Fourteen years ago, John Vechey dropped out of college to build a video game—but ended up building a video game empire. With Jason Kapalka, and Brian Fiete, PopCap's co-founders, Vechey helped create games like Bejeweled and Plants vs. Zombies, offbeat sensations that have been downloaded hundreds of million of times over the past decade. In July, Electronic Arts, the leading publisher of video games, bought the company for $750 million in cash and stock, and if PopCap hits certain earnings targets, its owners could reap an additional $550 million. It's the largest acquisition Electronic Arts has ever made.
But Vechey, who grew up in a working class town in Wisconsin, insists it's not (only) about the money. "It's about the legacy of what you created," he says. Inc.com's Eric Markowitz spoke with Vechey, who offers his insights—and advice—about selling your company.
So, how does it feel?
The announcement day was insane. My e-mail and my phone just lit up. I really felt the burden of this deal—this 'big secret' that we had—so I had plenty of stress about it. The process took months, and outside of some big meetings talking about strategy and products, I was just kind of sitting around, waiting. It was a long, emotional endurance race.
Why did you choose not to launch an IPO instead?
Some people thought it was a great opportunity to go public for the overinflated stock price. But that's never what PopCap has been about. We're conservative, we don't make big bets, and we get where we need to be. I'm really proud of our company. I didn't want to twist it around to be anything but that.
How did you feel about selling to Electronic Arts (EA) in particular?
We've been partners with Electronic Arts (EA) for about eight or nine years. We were always really friendly with EA and we always really respected them. So for us, the big thing that appealed to us had less to do with synergy, and more to do with the fact that we spoke the same language. I looked at them, and I looked at other options, and I said, 'What company is going to be successful without us?' I didn't want to feel like the whole burden of producing was on us. Seeing the products that they have was like, 'Wow, they're doing games at the level of integrity and scope that we think it should be done.'
What about the leadership at EA?
Getting to know John Riccitiello (CEO of Electronic Arts) was incredibly important. He has a huge amount of integrity, he cares about the product, he's a good human being, he's fun to talk to, and he wants to win. For him, it's about doing great stuff. I would hire him as a CEO of PopCap.
What kind of advice would you offer to founders thinking of selling their company?
Focus on ten years out. Dennis Ryan, who's the head of our publishing division, sat me down a couple of years ago and said, "When you're thinking about selling a company, don't think about the price. Don't think about anything but 'What's the company that lives on? What will it be like in 10 years?'" That was really good advice. For me, once I shifted to the mindset of only caring about the health of this thing that we created, it became a lot easier to make those decisions. My obligation as a board member was to think about shareholder value, but I had an obligation to the legacy we created. I feel that we maximized shareholder value, employee happiness, long-term success, and I feel very lucky right now. Also, make sure you respect your core team—your lawyers, accountants, admins, HR people, etc. Those people are working their asses off in this process, and in any acquisition, they don't know if they have a job. They just deserve so much respect and appreciation—they're the unsung heroes.
Will day-to-day operations change?
Very little. The big thing we keep reminding people is that you had a job before the deal. You have the same job now. If you can leverage EA to do your job better and more effectively, you should do that. If you can't, don't. Don't integrate for the sake of integration.
How did you and your co-founders celebrate?
We haven't yet! Dave Roberts, our CEO, has this incredibly expensive bottle of wine—it's probably $15,000. He always thought he was going to donate it to a charity auction, but a couple of years ago he decided that when we sell the company he'd open it. And so at some point, when we've all kind of relaxed and feel like we can just chill, there's going to be a nice dinner at his place and we'll open the bottle. But, then again, who knows when that will be.
John Vechey will be speaking at the 2011 Inc. 500 | 5000 Conference. To attend, click here.