Three weeks before he sold his website for a reported $20 million, Product Hunt founder Ryan Hoover told Business Insider he was taking the “never say never” approach when it came to a sale.
“Founders will always say, ‘We will never sell’ – but it’s a very contextual question,” Hoover told Business Insider’s Lara O’Reilly on November 10.
“There’s a number of things to think about, like times when selling to a certain acquirer can accelerate or de-risk. It’s one of those things that any founder should evaluate but not get distracted by. Building a company with the intention to sell is often a bad idea.”
Hoover’s response was a harbinger.
At the time, he was already in talks about selling his three-year-old site, which had become the go-to destination for tech makers to launch their products and for Silicon Valley venture capitalists to spot new ideas. On Thursday, Hoover announced he had sold his company to AngelList, a site used by early-stage companies to attract talent and financing. Recode reported that the deal was valued at $20 million.
The company had previously raised about $7 million in venture funding from Andreessen Horowitz and a smattering of seed investors, including AngelList CEO Naval Ravikant. The two had kept in close contact as Product Hunt grew, but the talks changed in tenor in the past few months.
“This was somewhere around two to three months ago when some of those conversations talked about the future, and what we’re looking towards,” Hoover said. “When we think about what makes sense in long term, it helps accelerate those goals.”
As Hoover forecast in his remarks to Business Insider in early November, he had started looking for acquirers who could “accelerate” or “de-risk” the business. Product Hunt had focused only on building its community of makers for the past three years and was exploring how to create a revenue source for the company. The only trickle of money into the company had been through affiliate links, but that wasn’t really seen as revenue because it was so small, Hoover said.
Faced with building products from scratch to make money, Hoover realized the company would end up going head-to-head with AngelList to build things like job boards to connect creators and marketers with startups. Instead of going the DIY route, Hoover came to realize it would make more sense to connect the companies and accelerate their plans.
For sure, the acquisition relieves some of the pressure from Product Hunt to become a moneymaker, and in the short term, Hoover said, the company gets to remain focused on expanding its network.
“AngelList is not buying Product Hunt to start monetizing,” Hoover said. “It’s to help build the community.”
To commemorate the acquisition, the company is inviting that community to a party in January to celebrate the occasion.
Signing the paperwork wasn’t as ceremonious as he had expected. “The lawyers sent a Docusign over and it had a bunch of signatures. You click ‘Sign, Sign, Sign,'” Hoover said with a laugh about the experience. Instead, the real fun and part of the early magic of Product Hunt will be when the followers of the site get to celebrate together.