The big business news at the end of 2013 was that the darling of Vermont companies, Dealer.com, got bought for almost $1B. Dealer.com creates Web sites and online marketing tools for car dealers. From their humble start 15 years ago, they’ve grown into one of the states most successful businesses. They employ more than 800 people, 700 of them in Burlington. They’ve played a huge role in all of the improvements and excitement happening in the Pine Street corridor in Burlington’s South End.
One billion dollars is a lot of money. Of course, GE Healthcare bought local company IDX for $1.2B in 2005. Gaz Metro spent $700M on Central Vermont Public Service so it could merge it together with Green Mountain Power. Those deals made some people quite wealthy. The Dealer.com deal will do the same. With Dealer, though, there’s an outside chance this money may have a more profound impact on Vermont’s economy than some other acquisitions.
If you look at what’s happening in San Francisco’s entrepreneurial environment, you find a lot of young people who have either cashed out from a startup where they were working, or who’ve cashed out but continued to work. In either case, many of those people are taking their new found gains and spreading some of the dough around to other entrepreneurs: as seed money, if you will, for new technology companies. Usually it’s not a lot of money. But those working investors usually help three, four, or five new businesses to see if any of them will gain traction. If so, they win. If not, they take their small losses and everyone tries to build another business.
That’s one of the reasons that young, creative people with ideas are flocking to the Bay Area. They know that the money and expertise are easily accessible. They see that failure is an option and, rather than being the last option, failure can instead be a stepping-stone.
I don’t know how many people working at Dealer.com will see a big payout. But my hope is that there are enough of them to have an impact on the entrepreneurial climate here in Vermont. I can imagine that some of them might decide that making Web sites for car dealerships has been fun, but that it’s not their dream goal, so they dare to jump out and create new businesses. I can also hope that some of those who stay at Dealer decide to use their newfound riches to back friends’ or acquaintances’ new ventures.
We have a few people in the state who already do this, but not enough. And not many of our “angels” are young and entrepreneurial themselves.
The founders and staff at Dealer.com should be very, very proud of the business they created. But if some of this $1B deal can become fertilizer for other Vermont tech startups and entrepreneurs – well, that would indeed be a legacy to remember.
