Sramana Mitra: What did you do after you sold?
Chris Miglino: I went back to trading again. I updated the algorithms and started trading again. I took one of the top sales people at the company that we had sold and we started Social Reality together. We started Social Reality under the premise of selling ads for, what at that time was called, causes on Facebook.
It was a very large Facebook application. It was owned by a guy by the name of Joe Green. It was a partnership between Joe and Sean Parker. We were selling all the ads inside this application. We were generating revenue for this app. We started selling ads into this app. We did that very successfully for a few years. The app had around 150 million active users.
As things happened, people were moving away from using apps on Facebook. The traffic started dying down. We created an extended publisher network of other applications – the Zyngas of the world. We became a sell-side partner. We were selling inventory for third parties into the different exchanges that existed at that time. It was early on in the programmatic space. We were selling to partners who wanted to buy inventory.
Some of them were just ad networks. Some of them were programmatic partners. That was the beginning of us developing all of our programmatic tools. We started writing a lot of code around programmatic advertising. That’s how Social Reality got started.
Sramana Mitra: Social Reality was funded with your proceeds from your prior exits or did you raise money for it?
Chris Miglino: It was bootstrapped again. We didn’t raise any capital. We were profitable from day one. We were able to start to build the business up. At some point, we decided that we wanted to take the company public on our own instead of trying to go out and raise venture capital.
Sramana Mitra: What year was this?
Chris Miglino: This was in 2011 to 2012.
Sramana Mitra: What was the metrics of the company at this point?
Chris Miglino: It was insignificant. We were probably doing around $2 million in sales. It was very little. We weren’t generating much revenue at all, but we didn’t want to go out to market and raise any venture capital money. We didn’t think it was a good fit. I hadn’t met a lot of venture capitalists along the journey, but I knew a lot of public market people because I had met them along the road of selling these two other public companies. I had a lot of relationships in that area. In 2012, we listed Social Reality on the OTC. We started trading. We did a small raise for around $400,000 so that we had enough shareholders to get listed on the exchange.
Sramana Mitra: How many shareholders did you raise the money from?
Chris Miglino: We had to raise from 40 different shareholders. It wasn’t much money.
Sramana Mitra: Was it a real public offering or did you put it on the public market and then you circled around some of your contacts and did a private kind of thing?
Chris Miglino: Yes, it was a private transaction essentially. Then we started trading on the OTC.
Sramana Mitra: What were the drivers of the growth?
Chris Miglino: It was just the amount of work that was getting put on programmatic. All the tides were rising in the space at that time. Everybody wanted to do business in programmatic. We were front and center on the programmatic side of the world, both on the sell and buy side. The buy side meant building tools that help buyers that are trying to reach certain types of demographics of data and things of that sort. The sell side meant helping publishers optimize and create tools that are valuable for publishers.