From Oxford to Silicon Valley, part six

VIEWPOINT
By Kulveer Taggar
Chief executive, Auctomatic

Kulveer had to negotiate with some of the biggest US tech firms

For the past year, Kulveer Taggar has been writing for the BBC about his time running a start-up company in Silicon Valley.

After twelve months of hard work, he has struck gold. His company, Auctomatic has been sold for millions of dollars.

He explains how the deal happened.

A month after announcing the launch of Auctomatic.com, my business partner Harjeet and I attended the annual Silicon Valley conference in Oxford.

Chris Sacca, our investor and Google's former Head of Special Initiatives, was asked to name a company to watch.

He joked that the last time he answered that question, the company he nominated, Photobucket, ended up being bought for many millions of dollars. So this time he nominated Auctomatic, and exactly two days after the conference, we were approached about selling our company.

We were really busy developing the company's product and the approach came as a surprise.

We were sceptical that any offer would be interesting enough to really consider. However, Live Current Media were very serious and saw real value in our service.

The three of us - Harjeet, Patrick, and I - began negotiations and after a month had come to an offer that was looking acceptable.

At one stage the Auctomatic team ran very short of cash

Then, out of nowhere, two extremely big and well known Silicon Valley firms also became interested in buying us.

High stakes

Suddenly we were in a poker game, with very high stakes, but little experience.

We learned fast though, and with Chris Sacca's help our confidence grew quickly.

Having done many deals for Google, his experience was very valuable.

Whilst these discussions were happening, my sister was also getting married, so I was extremely busy.

I practically lived on the phone, trying to work things out on the deal whilst also helping with wedding errands.

I remember taking one call without having any paper to make notes, so I started scribbling numbers down on a twenty dollar bill.

Everyone thought I was acting slightly crazy.

We started playing poker in the apartment to relax at night, which ended up helping us quite a bit. We could immediately see that to negotiate well you have to be able to bluff successfully.

The deal guys we were talking to were absolute experts. They kept pushing until they met resistance.

I remember spending a good two hours preparing before one important call in Crossroads Cafe, doing role-play and working out plans for each contingency - and then just about managing to come out equal.

Money worries

Kulveer eventually sold to the Canadian firm Live Current

Another challenge we had to face was that our money was starting to run low.

Before the talks had started, we had secured further investment, but couldn't close it whilst there was uncertainty over our future.

None of the founders had been paid for a few months, and at one point the company was down to a few hundred dollars in its account.

I remember walking away from one of our offers, when one of our engineers looked at me and said, "I think you're half crazy". I agreed, but then this entire process was only happening because we had never been afraid to take risk.

Although we were living off one dollar meals, we remained resolute and were only going to sell for something we were happy with, or go the independent route and raise more money.

Decision time

It was a complicated process choosing between the three interested companies.

We talked in depth about our goals for the company, our autonomy, who we'd be working with, how much upside we'd have, what we would learn, and so on.

We talked to our advisors, and it was Evan Williams (co-founder, Blogger) who reminded us that it was also a case of going with what felt right. We all agreed that Live Current was the best fit.

Looking forward, we are pretty psyched about the opportunities we have. The acquisition realises our plan of using Auctomatic as a platform to serve buyers.

Auctomatic tested its plans by selling on eBay

Live Current owns shopping sites like Perfume.com, and the plan is to integrate our offering so sellers can sell directly to buyers.

They also own Cricket.com, which has a huge opportunity in front of it.

During the last Australia-India match, the site had well over 30,000 visitors in a day, and that was with nothing on the website.

It is a public company with a start up mindset, with the benefit of already having heavily trafficked websites and millions in revenue.

'Buy your Porsches'

It was just over a year ago that I wrote my first BBC Viewpoint explaining why I moved to the Valley.

My experience has shown that the beliefs I had were mostly correct.

Our network helped us tremendously, the co-operation has been fantastic and even I've been surprised by the speed with which things have happened.

As we left the Y Combinator building after telling Paul Graham (the investor who brought us to the Valley) about the deal, his parting words were, "Go buy your Porsches".

Given the struggles that we've been through, we realise we are insanely privileged to have sold a company for several million.

Now we're looking forward to building something much bigger.