Indeed, An Almost Entirely Bootstrapped Job Search Giant, Gets A Monster Exit | Hacker News Reader

Indeed, An Almost Entirely Bootstrapped Job Search Giant, Gets A Monster Exit

sfgate.com

83 pointsnabraham23 comments

Bootstrapping (adj): a self-sustaining process that proceeds without external help.

Not bootstrapping: $5M in VC.

There is no "partially bootstrapped," you either are or aren't. Can somebody update the headline?

"They had bootstrapped the company, launched the service, and were well on their way. They didn't need our money. But eventually we convinced them to take it," USV's Fred Wilson writes.

Looks like the headline is based on this quote. Still doesn't make them bootstrapped, but it does seem like the $5M was just a safety net, not a requirement.

I disagree. Take GitHub for example. They just raised $100M in VC. That doesn't take away from the fact that they bootstrapped from April 2008 until July 2012.

Not bootstrapping is taking early Angel/VC funding in order to run the company.

True. Indeed actually does fit the definition given above, since they did not require the VC money to start and run the company. Sometimes I post faster than I think.

Except Indeed got the VC infusion in 2005, and only after that did they start becoming a recognizable player in the industry (if my personal experience in the industry isn't enough of a source for this, see http://www.google.com/trends/?q=indeed.com&geo=usa&s...)

From Fred Wilson's blog announcing the partnership[1]:

To Paul and Rony’s credit, during that seven month courtship, they have built Indeed into the leader in the job search market. Their competitors will probably take exception to that comment, but our analysis of traffic, jobs indexed, and name recognition indicates that Indeed is the leader in pure job search.

They did not need the money to start and maintain the business. What their growth rate was before and after the investment is irrelevant; they were a sustainable business without the VC money. Sure, the infusion of money and intangibles gained from having Union Square Ventures as an investor helped propel their rise, and may well have been necessary to push it to a $1B valuation by today. However, it was not necessary for the business[2].

[1] http://avc.blogs.com/a_vc/2005/08/indeed.html

[2] Based on publicly-available information

> However, it was not necessary for the business

I don't think anyone is arguing that Indeed would still exist had the $5M not come around. The point is that the $5M helped Indeed purchase the traffic/partnerships necessary to make it the #1 job search site on the internet. And without that money, they couldn't have bought their way to their current size - and their current size is reasons 1, 2 and 3 they were acquired.

I believe eBay was a similar situation: they took ~$7mil venture money in 1997 but never actually needed it.

I believe the implication is that they didn't raise money as a startup, but only at the growth stage when they were well established.

Growth stage financing is significantly different from early stage/startup financing, hence it's worth differentiating a company that got to growth stage through bootstrapping rather than the traditional seed and VC stages of financing.

It seems like they listened to you:

  "Indeed, An Almost Entirely Bootstrapped Job Search Giant, Gets A Monster Exit"

Wow, great story! That said, I really wouldn't say that getting a $5 million round is bootstrapping..

Wow! Of all acquisitions to come out lately, this makes me most happy. Who needs seed money when you have the best product out there.

Congrats to Indeed and their whole team.

This is true but it also means you have to be prepared to finance yourself for quite some time. Not everyone can do that. Also, by the time these guys took money they did it to get experience, connections and sponsorship.

Looks like a major win for Fred Wilson. It is testament to the value he brings when a company doesn't need to raise money (and probably is not even looking) - but takes your money anyway.

The author doesn't know the price.

  The acquisition price wasn't announced but you can bet it was for close to, 
  if not more than, $1 billion

Ooh, let me put on my reporter hat: is there a publicly traded company involved? Yes? Then there should be copious disclosures getting made here. Let's see, bought out by Recruit, that should have made the papers today here...

http://headlines.yahoo.co.jp/hl?a=20120926-00000021-jij-int

This is a blurb about Recruit (a Japanese company) making the acquisition, sourced to a NYT filing with the SEC. The NYT is a shareholder.

That filing should be public. Sure enough:

http://www.sec.gov/Archives/edgar/data/71691/000119312512402...

On September 25, 2012, Indeed.com, a job listing aggregator, announced that it will be acquired by Recruit Co. Ltd. In connection with the transaction, The New York Times Company will sell all of its remaining interest in Indeed.com and expects to record an estimated after-tax gain of approximately $100 million in the fourth quarter of 2012.

Now let's play "Guess what percentage the NYT owned." My guess is "below 10%", on the basis that a) this makes sense for a three-way Series A round (Crunchbase) and b) I have the vague impression that if they owned more than ~10% that would be in their Annual Report next to the discussion of their other joint ventures and investments where they own e.g. 17.5% of a sports company. Indeed.com is mentioned in no annual report of the Times since 2005, and has also failed to appear in any SEC filing except when they liquidated a "minor portion" of their stake for $5.9 million back in 2011, so I'm assuming they've got a substantial stake but not enough to trigger reporting requirements.

Quick math suggests, yep, a billion bucks at the low end.

Excellent due diligence. If you just take the revenues and expenses and project them out a bit it's not hard to see $1B in value.

This is some really sloppy headline-writing right here. Not only is the company not bootstrapped, but in the context of job search, it seems to imply that Monster (the job listing website) was a party to the deal.

Agreed - I thought that Monster was the acquirer or somehow Monster was involved.

Since when does taking $5M in VC mean bootstrapped? Well, judging from the comments, it seems that many perceive bootstrapping only applies to the early stages of the company. But I find that hard to stomach as someone who is also bootstrapping a company. When you bootstrap, you use your own revenues to finance growth. Getting investors is an alternative to that strategy. I don't see how you can both bootstrap AND have investors.

Looking at it differently, maybe they didn't need the capital, but they took it. You don't just accidentally get $5M from Union Square... term sheets happen. Lawyers are involved. Cap tables are adjusted. That doesn't happen when you bootstrap. It happens when you use other people's money to finance growth. AKA not bootstrapping.

That being said, it seems they did this particularly intelligently and Union Square was a fabulous choice for everyone involved.

Indeed is one of my business' main revenue streams, so I was relieved to see that they'll be kept as a wholly owned subsidiary. The rumor last night was that LinkedIn was going to buy Indeed, and that scared the crap out of me.

Having used Indeed during tough times I am happy for their success. It's a great search engine and without it I'm certain that my job-searching productivity would not have been as high as it was back when I was looking - which is crucial when trying to pump out as many (good quality) applications as you can to increase your chances of an interview.

I love their product and it's still the first site I visit when I'm curious about what's available in different areas. Congrats to the team!

The title is still misleading. Upon reading it, I was wondering why on Earth the SF Gate was writing about the value of Twitter's web UI toolkit...

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