With the big acquisition announcement GarageGames made a while ago, sometimes it is hard to stay grounded in the every day. However, there is a very human aspect to all of this news, and I hope I can capture some of it for your enjoyment!
A year ago when I was on my first vacation to Italy and France, I got an email from Josh Williams in an Internet cafe. It was really short, “IAC wants to talk to us.” We had just gone through a couple of months on another acquisition offer that we ended up turning down. I was tired, and ready to just put pedal to the metal with GG and make it go on our own, so my answer was “no thanks.” Then the business side of me kicked in, and I said, “OK, I’m in for discussion, but they need to allow us to keep doing things the way we are, i.e. making game development accessible to everyone, and treat developers like we want to be treated.” BTW, that was pretty much the reaction from all of the GG partners/stakeholders, so Josh pursued it, they loved our strategy, and it kept looking good.
So, as soon as I got back, Josh and I made a trip down to Los Angeles to meet with Victor Kaufman, the Vice Chairman of IAC, to see if we should move forward, and if a deal made sense. We left the meeting stoked. Victor is a finance guy, but he has made movies and done a lot of really creative things in the past, and he made us feel welcomed and genuinely understood what we were trying to do.
On the way home we circled through Portland to meet with Andy Yang (that we recruited to come to GG after the deal was done… now he works at GG), who was very instrumental in working with Shana Fisher inside IAC to develop their gaming strategy. Andy was there to make sure we passed the technology hurdle. It was pouring rain outside, so we huddled over a great lunch and we all seemed to hit it off well. Again, Josh and I were stoked. We kept meeting great people that really seemed to understand what we wanted to do, just in a bigger way!
Next up, we got word that we “passed” the auditions and a meeting with Barry Diller (more info here) in the New York board room of IAC was in order. Barry Diller has an incredible past and current record of success. I had been reading about him in all of the business magazines for years. He worked with people like Michael Eisner, Jeffrey Katzenberg, and Jack Welsh, not Jeff Tunnell (I can’t speak for the other GG partners). I was confident in the plan and our ability to make games and pull it off, but still AGH! Now it was time to get nervous!
We spent the next few weeks polishing up the business plan and presentation. This was not too bad because we were doing this plan anyway and we had all of our thoughts in order. We just had to work out how we were going to do it in a much bigger way, with more money and the kind of exposure a company like IAC would bring. If we could do this deal, our chances of success would go up about 1,000 fold!
The night before the flight to NYC, I decided to go to Men’s Warehouse and get some new clothes. I made sure Josh did the same. It had been a LONG time since I had to wear a suit, but I did understand that unspoken “dress codes” are the norm on the East Coast. It simply is a matter of showing respect when going into somebody’s “house”. I kind of hate to admit it, but after ten years of wearing jeans and black tee shirts (just me and Steve Jobs, baby), getting dressed up was actually enjoyable.
By now, it was December, 2006, and it was turning to Christmas time in NYC. Cold, decorations, and the big city are always fun. We found a hotel close to IAC’s old world HQ (before they moved to this new building), so we would make sure and be there on time no matter what the traffic was doing. I don’t think there is an excuse big enough to cover for being late to a meeting like this, so we left nothing to chance! The next morning we were up and dressed a few hours before we needed to be, so we had breakfast at Norma’s, the best breakfast place I have ever eaten (in fact, it was so good we ate there the next day, too).
Time to do it. Dum, duh, dum, dum… We marched up to the security guard and acted like we were supposed to be there, and the next thing we knew we were in the Board Room of I, f**kin’, A, C! By this time, Shana, Victor, and Andy were on our side, so we were feeling pretty comfortable. We all wanted to work together to pull this off. Josh and I were feeling pretty good. But, the boardroom was big, and all of a sudden it was filled with a bunch of people we don’t know or expect to be there. Meet and greet is great, but the more people that show up, the more inadequate I think we both started to feel. WTF business does little GG have doing in a place like this??
Barry walked in, dispensed with the hand shakes and small talk, then immediately took control of the room, asking his first question before he even sat down. BAM, -3 hitpoints, and Josh and I were stumbling a little bit, when Andy swooped in to save our butts by giving an XBLA Marble Blast demo while we were talking (+4 healing potion). That little diversion gave us enough time to regain our composure, and we started doing much better. By the end, discussion was flowing and everybody was having a good time (+ 8 exp. pts). As Barry left, he gave orders to make sure things continued to progress. We didn’t exactly know how it went, but everybody in the meeting said that we got an exceptional response, and the deal looked to be on. (level up!)
After that meeting, Shana, Andy, Josh, and I went out for a celebration dinner and to really start to nail things down. There was a certain amount of alcohol consumption, and even though we all knew there was a TON of work to do, this thing was going to happen!
As a side note, Andy told us that one of the best hamburger joints in all of NYC was in a dark dingy corner of our fancy hotel. We didn’t want to wait until we came back, so we ATE AGAIN! That night, we didn’t sleep. Our flight home required us to leave the hotel at 6AM, and we were still buzzing at 4:30AM. Side, side note is that IAC actually had a LIMO pick us up and take us to the airport. Very cool.
From that time on, everything was a blur. All of the fun dog and pony relationship building was done, and we had to move on to the dirty work of getting the deal done. Lots of attorneys. No, I mean LOTS of ATTORNEYS, back and forth, cajoling, reading legalese as thick as hair on a dog’s back, Board meetings, shareholder meetings, more attorneys. More meetings until you think it cannot go on any longer.
During an acquisition, the worst possible time is the period from when everybody agrees on everything, and the paperwork is not done. By this time, all parties have a lot invested, and do not want to see the deal go sideways, but anything can happen. A publicly traded company can have a bad quarter and decide to bail, a key person could be run over, the CEO could just decide it does feel right, etc, etc.
Luckily, we had Josh Williams on our side. If Josh had not become a programmer, he would have been an attorney. Josh took the LSAT’s just for fun one time, and with out studying, he got in the 99th percentile. By the end of the negotiation and getting the paperwork done, Josh had earned the nickname Killer from the IAC guys. Good thing he was on our side.
This post is getting long, but the great ending to the story came when my wife Colleen and I were heading over to the Coast to stay for the weekend. On the way over Josh called and said… “It closed.”
I knew what that meant. Money was in the bank, and we were on our way to a whole new place.