickets. Um, so, you know, we, we did have a conversation with Ticketmaster early on, but it didn't go very far. And in retrospect, I don't think we should have done that. Um, eBay had approached us a couple times and We had a pretty good relationship with eBay. eBay, they were not an evil empire the way that Ticketmaster was. They were a much friendlier company. I still think they have that reputation, generally speaking, today. We were collaborative with them as it relates to government relations. We had been working with them in a few states The way the ticket scalping laws work is there's no federal law. As far as the US government's concerned, you can sell a ticket for $1 billion if you want. But there were some states, many states also had a free market, but a handful of important states had ticket scalping laws, and it was statewide laws. We were working with eBay as we got to some more scale to try to modify, to try to lobby and get certain states to change their laws. And so we had sort of a collaborative relationship with them, primarily on that scalping law, on that effort. But we also kind of knew the guy that ran their tickets category, and we sort of were friendly with him. And they had approached us, I think when we finally did the deal, I think it was the third time, maybe it was the second time, I don't remember, but they had approached us at least once before. And we never kind of got very far because the price discussion was never interesting. And then when they approached us the last time, when we finally sold it, which was kind of like the second half of 2006, you know, I had been doing it for like 6 and a half years. My wife was pregnant with our first kid. I got married, you know, kind of halfway into the StubHub experience. My wife was pregnant with our first kid. we had about 450 employees. I had gotten to the point where the job was kind of, in some ways, less interesting to me. It was— I enjoyed sort of the early startup stages of scrappy, 10 people in a room building stuff and celebrating every little milestone. And there were certain things about the job that I just didn't like as much, managing lots of people, dealing with know, sort of HR issues or challenges. And, um, and so I just kind of gotten to the point where I was sort of— I was also open to kind of moving on, you know. And, and also I, I knew that, you know, the work-life balance, it had gotten a little bit better at that point because I had a senior team that I could rely on. So it wasn't as crazy as the first couple years where I was, you know, working 80 hours a week or more and, you know, never really, you know, never really sort of not thinking about, you know, the company, kind of always thinking about it no matter what I was doing. So that was a little better, but still not great. And I kind of liked the opportunity of— I felt to myself like, hey, if I sell the company, I can still start another company, right? And I can do it again. It turns out it's not that easy to do it again. And we could talk about that. As I mentioned, my second one did not work out, but I kind of told myself that this isn't going to necessarily be my last chance to do it. And I thought I could kind of do it again and I was kind of ready to move on. And they got to a point on terms and price that I thought was a reasonable price. In today, in the market, in the 2020 market and 2021 market, it wouldn't have been a reasonable price for a bunch of reasons that we could talk about. And in retrospect, I sold the company at a time— StubHub today is worth— well, eBay sold it recently for $4 billion. So it's worth $4 billion or more. But then I heard they applied— they what do you call it, filed to go public. It never happened because they filed to go public, I think, at the beginning of '22, earlier this year, and then the market cratered. So that didn't happen. But I've heard that the price stock was like $13 billion or something like that. So it's worth a lot more than what I sold it for. I sold it for $310 million, which at the time was one of the— I think it was one of the largest deals that year, and it was a pretty large deal. Today, it's like a Series B round. But, you know, so in retrospect, I sold it early. It was a life-changing event for me financially. I didn't grow up with a lot of money. I mean, I wasn't poor, but I didn't, like, my parents weren't wealthy. So, there was a lot of positives to it, and I think it was a good time for me. I ended up having all this time with my newborn son, who's now almost 16 years old, sophomore in high school. So I think there was a lot of positives to that, and I don't regret it, but it's a huge decision, obviously. And when you have a company that actually is working, I mean, the one thing I will say, when you're running a company that's actually working and everything, you finally figured it out because it's so hard to get to that point, right? I mean, and as an investor and as a as an entrepreneur a second time around that didn't work out, I know how hard it is to get to escape velocity where you've got success and you're growing at a rapid pace. It isn't that easy to get that again. And so if you decide to sell, it's a huge decision and you got to really think it through. And there are there are pros and cons to selling it. It turns out we sold it in 2007, and 2008 and '09 was the Great Recession. So it was kind of— we sold it in a market right before a kind of a 2-year downturn. So obviously, it's much better to sell when the market's kind of positive and maybe even frothy than it is to sell in a downturn. So anyway, those are just some thoughts. But yeah.
