When entrepreneurs sell their company, it is not uncommon for them to continue as employees, either because it is part of the deal to ensure a smooth transition or they are a valuable asset the new owners want to retain.
One of the most difficult challenges for entrepreneurs who sell is to know when the time comes to move on. While they no longer own the company, they can still feel a sense of ownership, having built the company and hired many of its employees.
Given this, it has been interesting to watch the trials and tribulations of Michael Arrington, who started TechCrunch, the world’s leading technology blog, in 2005.
In the process, Mr. Arrington morphed from blogger into kingmaker as TechCrunch’s popularity gave it the power to make or break startups looking to capture the spotlight.
It made Mr. Arrington a key player in Silicon Valley and on the technology landscape.
In a surprising move, TechCrunch was sold to AOL Inc. last year for a reported $25-million. Mr. Arrington carried on as editor-in-chief, and TechCrunch rumbled along with assurances from AOL that it would have editorial independence.
The AOL-Arrington marriage, however, hit a bump in the road a few months ago, when Mr. Arrington decided he wanted to start a venture capital fund called CrunchFund that could potentially invest in many of the startups that TechCrunch covered.
Rather than telling Mr. Arrington the idea was riddled with conflicts of interest, AOL agreed to invest $8-million in CrunchFund.
That’s when the proverbial crap hit the fan.
It was one thing that Mr. Arrington was making personal investments in startups (something that was disclosed if TechCrunch wrote about them) but it struck many people as another thing for CrunchFund to be investing in companies covered by TechCrunch.
Facing a blast of criticism for letting Mr. Arrington start CrunchFund and still oversee TechCrunch, AOL decided that he could continue to write for TechCrunch but would have to do it for free. Needless to say, this did little to appease AOL’s critics.
In what has become a soap opera, Mr. Arrington now claims AOL has reneged on its promise to give TechCrunch editorial independence. He suggested that AOL either reverse this position or sell TechCrunch back to its investors.
If this story sounds complicated, it is because it is complicated, mostly because Mr. Arrington wants to eat his cake and have it, too. He wants to be a venture capitalist but also an editor, writer, conference organizer and startup guru.
Unfortunately, it is difficult to have it all – even if you’re Michael Arrington.
In an ideal world, Mr. Arrington should have walked away from TechCrunch a few months ago if he was really serious about CrunchFund. While it is difficult to leave your baby behind, it is difficult to move forward if you’re stuck in the past.
Sure, Mr. Arrington is a huge part of the TechCrunch brand, and it is entirely possible that TechCrunch’s popularity could be hurt now that Mr. Arrington has reportedly been terminated by AOL.
The reality, however, is that once you sell your company, it is only a matter of time before you have to move on to your next stop on your entrepreneurial journey – whether it’s a beach in the Bahamas, a new business or a new job.
Mr. Arrington has had an incredible six-year run at TechCrunch but now that is owned by AOL, it is time for him to move forward without TechCrunch by his side.
Special to The Globe and Mail
Mark Evans is the principal with ME Consulting, a communications and marketing strategic consultancy that works with startups and fast-growing companies to create compelling and effective messaging to drive their sales and marketing activities. Mark has worked with four startups – Blanketware, b5Media, PlanetEye and Sysomos. He was a technology reporter for more than a decade with The Globe and Mail, Bloomberg News and the Financial Post. Mark is also one of the co-organizers of the mesh, meshmarketing and meshwest conferences.
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