Patience is a Virtue!

My grandmother used to tell me, my brother and sister that “patience is a virtue.” Of course, she used to say it while we were playing gin rummy and she was taking too long to drop a card. But her point was not lost on the Hornik siblings. My grandmother was not willing to rush something for the sake of moving on. She believed in being thoughtful and deliberate and making the best possible choices no matter how long it took. Thanks for the lesson, grandma! Duly noted.
Today we announced that Rakuten has entered into an agreement to purchase Ebates for a billion dollars. I have been extolling the virtues of Ebates for the last 14 years, since August first invested in the company and I began attending board meetings. Ebates is an amazing company built by amazing people and I could not be happier to have been along for this decade and a half long ride. It was worth every minute.
Ebates is a platform for retailers to acquire customers through cash rebates and for consumers to save money on purchases from some of their favorite online stores. Ebates is a win win. And, as a result, it has been growing steadily for the last 16 years. We first invested in Ebates in March of 2000 (along side Canaan Partners). By that time, Ebates’ two founders had already been hard at work building the company for a couple of years (Ebates was initially incubated at Foundation Capital). Ebates’ founders, Paul Wasserman and Alessandro Isolani, were attorneys who decided to leave the wonderful world of criminal law to start a dot com. There was a lot of that going on at the time. The only difference between most of those companies and Ebates is that when the bubble burst, Paul and Sandro had the good sense to hunker down and focus on not running out of money. Which is precisely what they did. They built a cash-positive business that continued to grow and provide real value to their customers.
Over the better part of the 2000’s, Ebates continued to grow its footprint. An increasingly large number of consumers were collecting cash back from an ever-larger range of online stores. What’s more, not only did Ebates hang onto the consumers it signed up in the early 2000’s, those consumers were spending more than ever before. With double digit millions in the bank and a decade of growth behind them, the founders decided to hand over the reigns of the company to an expert marketer.
We had the amazing good fortune to attract Kevin Johnson to the company in 2008. Having spent time as an executive the likes of Netcentives, Digital Impact and Acxiom, Kevin was the perfect guy to take the reigns. He focused the company on providing real, measurable value for e-commerce partners, which in turn created greater value for consumers, which in turn created greater value for e-commerce partners, which in turn … you get the point. Kevin also put his marketing hat on and built an acquisition machine that has driven massive growth for the company. Along the way, Kevin attracted one of the best teams we’ve had the opportunity to work with at August Capital.
In 2012, we decided to double down on the Ebates team. Ebates had a number of great acquisition opportunities before them and they decided to raise some additional capital to take advantage of their strong position in the market. Spearheaded by my partners Eric Carlborg and Tripp Jones, we led a late stage financing for the company (along side Canaan and Foundation again) to enable those acquisitions and drive growth, and in the process August became Ebates' largest shareholder. We were honored to lead that charge and emerged the largest shareholders in the company. Kevin proceeded to put that capital to good use, purchasing fatwallet, Extrabux, Pushpins, OneReceipt, AnyCoupons and BFAds, and launching Ebates Canada, Ebates China and Ebates Korea. And with each purchase and each launch, Ebates has become larger and more valuable. It has been an amazing journey to be a part of.
Great entrepreneurs have the ability to choose with whom they want to work. And each entrepreneur applies a different set of criteria when making that decision. I have always told entrepreneurs to choose wisely because taking an investment is a little bit like a marriage. That has never been clearer than with Ebates. This summer I celebrated my 20th wedding anniversary and my 14th Ebates anniversary. While Rakuten has whisked Ebates away from me, I am incredibly grateful for the time I have spent with Paul, Sandro, Kevin and the entire Ebates team. I’ll miss you guys. Congratulations!