E-mail
del.icio.us
Technorati
Digg
Sometimes, the best path to growth for startups is skipping venture capital altogether and selling out to a larger company. Userplane's founders saw the wisdom in this path and said today that they had sold to AOL for an undisclosed amount.
The instant messaging startup will be integrated into AOL's AIM platform and likely be used to expedite the New York company's social networking aspirations. AOL needs all the help it can get and Userplane should help it maintain its also-ran status on the web.
For Userplane, it's a great exit. They must have realized that their technology, while innovative, was not something on which a self-sustaining and fast-growing company could be built upon. And rather than pretend it was something that it wasn't by raising venture capital and being forced to build into something it couldn't become, the Userplane founders decided to take a payout and integrate the technology into a larger distribution platform. Smart move.
If only more Internet startups were as level-headed.
For more on Userplane's sale, see:
Jeff Clavier
ZDNet
Tags: userplane, vc, venture capital.
I would have a slightly different analysis: Userplane actually had the opportunity to raise financing from a great firm that would have helped the company to scale to the next level - both in footprint and revenue.
However the AOL offer came at a point in the company's life where the founders were getting all (OK almost all :-) the consideration in reward for the 5 years they have spent building the business, and it became a no-brainer given the economics (that we won't disclose).