Facebook founder Mark Zuckerberg managed to snare Parse
As Tikhon Bernstam tells it the process of selling the business he co-founded, Parse, to Facebook was “a complete disaster”.
It’s a disaster that ended well as Facebook ended up paying $US85 million ($103 million) last year for the cloud application platform which powers tens of thousand of apps.
But Bernstam told the Above All Human conference in Melbourne today the process was far from smooth as Parse’s founders were in the envious position of having multiple bidders for the business.
“The trouble is when you raise a Series A [funding round] you almost always give up control over a sale where your investor can veto it,” he says.
“An offer might be great for you and the company but it wont be what makes their portfolio.”
Bernstam says the sale was a “very contentious” process and “a very long struggle”.
He wanted to sell the business to Apple but says Facebook came out with a “much more compelling offer”.
Bernstam says he enjoyed working with Facebook’s founder Mark Zuckerberg.
“I am incredibly impressed by the way he is focused on the long-term vision rather than just hitting refresh on Google finance to see how the stock price is moving like some of his employees,” Bernstam says,
“He’s made some really audacious moves and really offered Parse a lot of autonomy. Now, Facebook is launching some of its new apps like slingshot on Parse.”
Since the sale, Bernstam has focused on his role as an angel investor and on Scribd, the business he co-founded in 2006, which he describes as “YouTube for documents”.
His advice to fellow entrepreneurs looking to sell or raise funds is to put a time limit on the deal.
“When there is no fear of missing out when investors don’t think the deal is going away there is no time pressure to invest,” he says.
“Fundraising when you have no traction and no real understanding of the real vision is a very common mistake.”
Bernstam says in selling Parse the founders emphasised this “deal has closed an hour ago”.
“This fear that the deal is going away and that it is a good deal, it will move much faster,” he says.