Cambridge technology company Grapeshot created 27 millionaires among staff and investors from inception in 2002 to last year’s sale to American corporation Oracle, founder John Snyder has revealed.
While Oracle has slammed the lid tight on the price it paid for Grapeshot, US sources say to start at more than $300m and head towards half a billion dollars before stopping to reflect.
As second-leading shareholder Snyder walked away with a tidy packet financially but the sale didn’t include retaining the founder’s talents, which gave him several months to reflect on what he had built and what the future held.
In stark contrast to the mountain of greenbacks Oracle laid on the table Snyder well recalls the time when he bootstrapped the business, which applies advanced keyword technology to the programmatic advertising market and the broader field of information retrieval.
In the early years he was regularly laying out £20k a month to meet wages and other commitments, bankrolling as well as building the fledgling venture.
Imagine his feelings when he and co-founder Martin Porter were invited to London to meet US internet entrepreneur and VC Reid Hoffman – inspiration behind LinkedIn – only to leave the office having spurned the offer of major investment that would have fast-tracked the growth of the young company.
Snyder told me: “Martin was co-founder and the massive brains behind Grapeshot. Reid really liked our company and our culture and was prepared to back his judgement with big money. This was very early Grapeshot – five or six people.
“Martin was very scared of the fireworks that might ensue from driving Grapeshot into the stars – a strategy that he felt was full of risks. I thought it could have been a great way to grow the company but we declined the investment offer and decided to grow our capital base much more slowly.
“In 2009 I said to Martin that I couldn’t keep bankrolling the business to the tune of £20k a month; even the payroll was down to me. I needed to hire more people quickly to take advantage of expansion opportunities. Then IQ Capital came onto the scene and we were able to grow at our own pace.”
Grapeshot set up a small office in New York, then Chicago and over the ensuing years the global roll-out became inexorable.
Oracle’s swoop last spring could not have been in greater contrast to Grapeshot’s humble beginnings – in Snyder’s attic. He did take an office in King’s Parade but that was so small, there was hardly room to accommodate a well-fed cat, let along swing one!
It was there that Reid Hoffman was initially introduced to the founders and immediately fell in love with Cambridge, Grapeshot and their respective cultures.
Fast forward to 2018 when Oracle came calling with a deal that literally changed Snyder’s lifestyle if not his life. He felt they were a great fit as the American company was entrepreneurial and immediately appreciated the energy and passion Grapeshot’s people had inculcated into the enterprise.
But in the final shakedown he was left with his windfall alongside his P45 and concedes that after so many years with Grapeshot he found the estrangement hard to come to terms with: “It doesn’t matter how much money you get, you are still left with a feeling of bereavement,” he says. “People congratulate you but you think; ‘hang about, I’ve lost my job. That feeling is now well behind me but one thing I will never forget is the amazing culture we engendered at Grapeshot.
“I didn’t architect that culture but when we were around 25 headcount we had an independent consultant come in and spend some time with us and he identified three stand-outs: 1 – Simplicity: The company was run in a straightforward manner with simple apps and so on; 2 – Transparency: We kept staff informed about our financial position and other key factors; and 3 – Our people: Our people were supremely talented, worked hard and there was mutual trust between staff and management.
“I would say these qualities would benefit any young company keen to scale; recreating the kind of intimacy found in a family. When things come together you get a tremendous surge of adrenaline. And the sky isn’t the limit – there is no limit to what you can achieve if you unleash the kind of culture we engendered within Grapeshot and continue with it as you grow. We carried our culture to New York, Chicago and elsewhere and it is a really great feeling when it all comes together for the company.”
Snyder believes that the climate for growing a world-class technology or life science business from Cambridge has never been better. He was star turn at a Cambridge event hosted by global VC Draper Esprit last week and CEO Simon Cook set out the backdrop to his firm’s view on the Cambridge tech scene.
Cook said after the event: “We've been investing in Cambridge-based entrepreneurs for the last 20 years – from companies like CSR to the next generation such as Fluidic Analytics, Evonetix and Ieso Digital Health.
“But what was most striking about the event was seeing a new level of ambition in the ecosystem; there's a new hunger to build businesses of significant scale. “It really takes a whole community to build an ecosystem that enables that- the entrepreneurs, the capital, those with the expertise, the people like John Snyder who have ‘been there, done it’, the engineering, sales and marketing know-how.
“It takes a lot, and it was wonderful to have so many people from each corner of the ecosystem joining together. It feels like Cambridge is at an inflexion point, and we're just excited to get stuck in and play our part.”
Snyder feels the same way. He said: “I agree with Simon – Cambridge has changed dramatically for the better. Cambridge is a world-class cluster and a very low risk environment in which to build a successful tech business.
“The city is on the world stage and there are lots of Cambridge companies making a significant impact globally. Sales of young companies to Google, Apple and Amazon are testimony to that. The physical infrastructure hasn’t kept pace but the talent pool locally has enabled our best cutting edge businesses to follow their visions. Just as people are important to a business, so headcount is important to produce tax and spend for the economy.” So what next for John Snyder? Having just returned from a spell of kite surfing in the Bahamas he has rekindled his love affair with Cambridge Angels, which he co-founded and hopes to invest in future Grapeshots.
He says the group has become a major force on the investment scene, injecting record sums into early-stage ventures, and had gone past the ‘turn up for dinner and hear a pitch’ early days to become a well-oiled, thoroughly pre-prepared and professional full-time organisation. The Snyders – John’s wife Canon Sarah Snyder works as a peace reconciliation adviser to the Archbishop of Canterbury, Justin Welby in a role once filled by Terry Waite – have bought a big house in Cambridge and are also looking to help renovate a castle in the north of England as a reconciliation centre.
Longer-term John wants to create a corporate training, meetings, family events and weddings venue at Rose Castle – again, a far cry from his old Cambridge attic. He says: “I am meeting a lot of Cambridge companies again and my passion is to kickstart the Rose Castle project and get it up and running as a thriving business – and maybe attract more than a few Cambridge companies there.”