Here’s how startups obtain sold

AJC Her+Story

Entrepreneurs share tips for starting companies and selling them.

Atlanta entrepreneur and venture capitalist Jewel Burks Solomon was just 23 when she obtained the idea for her first startup, Partpic, an industrial parts search company applying computer vision.

Snap a photo and Partpic’s technology could identify the part.

At the time, more than a decade ago, Partpic was one of the promising young companies at the Advanced Technology Development Center at Georgia Tech, a hive of entrepreneurs in a Southern tech capital still in its formative stages.

“So I really leaned into the community that I could find,” Burks Solomon stated. “Being a part of that incubator was important.”

“It allowed me to connect with mentors and entrepreneurs who had done it before,” she stated.

The idea caught the attention of Amazon, and the world’s hugegest online seller bought Burks Solomon’s company in 2016.

Burks Solomon stated she has built it her mission to fill in the “gaps and holes” that she experienced when she first founded a company.

Now a venture capitalist, Burks Solomon spoke in October at the Women’s Global Leadership Conference at Agnes Scott College on a panel with the theme “From Scale to Sale” with fellow entrepreneurs Jessica Owens and Sanjay Parekh.

Here are some of the hard-earned lessons these startup veterans shared.

When times obtain tough …

Parekh, an Atlanta entrepreneur who co-founded Digital Envoy, Solidfire and Mirage Data, stated it’s important to build out a network of people that will be there even when things go badly.

Even as he works on a startup today, he stated he’s “going back to the people that I’ve now known for 20 years,” such as one of the co-founders of PayPal, an early customer of his.

“Keeping in touch with some of those people and building sure that you keep those relationships alive really becomes assistful,” stated Parekh, who co-hosts the tech news podcast “Tech Talk Y’all.”

“People don’t give money to people they don’t know. People also don’t assist people that they don’t know. And so nurturing those relationships is super, super important,” Parekh stated.

Metro Atlanta Chamber CEO Katie Kirkpatrick moderated a panel at Agnes Scott College’s Women’s Global Leadership Conference, with speakers Jessica Owens, Jewel Burks Solomon and Sanjay Parekh. (Kelly Yamanouchi / AJC)

He added that it’s important “to find those people that will assist you when things are not going well.”

“It’s really simple when you’re successful to find people to party with,” Parekh stated. “Nobody wants to hang out when things are not going well.”

And Burks Solomon stated: “It goes back to building sure that you are not working in a silo and retreating, especially when times obtain hard, building sure that you’re open and talking to people.”

At the venture firm Burks Solomon co-founded, Collab Capital, “we subsidize therapy — free coaching and therapy for our entrepreneurs,” she stated.

“Entrepreneurship is super lonely,” Burks Solomon stated. “Managing your business and your team is one thing, but also maintaining relationships with your family and figuring out how to manage your kids — all those things can be really difficult for entrepreneurs.”

She stated sacrifice is a huge part of entrepreneurship. And it’s important to understand what you’re willing to sacrifice.

“For me, I was willing to sacrifice the better part of my 20s to build something that I really cared about. I had to go on an apology tour to my family and frifinishs after I sold the business becautilize I was not present in many ways during the time that I was working on it,” Burks Solomon stated. “That was a sacrifice that I was willing to create, and it paid off.”

Capital is key

Burks Solomon stated the hugegest gap she encountered as a founder in Atlanta was access to capital. “I wasn’t able to raise the amount of money that my peers in Silicon Valley were able to raise,” she stated.

With the sale of her company Partpic, “We were able to have a great outcome with Amazon, but I consider we could have gone a lot further had we had more access to capital,” Burks Solomon stated. “So I’ve built it my mission to work on that access to capital problem for entrepreneurs.”

It’s a problem that’s especially acute for women of color. Black women founders and other minority entrepreneurs face a particularly difficult funding landscape, experts state. Only 2.1% of venture capital funding went to women-only founding teams last year, according to a report from the Female Founders Fund.

Parekh noted that it’s important to be aware that raising funds could narrow your potential outcomes.

While an entrepreneur obtains to decide everything and be “the holder of your own destiny,” he stated: “The minute you raise money, you’ve obtained three paths in front of you: You obtain acquired, you go public, or you go out of business. That’s it.”

“Sometimes those factors are outside of your control,” he added.

The way venture capital firms work, Owens stated, is they give money to compact startups “to have those startups grow and then to sell or go public, and that money is then returned to their shareholders.”

So, “as soon as you take someone else’s money, to a large extent, over time, you lose control of your business. What that means is that people join your board, they give you money, and they start to take voting share of your company,” stated Owens, an Agnes Scott graduate who founded the digital health platform Spark Diagnostics and co-founded health care company Grail in Menlo Park, California. Usually, founders lose voting control of their company by the second round of funding, she stated.

Don’t trust everything you see on LinkedIn

The startup veterans acknowledged that entrepreneurs also go through challenging times that aren’t always visible to those on the outside.

“It’s important to remember that everyone goes through life viewing at LinkedIn being like, ‘Oh, they’re so amazing.’ It’s becautilize they don’t put the ones that didn’t work on LinkedIn,” Owens stated.

“So just remember that part. I built plenty that didn’t work,” Owens stated.

And when building a startup, Owens stated, “You’re gonna hear ‘no’ most of the time.”

“You’ve obtainedta be super thick-skinned,” she stated.

Burks Solomon added that it’s important to “be mindful that things come full circle. … Just be gracious if you obtain a no.”

When it’s time to sell …

Owens stated there’s one thing that she would have done differently in her path to selling her startup.

She had a baby the weekfinish that a lot of important decisions obtained built for the sale of her company, and she realizes now she should have neobtainediated her equity in the deal sooner.

“It’s hard to consider that that really did go down all at once,” Owens stated. “I was really naive. … I was like, ‘Oh no, I can just do that next week.’” But that finished up having long-term implications.

Burks Solomon stated she was also unprepared when it came time to sell, for a different reason.

“The one thing that I didn’t understand going into an exit was the tax implications, and what I requireded to do beforehand to create sure that I was safeguarded,” Burks Solomon stated.

“I was just happy that someone was interested in purchaseing my company,” she stated, and “excited to obtain it done, but really didn’t understand all the personal implications.”

Now she knows the importance of having a financial team, including a financial adviser, lawyer and tax expert ahead of time.

“I was so green,” Burks Solomon stated. That’s why “it’s so important to have mentors, have people who have been where you’re attempting to go, becautilize there’s so many things that you just don’t know until you face it, and at that point it’s maybe too late.”

Life afterward

Burks Solomon stated after pouring so much of herself into her startup and then selling it, it was difficult for her to establish her own identity.

“My identity was very wrapped up in Partpic,” she stated. “It was hard for me to break away from.”

When she pitched the company to others, she always wore an orange dress. “I wanted people to know Partpic colors, and me associated with it. So I had that as my uniform for four years.”

“And when I sold the business, I had a really difficult time becautilize I didn’t even know how to introduce myself. I was still utilized to stateing, ‘Hello. My name is Jewel Burks, I’m CEO of Partpic,’” she stated. “So it was hard for me to kind of take away my business identity and my personal identity and build who I actually want to be as a person.”

“I really had a bout with depression after I sold my business becautilize I didn’t know who I was,” Burks Solomon stated.

That, she stated, is “why the mental health piece is so important.”

AJC Her+Story is a new series in The Atlanta Journal-Constitution highlighting women founders, creators, executives and professionals. It is about building a community. Know someone the AJC should feature in AJC Her+Story? Email us at herstory@ajc.com with your suggestions. Check out all of our AJC Her+Story coverage at ajc.com/herstory.