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5 Lessons from Growing a Startup to a 9-Figure Exit in 2 Years

August 14, 2020 |  

About this episode


David Yaffe was working at Google when he spotted an opportunity to connect advertisers with smaller publishers competing for online advertising dollars.

He and two friends started Arbor, raised more than $2 million in seed capital and built a prototype. Two years later, Arbor had grown to 25 employees when LiveRamp acquired them for more than $100 million.

That’s not a typo.

Yaffe sold a two-year-old company with a couple dozen employees for nine figures. Not surprisingly, there are lots of lessons to learn from Yaffe in this episode.

One of the best insights comes in analyzing how Yaffe dealt with LiveRamp’s original offer, which was around one-tenth of their find acquisition price. Rather than dismiss their initial offer or counter, Yaffe knew they were too far apart on valuation, so suggested to LiveRamp that instead of merging, they partner.

The partnership was a success and only served to heighten LiveRamp’s desire to acquire Arbor. Months into the partnership, they upped their offer. Then a few months after that, they jacked it up again. Finally, having been partnered for a year, they made Yaffe an offer which was so good, he and his partners couldn’t refuse.

In addition to the “let’s just be friends” counter, Yaffe will also teach you:

  • Why you should avoid splitting equity with the founding team equally
  • The secret to building a two-sided market
  • When it’s okay to fib about your progress
  • How to retain key employees who are susceptible to being poached by competitors
  • An alternative to a performance-based earn-out

LiveRamp was keen to get their hands on Arbor because they had built a proprietary platform that would have been difficult for LiveRamp to replicate, no matter how many engineers they hired. How well differentiated is your product or service? Having a unique position in the market — we call it Monopoly Control — is our focus during module 6 of The Value Builder System™. Complete module 1 for free by getting your Value Builder Score.

Check out our article on How To Keep Employees Happy.

Check out our full M&A Glossary

About Our Guest

David Yaffe is a co-founder of Estuary which builds technology to help companies work seamlessly with data using both real-time and batch paradigms. He previously was the COO of LiveRamp and the co-founder / CEO of Arbor which was sold to LiveRamp in 2016. Prior to that, he led product and services for Invite Media (acquired by Google) and product for Doubleclick Bid Manager after the acquisition. You can reach Dave at [email protected] or Linkedin.

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