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The first contact between teams occurred in the first months of 2014. The management teams sealed the signature in the summer of 2016. In between, an intense negotiation with up to two rejections that led to the sale for more than 165 million euros from Ticketbis to Ebayone of the most important in the Spanish entrepreneurial ecosystem.

One of its co-founders, Ander Michelenawho was present this week at the South Summit in Madrid, reviews in an interview with EL ESPAÑOL the difficulties of the operation, life under the umbrella of the technology giant and the debate on ticket resale. “The first price they offered us through Ticketbis surprised us very badly”recognize.

First ridiculous offer and first 'no'

Linkedin was, as has happened in other sales, the meeting place. One of the business development managers at Stubhub – the Ebay subsidiary that finally acquired the Spanish company – wanted to contact. There was first meal in London. “It was simply to test and see the options,” says Michelena. Three months later, they start inviting founders to events. Wimbledon was the first of them. “I saw many matches in the tournament but we came to nothing,” he remembers.

Was the way for the future buyer to make contact. “They have to get to know the team and see if you fit in with their team and if there is a good vibe,” he explains. It was just the anteroom. A few months later, at the end of 2014, they began a first purchase attempt. The founding team's first question: How much are you going to pay? There was no response. Ebay has a “very curious” policy in its acquisitions: they do not offer a purchase price until they do the 'due diligence' (in-depth analysis of the company).

For Ticketbis there was a serious risk: Stubhub wanted to expand in mature markets where the Spanish company was already present and opening the doors of its business was giving clues to a potential competitor without there being a high probability of reaching an agreement. With this, there was a first “hard” negotiation: the breakdown of information was going to be very limited and only focusing on general regions.

You always have to say no to the first offer.

In late 2014, Jon, the other co-founder, and Ander were practicing their poker face. “You always have to say no to the first offer”Michelena justifies it, with a smile. They didn't have to put that face into practice because the anger was enormous. “I got up from the table, it was a shame,” she says. The price for a company that grew 100% year after year was just over 50 million. “It surprised us a lot in a bad way”he finishes.

2015: An injection of capital and another 'no'

The following months were not going to be easy. One of his great rivals knew his numbers and the regions that were doing well. “The next thing they were going to do is enter our countries,” he admits. And he adds: “What is the only way to defend ourselves? A large financing round”.

They were looking for between 30 and 50 million euros to fight with them. They negotiated with funds in London, New York or San Francisco (USA). On one of the trips to the latter, Michelena receives an email: “Why don't you come and eat?” The same thing happened as in other operations: a different team appeared at the meal than in the first negotiation “so as not to hurt feelings.” “It's a normal strategy: first you try something at a knockdown price and then you make another negotiation.” They wanted to bring positions closer together.

Was May 2015. The Spanish entrepreneurs were clear about it. “We told him that we were not going to repeat the same process; that if they wanted to buy us they had to set a price almost four times higher than the first time… that if they wanted it, fine, if not, we were going to make our round,” recalls the co-founder. Within a week they had a new offer on the table with the price they were asking. But the tension was not going to end here, far from it. They decided to reject to demand something more. “They sent us an offer with a little more… they warned us that if we rejected there would be no more; We tried to raise it but finally we closed,” she recalls.

It's a normal strategy: first you try something at a knockdown price and then you make another negotiation

That price, which would be closer to 200 million euros than 165 million (it has not been made official due to confidentiality), was agreed upon with some of the shareholders. Neither Ander nor Jon could give names, because Ebay is a listed company. Without offering figures or identities, they received the support of a good part of their complex shareholders (with more than 50 members). What was the last trigger? José Marín and Fabrice Grinda, two of the great individual investors in Silicon Valley, were clear about it: “If you hold on now, it is likely that you will sell for much more… that being said, the operation is going to change your life completely, sign it.”

2016: closure two weeks away from running out of cash

This had only just begun. The official letter with the price arrived in June. That month the second 'due diligence' began. They had 250 people on their side looking at the company, since the size of the acquisition exceeded certain limits established by Ebay. “On our side there were my partner and I and we passed 10 people to the other side… that is, 12 against 250”explains Michelena.

They were four very hard months. In October everything was already tied up. But it remained another even worse side: the discussions between auditors (PwC and Deloitte) and lawyers (Cuatrecasas and Uría y Menéndez). One of the critical points had to do with the type of contract. They opted for the American model over the European one. And that forced a third 'due diligence' with the contract to show key business data.

If you hold on now, it is likely that you would sell for much more… that said, the operation is going to change your life completely, sign it

On June 4 they come to the fore to announce the operation. They arrived with the reserve of fuel. “In two weeks we were out of cash; In that long period we had not made a round and we had gone out of business (during the process) and if we grew at 100% we grew at 40%,” he points out.

From that month of June there were three more months left until the payment was formalized and executed in August.. In that impasse, marked by the negotiation with investors to definitively close the operation (previously they could not disclose specific figures to all shareholders due to confidentiality problems), they had to negotiate a bridge loan provided by Ebay “because we did not reach August 4 ”.

Many zeros in the account… and a new fund

After that day, a “very strange” feeling comes. “You look at the bank account and think, 'This is bad, there are too many zeros.'” And there were so many. Between Jon and Ander they shared more than 50% of the company for which Ebay paid an amount approaching 200 million euros (the figure offered at the time was about 165 million dollars).

You look at the bank account and think: 'This is wrong, there are too many zeros'

It didn't just change their lives. Also to his family and environment and his investors. He Ticketbis' shareholding was populated by more than 50 investors. The only private venture capital fund was Active Ventures, based in Barcelona, ​​which entered the last round before the sale and which accepted its rules: it was not going to 'clean up' that shareholding and it was not going to have special shares. “It helped us a lot to have more financial discipline,” says Michelena.

They not only tried to share it with their families. Also with the team. Thus, the package 'stock options' assigned to the founders was distributed to other workers. From 20 people who had the right to those shares, it went to 65. “It was a way to reward the people who had been working there,” he says. And he adds: “If you look at the whole thing, about 100 people got paid from the Ticketbis transaction.”

As a measure, family members and founders decided to create a 'family office' to manage all the money from the sale. It had a more traditional investment in funds and real estate and a capital injection leg in technological startups (they have already made 7 investments in the US with José Marín and Fabrice Grinda and another 7 in Spain). Now, they have given one more twist. In addition to doubling its capacity thanks to the support of the EIF (European Investment Fund) and the ICO (Official Credit Institute), they have opened the door to specific co-investments from other 'family offices'.

“Hard months” landing on Ebay

The months following his joining Stubhub were “very hard.” For the adaptation to a new team and for the internal changes. Jon and Ander initially reported to a manager who brought in between them and the company's CEO. Spanish entrepreneurs saw it well. Not only because they could learn more from him, but also because it was a way to get rid of responsibilities in the face of their possible departure (with the sale they signed a period of 3 years of permanence in the company without being able to invest or work in direct competition with Stubhub).

It was just on paper. Some time later, that manager leaves and they report directly to the CEO. “To our responsibilities we add many trips to Silicon Valley, calls to the United States and traveling every month to the London office and other regional offices,” says Michelena, who acknowledges that it has been 7 or 8 months of “a lot of work.”

To our responsibilities we add many trips to Silicon Valley, calls to the United States and traveling every month to the London office and other regional offices.

They have turned the sock inside out. At least, according to the (few) numbers you can provide: have turned England into a profitable market, in addition to recovering 100% growth in income Stubhub international locations beyond the US (which are your responsibility). Apart from the United Kingdom and Germany, which the American company already had, Ticketbis contributed the rest, especially in Asia and the rest of Europe.

Its landing in the structure of the Ebay subsidiary accelerated the removal of the Ticketbis brand. Despite the nostalgia, it was the founders themselves who opted for it. The reason? The new owners wanted to make a strong investment in branding to reinforce their presence. “Ticketbis did very well in growing in many markets and catching those 'early adopters' (more advanced users) but we had not reached the mass market because very few people knew our model,” says Michelena. That campaign involved changing the brand to avoid “losing months and money.”

A bot law, “as soon as possible”

Aside from corporate matters, during these months there has been a intense debate on ticket resale. Complaints in the events sector have put it on the table. How have they experienced it? “It is a slightly biased debate,” explains Michelena. She understands that, just like with plane tickets or a piece of furniture, you should be able to sell a ticket you've purchased. She also insists that the focus has been wrongly placed on the minimum percentage (she assures that 50% of her tickets are sold below the box office price) of tickets that are sold at a higher price.

In this debate, he is clear: there must be a greater transparency about the destination of primary market entries (to know whether or not the promoters reserve a percentage for resale) and a antibot law to avoid massive purchases and then profit from those tickets. “We are talking to the parties, but the fear I have is that they will end up doing something populist, like capping prices, and we will return to the insecure system of yesteryear,” he says.

Be that as it may, this debate will mark the next few months of his career at Stubhub. They still have two more years until they can separate themselves from their buyers. While that happens, the road traveled has been crazy.

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