Ido Susan launched his first hyper-growth startup – Intucell, at just 23 years old. Just a few years later he sold the company for $475 million. His newest venture, DriveNets, has raised one of the largest first rounds ever.
In spite of what some might consider a four year forced detour from his aspirations to become an entrepreneur, Ido leveraged the opportunity into an incredible business and exit. He is now building his formidable new venture.
Ido Susan recently appeared as a guest on the DealMakers podcast. During the exclusive interview, he shared how he fell in love with computers, how he got his start in business, on his grand exit, what’s next, and many more topics.
Ido Susan was born in Israel. He grew up in Kibbutz. His parents were farmers, who never focused much about money.
In high-school, he developed a love for computers and creating things.
Israel has mandatory military service for everyone. Fortunately, that doesn’t just mean learning to use weapons. Ido was selected to work in the intelligence unit. He found it a great opportunity to gain technology experience he wouldn’t have gotten outside of that environment.
Exiting the service at 23 years old, Ido decided to make the jump right into entrepreneurship. He was driven to get out there and solve big problems and take on sizable challenges. He founded his first company, Intucell.
Intucell started out to create a Location-Based Solution (LBS) for advertising. After talking to potential customers the team realized that their original idea is not going to succeed in the market, and changed course. They invented the Self Optimizing Network (SON) and sold the technology to some of the world’s leading service providers.
During this experience, they were able to increase end-user bandwidth by almost 15% and reduced dropped calls by close to 20%.
With just one round of funding, at a modest $6 million, they continued to gain customers and were pulling in revenue from their second year, until receiving an offer from Cisco to acquire the company.
How To Get Your Startup Bought
Ido says the first step in getting your company acquired is not playing for the exit strategy at all. He recalls creating their investor pitch decks and purposely removing their chapter on the exit strategy.
He deleted it on the belief that “you need to build a company that will be solid, that will solve a real problem, create and generate revenue, that you will grow based on your revenue or based on funding.” He understood that getting this right would lead to naturally attracting people that want to buy your company.
They got focused on gaining customers, innovating and helping their customers solve problems.
As he points out companies aren’t sold, they are bought. With Cisco, everything began with being approached with a way to partner up and work together to serve joint customers. As Ido shared, the initial discussion breeds more conversations.
From his point of view, when you are showing you can deliver, work together well and can do something meaningful they want in on more efficiently than they can do in-house, a merger or acquisition is the natural next step.
The process can be very surreal too. Ido says it wasn’t until he was actually signing the final agreements that he was confident the deal would happen. In the meantime, they just focused on the business.
Ultimately the company was acquired for $475 million. Storytelling is critical for a transaction of this nature to happen and having a solid acquisition memorandum that captures the essence of the business is key. For a winning acquisition, memorandum template take a look at the one I recently covered (see it here).
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