Sometimes, wealth comes unexpectedly. Like for lottery winners.
In the startup world, there's usually time between buyout discussions and the money hitting your bank account. At the very least, you have a few days to mull over what you'll do with your new-found wealth.
How do people react when they realize they're about to be rich?
Here's what three startup executives did when they found out their companies were about to sell for big bucks.
OMGPOP founder Charles Forman wandered into traffic.
Last year OMGPOP founder Charles Forman had $1,700 in his bank account, and he was working on a new venture, PictureLife. He had left the gaming company he founded, and he wasn't expecting it to get acquired.
When his friend, OMGPOP CEO Dan Porter, invited him to New York for an "emergency trip," Forman half-assumed it was to celebrate his 32nd birthday. Instead, it was to celebrate Zynga buying OMGPOP for ~ $200 million. Forman was in such disbelief, he nearly got himself killed crossing the street.
"I walked across the street, and all I heard was ‘honk,’ ” he told The New York Times. “It was surreal...I had $1,700 in my bank account yesterday, and now I have a whole lot more.”
Forman is still figuring out what to do with his fortune, but when we spoke to him after the sale, he said he wanted to "redistribute the karma" and invest in early-stage startups.
Wiley Cerilli, founder of SinglePlatform, decided to buy socks.
Last summer, Wiley Cerilli sold his startup to Constant Contact for $100 million in cash, stock and employee incentives. A few weeks before the deal was finalized, Cerilli sat down with his wife and told her what was about to happen. The couple came up with a list of things to buy and do if the deal went through:
- Get a new washer and dryer
- Mount the TV
- Buy new socks
"We couldn't think of anything else we really need," he said. When asked how it felt to be rich Cerilli replied, "It doesn't seem real."
Tumblr's first employee, Marco Arment, was emotionally guarded at first, then decided he wouldn't really buy anything.
"I was very cautious in my emotional response just because it wasn't definite. I didn't hear about it any kind of official capacity. I learned in the press the same way everyone else learned," Arment said in a recent podcast.
He and his wife discussed what they'd do with the money they might soon have. They decided, like Cerilli and his wife, that they probably wouldn't do much.
"Tiff and I were talking once the rumors started swirling about Tumblr on Friday night. Like 'Ok, what if this is real? What will we do if we get a chunk of money from this?' And we said, 'You know, I don't really think we're going to buy anything immediately and I don't think we're really going to make any substantial changes in our life,'" Arment said.
"I have a pretty boring lifestyle by most people's measurements. I don't go out and party, I'm not going to be buying a $1,000 bottle of champagne to pour onto rap stars. No matter how much money I have I'm probably always going to wear jeans and a T-shirt most days...I don't intend to join a country club."
When asked why he wouldn't splurge Arment replied, "The sensibilities of regular people have been baked into my personality that even if I have the ability to blow any amount of money on some particular thing, I don't want to do it. I don't want to know that I did that and I don't want my family to find out and think I'm a dick for it."
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