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Bootstrapping to Exit: Imagine Easy Solutions CEO Neal Taparia (Part 6)

Posted on Saturday, Apr 25th 2020

Neal Taparia: Then we acquired the next biggest site in the space which was called CitationMachine. Later on, we acquired the biggest international site in UK and Australia following that same playbook of building relationships to eventually lead to an acquisition.

By 2016, we were reaching 30 million students across the globe, primarily in Western-educated countries. We had a very strong high-margin business that was driven by ad revenue and subscription revenue. We also had this side business where we were selling to institutions.

By 2016, that institutional business was doing a few million in revenue. That business was losing a lot of money as well. Our success came from our consumer business.

Sramana Mitra: From the advertising model.

Neal Taparia: From advertising and direct-to-consumer model.

Sramana Mitra: How did the acquisition with Chegg happen?

Neal Taparia: We had known the guys at Chegg for a while. We decided to go through a formal investment banking process to make sure that we could maximize the value for the company.

Chegg was a natural fit for us. They showed that they would be the best fit for us. Darsh and I felt very comfortable marrying Chegg effectively in our sales process. It was a total whirlwind. We cared more about cash accounting whereas when you go to sell your own company, accrual accounting is very important as well as reviewed financials. That list goes on and on.

It was a total whirlwind going through the due diligence process and getting everything together. Prior to that, it was a very emotional process because all these potential buyers are happy to critique your business. Any entrepreneur will know your business is your baby. You have no idea where the process is going to end and how much your company is going to be valued.

One of the biggest lessons I learned is, you are really worth only as much as someone is willing to pay for you. You could do discounted cash flow analysis or comparative transaction analysis. That will give you an idea. If no one is coming to the table to give you an offer, then you don’t have a business to sell right there.

Sramana Mitra: What kind of valuation did you get?

Neal Taparia: We were able to sell the business for $60 million to Chegg. 

Sramana Mitra: It was completely bootstrapped right?

Neal Taparia: Yes.

Sramana Mitra: Great, it sounds like a great outcome. 

Neal Taparia: We were very lucky to get to that point. We were pretty blessed to have that kind of trajectory. There’s a lot of serendipity too since we had started it at a young age. It worked out well for us. We considered taking on VC financing early on.

Sramana Mitra: You did well not to take VC money. A lot of companies ruin themselves by taking VC money and not being able to scale.

Neal Taparia: Exactly. 

Sramana Mitra: Wonderful. Thank you for your time.

This segment is part 6 in the series : Bootstrapping to Exit: Imagine Easy Solutions CEO Neal Taparia
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