46-year-old Jyoti Bansal sold his software startup AppDynamics for $3.7 billion in 2007. With this deal he made 400 of his employees millionaires overnight. However, the tech company’s founder said the deal was “the saddest day of his life.”
Had to sell business even before IPO
AppDynamics was founded by San Francisco-based software boss Jyoti Bansal. It was sold to Cisco in 2017 for $3.7 billion. The IPO of this company was to come. Jyoti Bansal, an Indian-born entrepreneur based in San Francisco, was also the chairman and largest shareholder in the company, who would have also profited after the IPO. But when Cisco offered to buy the company for $3.7 billion, he decided to sell it for the benefit of his employees. At this time he first thought about his employees who had helped the company grow to this point.
In an interview with CNBC Make It, Jyoti said that when he sold his company, the shares of about 400 people who worked for AppDynamics were worth $1 million or more. He said many of his employees immediately made more than $5 million from the life-changing deal. He said, ‘People in the company were happy… they had never even imagined so much money. Many people bought new houses and new cars. I know someone who took six months off, rented an RV, and traveled across the country. They finally had the freedom to do what they wanted. To celebrate their collective victory, they threw a lavish party for both Cisco and their AppDynamics employees. However, he said he often remembers that day with regret and remorse.
‘Sorrow and regret’
He says in the interview, ‘I was sad and depressed. I had dedicated 9 years of my life completely to the company and then suddenly, it was the end of a chapter. He said that he is very sad and angry with the decision to sell the company. Bansal said he always felt that his company could have been bigger, that he could have been more successful. However, seven years after this deal, he created two more software startups – Traceable and today, Harness and its market value is $3.7 billion. This is the same amount at which he sold the startup AppDynamics.
