Letterboxd's Spontaneous $60M Sale

Andrew Wilkinson shares how he spontaneously acquired Letterboxd, a social network for film buffs, during a chance meeting in New Zealand.

"I was in New Zealand working on getting my citizenship for the last 2 years. There was this mandatory conference I had to go to that I was absolutely dreading. I was thinking about who I knew in Auckland and realized I'd met this guy Matt Buchanan about 10 years ago at South by Southwest. He ran a design agency at the time and had started this website called Letterboxd.

Matt and I met up for coffee. I wasn't thinking about investing or buying it at all. He started telling me they had 10 million registered users and had grown like crazy. At the end of the coffee, I literally just blurted out 'Do you want to sell?' He said 'Well, I haven't really even thought about that.'

I said 'Throw me the craziest number you can think of.' He threw the number out and I said okay. I sent him an offer within 48 hours and we bought 60% of the business about 3 months ago. The valuation worked out to about $60 million. It was totally bootstrapped, New Zealand based, with about 10 employees. They're going to keep running it.

Social networks are just incredible businesses. I call them like airports - if you own the airport, you've got this group of people that's going to congregate there on a consistent schedule and you can sell them all sorts of stuff. As long as you don't mess with them and keep the community happy, you can do some incredible stuff."