In 2011 we had built the Next Big Sound team to 9 people, 2 of 3 major labels signed to annual deals, a partnership with Billboard to license two of our charts and a quickly growing name in the music tech world. That’s when I got a call from a large entertainment company in Los Angeles who was “on the 80 yard line with a competitor of Next Big Sound” but wanted to explore what an acquisition of NBS might look like.
Leaning heavily on the counsel of Jason Mendelson I flew to LA the next day for a one-day trip of solid meetings with their executives and corporate development team. Jason suggested that in parallel David, Samir and I should discuss what our number is. The number with which we would be excited to sell Next Big Sound. If the offer was lower, we would refuse, if it was higher, we would accept. When acquisition interest started heating up in 2015 I refused to run such an exercise, but that’s a story for another day.
The three of us went to dinner at the Boulder Chophouse. We ordered wine, nice steaks, plenty of appetizers, and talked about our business, our lives, our NBS ownership percentages, and what our “number” would be. What a surreal exercise! It really forces you to think through what you actually want in life and what’s most important to you. We were 24 at the time and had raised $860k. An NBS sale of $XXM+ would make us all multi-millionaires and we could take some time off and quickly jump into our next venture. Less than that would be awesome but we really didn’t want to sell the company as we were just getting started and finally gaining real momentum that had been elusive for so long.
The offer came in lower than our number and I politely, but promptly, refused. This was absolutely the right decision for us, and the right decision for the business. We went on to raise a $6.5M Series A later that year at a post-money valuation that was higher than our “number.”