Recently I had the pleasure of hearing Milt Alpern speak about his business experience at Startup Grind Charleston. The session was hosted right here at Launch Pad. Milt shared a wealth of valuable insights, but I wanted to distill what jumped out to me personally.
Milt drove home the idea of the market being unpredictable when he spoke about his time at Eprise Corporation. Eprise was offered $500 million to be acquired and rejected that offer. They went on to achieve a valuation of $750 million. However, they went public near the “.com bomb” and saw their valuation shrink to significantly during that event. However, Eprise managed to successfully exit for $200 million.
Jumping ahead in Milt’s business career, he talked about wanting to get back into a private company after helping take several ventures to the public market. He landed at ITA Software, a company that provided airfare pricing and availability. ITA Software had an unheard of first round of funding come in, to the tune of $100 million. During December of 2009 Google expressed interested in ITA. The purchase agreement took awhile to finalize but in April of 2011 everyone at ITA became a “Googler”, including Milt.
Milt left Google behind to become the CFO of Charleston based Benefitfocus. He was brought in to take the company public within 12-18 months. The first day that Benefitfocus was public, their stock price doubled. Now that is powerful market entry. Milt certainly has accomplished a lot, but his takeaways didn’t stop there.
Don’t run a company strictly to be acquired. The best acquirer comes out of the blue.
– Milt Alpern
During the Q&A portion of the event Milt was asked how do you know when it is time to hire a CFO. Milt mentioned that a startup team could get beyond a Series A round without having a CFO in place. He also mentioned that once your venture makes it to the B round of funding things get more serious and that venture investors want a CFO put in place. He also mentioned that if your venture is running lean to hold off on a hiring a CFO too early because, “anyone with a “C” in front of their title will not be cheap”.
I want to get more involved. I’m not ready to punch out. I just want to stay in the game.
– Milt Alpern
Since Milt has so much experience helping take companies public, he shared some surprising insights about private companies. He mentioned two specific reasons to keep your company private. The first reason was that public companies are expensive to run and spend between 33% – 40% of time doing a variety of paperwork, audits and communication to shareholders. Simply put, you have to focus a lot of time and resources just to staying compliant. The second reason Milt mentioned for staying private was not having to worry about every small detail and action being available publicly. Although to be clear, Milt wasn’t speaking as if there was something to hide. His context was simply that you don’t have to worry that the masses are misinterpreting your actions or communication.
I’m looking forward to hearing and seeing how Milt engages with the Charleston startup community with his business savvy.