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Hi, I'm Erica, and I'm the person that is mentioned in the OP. (Imagine my surprise to click through a link on the front page of HN and find out it was about me

Hi, I'm Erica, and I'm the person that is mentioned in the OP. (Imagine my surprise to click through a link on the front page of HN and find out it was about me! That was quite a jolt.) Anyway, I wanted to say: $1.1 million is life-changing, especially when it's for a company you started at age 20 and never expected to make more than a couple hundred dollars a month on. I didn't take on any investors for that business, and I found the buyer and did the sale. Running (and later, selling) that business solidified my expertise not only in the tech area, but also in learning how to acquire and keep customers. I wouldn't trade that experience for anything. The payday was a nice bonus. And, I have to say, in an era where tech companies IPO and then tank, is it not refreshing to read about a bootstrapped company built by a sole founder who then sold it for 7 figures? I know I love those stories. And, even in the Valley, they're a lot rarer than you think.

richardjordan 14y ago
Congrats. That's awesome. Particularly at that stage in your life - I bet it's hugely life changing. Would never do ANYTHING to discourage a young entrepreneur. I hope you go on to more, equally interesting, things. I got a smallish exit a few years ago now, similar sort of range, did much worse with it. Unfortunately we took our $$ mostly in stock and that was depressing - seeing other companies selling for much more while our tech languished ignored in our acquirer as it tanked and our stock became worthless :-/ I think that your example is great, I just disagree with the premise of the article that being broke is "a founder's greatest asset".
jpdoctor 14y ago
> I wanted to say: $1.1 million is life-changing first: congrats. I'm curious: How much of the $1.1 did you manage to keep (taxes etc.) BTW It might be a good entry in your blog on how to set up a biz for such events.
- ericabiz 14y ago
  Hi JP: I lost about a third to taxes (I should have moved to Texas sooner! Ah, well, I'm here in Austin now and loving it.) Another $125,000 or so to debt (it was an asset sale and the business was holding some debt on its books.) And $74,000 to a stupid mistake in the contract--should probably write out the details on my blog so no one gets stuck in that particular quagmire. I owned 91.5% of the company, with the other 8.5% owned by two employees, who also got paid their shares out of the $1.1 million sale. I also did something risky that, looking back, probably wasn't the smartest idea: I financed $999,000 to the buyer at 6% interest, who then paid it back over 3 years. He did pay it all back, which was awesome, but there were definitely some heart-stopping moments in there. I gained back a lot of what I lost due to the interest payments. But I would never sell a business in that way again--it's just too risky. Hope this helps. I do my best to be an open book. I totally agree on writing out the blog post, too. I'm running another startup now, so my time is limited, but this is still important stuff to so many entrepreneurs. tl;dr: Enough to not have to work for 4 years, travel a lot, and to put a down payment on a house here in Austin. :)
  - tisme 14y ago
    That's an earn-out, not a sale!
    - ericabiz 14y ago
      Unequivocally NO, it was not an earn-out. The sale price was pre-determined and was not based on how much the company earned in the future. The monthly payments and interest rate were also fixed.
  - jpdoctor 14y ago
    Very interesting details! Thanks again.
  - bravoyankee 14y ago
    That sounds like a big homerun Erica. Good for you!
- deleted 14y ago
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richardjordan 14y ago

Congrats. That's awesome. Particularly at that stage in your life - I bet it's hugely life changing. Would never do ANYTHING to discourage a young entrepreneur. I hope you go on to more, equally interesting, things. I got a smallish exit a few years ago now, similar sort of range, did much worse with it. Unfortunately we took our $$ mostly in stock and that was depressing - seeing other companies selling for much more while our tech languished ignored in our acquirer as it tanked and our stock became worthless :-/ I think that your example is great, I just disagree with the premise of the article that being broke is "a founder's greatest asset".

jpdoctor 14y ago

> I wanted to say: $1.1 million is life-changing first: congrats. I'm curious: How much of the $1.1 did you manage to keep (taxes etc.) BTW It might be a good entry in your blog on how to set up a biz for such events.

ericabiz 14y ago
Hi JP: I lost about a third to taxes (I should have moved to Texas sooner! Ah, well, I'm here in Austin now and loving it.) Another $125,000 or so to debt (it was an asset sale and the business was holding some debt on its books.) And $74,000 to a stupid mistake in the contract--should probably write out the details on my blog so no one gets stuck in that particular quagmire. I owned 91.5% of the company, with the other 8.5% owned by two employees, who also got paid their shares out of the $1.1 million sale. I also did something risky that, looking back, probably wasn't the smartest idea: I financed $999,000 to the buyer at 6% interest, who then paid it back over 3 years. He did pay it all back, which was awesome, but there were definitely some heart-stopping moments in there. I gained back a lot of what I lost due to the interest payments. But I would never sell a business in that way again--it's just too risky. Hope this helps. I do my best to be an open book. I totally agree on writing out the blog post, too. I'm running another startup now, so my time is limited, but this is still important stuff to so many entrepreneurs. tl;dr: Enough to not have to work for 4 years, travel a lot, and to put a down payment on a house here in Austin. :)
- tisme 14y ago
  That's an earn-out, not a sale!
  - ericabiz 14y ago
    Unequivocally NO, it was not an earn-out. The sale price was pre-determined and was not based on how much the company earned in the future. The monthly payments and interest rate were also fixed.
- jpdoctor 14y ago
  Very interesting details! Thanks again.
- bravoyankee 14y ago
  That sounds like a big homerun Erica. Good for you!
deleted 14y ago
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