The Day That Made Millionaires
The $2.5 billion sale of ExactTarget to Salesforce transformed the local tech landscape. And according to the people who lived it, the story of how it went down is as rich as they all turned out to be.
On June 4, 2013, most ExactTarget employees and investors across Indianapolis began their day as they always did—sipping coffee, jogging, commuting downtown. Few of them knew that within hours, they would be celebrating the biggest financial windfall of their lives. Scott Dorsey, CEO and cofounder of the email- marketing company, had been hunkered down for days in a conference room in San Francisco with executives from the software giant Salesforce. There, along with a cabal of bankers, they were plotting a $2.5 billion merger and acquisition—almost $34 per share, up from $19 at ExactTarget’s IPO a year earlier. It would be the largest tech sale in Indianapolis history.
When reports of the deal hit the news that afternoon, some of them speculated that the top six executives and directors pocketed more than $93 million. But all told, the company that began in a small Greenfield office in 2000 had an army of local shareholders, many with modest, four-figure investments that would turn into millions. Smaller investors paid off car loans and mortgages. Larger ones built mansions and funded other up-and-coming startups. As many as 100 locals took home seven-figure gains that afternoon. Here, an oral history of the day that made millionaires.
Joanna Milliken, director of product management and the first employee of ExactTarget: “When I first started, I literally had to climb over boxes to get to this tiny room in Greenfield we were using as an office. I was definitely in the right place at the right time. Scott Dorsey always said from the beginning, ‘If we do good things, good things will happen.’”
Mike Irons, pathologist and one of ExactTarget’s largest individual investors: “I was one of their first series A investors. They had done the friends-and-family round before that, and one of my brothers had contributed. It was in 2001, right after the dot-com bust, so it was hard to find money. I do well after we have crashes like that. They had a good business plan and a good price. Six months later, they did their second series, so I doubled down. They were starting to make revenue, and people were using their services.”
Chris Baggott, cofounder of ExactTarget: “We actually had an acquisition offer that was very lucrative about a week after we took our first venture-capital money in 2004. As founders, we joked that we all would have made more money had we not taken the VC money and instead taken the acquisition offer right there and then.”
Scott McCorkle, president of technology and strategy at ExactTarget: “We had been publicly traded for five quarters at that point in time, and we were doing well, growing fast.”
Joanna Milliken: “We knew that we were the dog that caught the car. Our charts did nothing but go up and to the right. That’s why I dyed my hair early, because we worked our asses off. We knew that something good was coming.”
On April 22, 2013, Dorsey and Marc Benioff, CEO of Salesforce, met to discuss a “strategic alliance,” according to an SEC filing. A few days later, Benioff contacted Dorsey and informed him Salesforce would be sending him written notice of plans to acquire ExactTarget. The first offer came in at $26 per share. ExactTarget’s leaders discussed the proposal, all while entertaining offers from three other unidentified companies. By May 11, Dorsey told Benioff the price wasn’t good enough. The companies went back to the drawing board. On May 24, Benioff upped the amount to $30 a share.
The next day, a bidding war was underway. One of ExactTarget’s other suitors, identified in SEC filings only as “party B,” boosted its offer to $32 a share. But Benioff refused to give up. Later that day, he came back with an even better offer: $33.75 a share. On May 28, 29, and June 3, 2013, top brass from ExactTarget and Salesforce met in Denver and San Francisco to see what was possible.
Scott Dorsey, chief executive officer at ExactTarget: “The night before the transaction was announced was a very late one—lots of final negotiations with Marc Benioff and the Salesforce team.”
Scott McCorkle: “There’s a saying bankers tell you when you’re doing a sale like this: ‘You eat when you can eat, you go to the bathroom when you can go to the bathroom, and catch a nap when you can.’ Because you don’t know when you are going to be able to do any of those things. It’s wall-to-wall meetings.”
Tim Kopp, chief marketing officer at ExactTarget: “I remember getting up very, very early on June 3—3 a.m. or 4 a.m. I stopped to get my team breakfast somewhere on the way downtown. Then we gathered in this sort of war room where we were figuring out what would unfold minute by minute, coordinating time zones with the West Coast. I remember just being really heads-down, and having to be incredibly precise in our communication.”
Scott Dorsey: “On June 4, I met with the Salesforce team at 4 a.m. California time, and we did an hour of prep. Then we did an earnings call at 5 a.m. to announce the acquisition to Wall Street. It was very exciting. I actually called Mayor Ballard and Governor Pence in advance to let them know, because I really wanted them to hear it from me. I was so confident in the city and state.”
Joel Hubartt, director of user experience at ExactTarget: “I was heading into work and I stopped to get gas at the Marathon in Noblesville on 10th and Maple. I checked my phone, and I was getting lots of text messages from people on my team. Immediately, I went into email and read the note from Scott Dorsey explaining the situation. The general tone was optimistic and exciting, but it was pretty brief. It was accompanied by a calendar invite for a full-staff company meeting.”
Steve Fouty, part-time controller at ExactTarget: “I was sitting at Mo’Joes with a couple startup guys, answering questions and giving them advice. Then the email came in. And I just dropped everything I was doing. I told them, ‘I can’t think right now. I have to get to the office.’”
Mike Irons: “I was working at a hospital when one of the board members sent the email to me. Although it wasn’t common knowledge, I knew people were looking at them.”
Chris Baggott: “We had gone public not too long before that, and for me, that was the really exciting thing. A lot of the founders didn’t care as much about being acquired. From a highlight-of-our-lives standpoint, I have a more detailed memory of going public. Ringing the bell as an entrepreneur—that’s the peak, right?”
Tim Kopp: “I don’t know what the limit is on the amount of texts you can receive on your phone in a two-minute period, but it was probably pushing that. My phone absolutely blew up. You don’t know how people are going to perceive something like this. But the feedback was overwhelmingly positive.
Joel Hubartt: “It was definitely not a surprise to me. When you’re an emerging tech company growing that quickly, those things tend to happen. I don’t know that my focus was immediately on the stock price. My first reaction to hearing ‘Salesforce’ was, Well, that’s good. It could have been somebody else. My initial concern was, How is this going to change my day-to-day? It didn’t.”
Tim Kopp: “When it really hit us was when we turned on CNBC, and the headline ‘Salesforce to buy ExactTarget’ was on the screen. Mad Money host Jim Cramer was talking about it. When you work on things for years in a project-like way, it’s easy to forget what’s really happening. The best analogy I can come up with is when your son or daughter gets married. You have this moment where you’re really sad that they are moving on, but really happy for what the next chapter looks like. I remember being far more emotional about the whole thing than I expected. So once we got through all the work and the adrenaline wore off, I just remember being … tired.”
Mike Irons: “As we had taken on more investment money, I got diluted. Still, I had an awful lot of shares compared with everybody else here when it finally ended. Of course, the big boys [out-of-state venture-capital firms] got hundreds of millions of dollars.”
Chris Baggott: “We had a lot of investors. If you put $5,000 into ExactTarget in our very first round when we raised $200,000, those $5,000 checks became $1.5 million if you had never sold any shares. And most of those people never sold their shares. I live in a normal neighborhood in Greenfield with a couple of cul-de-sacs, and I literally went door to door to get people to invest $5,000 in ExactTarget. On the Google Map of my neighborhood, you’ll see, like, seven swimming pools. Every one of the swimming pools corresponds to an ExactTarget investor. And it just coincidentally works out this way, but no one else has swimming pools.”
Scott Dorsey: “Hopefully, it gave our employees and investors a lot of financial freedom. I’ve heard wonderful stories about people being able to retire student debt or buy a first house. It makes me feel great about what we accomplished.”
Steve Fouty: “Because I had gone part-time three years before, I had sold some shares. I did not become independently wealthy. But I was able to pay off my car, pay my house off, and be debt-free. Pretty amazing. I would say life-changing for sure. I wasn’t part of that executive team that got the millions, but I made six figures.”
Tim Kopp: “What has been neat about all this is I don’t think anybody has gone off to retirement or is sitting on a beach somewhere. Does the money give you options? Yes. But I’m still doing exactly what I want to be doing. We’re all thinking about how to help the next generation of entrepreneurs. So it has changed us, and it hasn’t changed us.”
Mike Irons: “It gives me an opportunity to invest in a lot of other companies in the area. I wasn’t really in it for the money. I enjoyed the first five years most. I would go to their Christmas parties and their summer picnics. They usually asked me to bring the beer and the wine. At one time, I knew everybody there.”
Joanna Milliken: “I left in January 2014. For many of us, the sale changed our lives. There were a few years before that when I was living month to month, and I was a single mom. So it’s nice to be able to take that deep breath. But sometimes I think, Wouldn’t it be cool to do that again? Join a little $3 million or $5 million company and watch it grow. People at my level did well, but we’re not building mansions. A lot of my Facebook friends were building new decks, finally remodeling the bathroom. All of these people were like, ‘Thanks, ExactTarget!’”
Chris Baggott: “We always joke about us being Gettysburg—a city in an accidental place where the battle was fought that made the Civil War. No one could have predicted 10 years ago that the battle for Internet-marketing dominance would take place on the streets of Indianapolis.”
Mike Irons: “Honestly, I miss it. Salesforce is still downtown, but it’s not the same company without Dorsey there. There will never ever be another ExactTarget in this city.”
Joanna Milliken: “There aren’t a lot of women in the venture-capital scene here in Indianapolis. Since the ExactTarget sale, I’ve invested anywhere from $10,000 to $50,000 in five startup companies. Some people would say that I shouldn’t have. One, Milktooth, is a restaurant. Some friends must think, You’re insane. Just enjoy the money. And I say, ‘I don’t care. This is what it’s about.’ I made sure I had plenty in my 401k. I paid down our house. I have no debt. So that’s what the rest of it is for. I may lose my shirt on a few of the investments. But so far, I’m doing pretty well. Milktooth is one of the top restaurants in the country. I know how to pick ’em.”