EXIT STRATEGIES

Cashing In

Profiles of four entrepreneurs who cashed in -- and what they bought.
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An Unfinished Thread

Joel Fan

  • Age: 35
  • Company: Phaos Technology, a security and encryption software company based in New York City
  • Founded: July 1996
  • Sold to: Zions Bancorporation for an undisclosed amount in December 2000
  • Big Post-Sale Splurge: Spending 18 months on the concert circuit playing piano, occasionally with cellist Yo-Yo Ma
  • Explanation: The week that Fan sold his software company, Ma called to ask if he'd like to play piano in a concert for Citibank execs at Carnegie Hall. Fan had met Ma while studying at Harvard (he went on to earn master's degrees in music and computer science at Johns Hopkins University), but building his software company consumed him for years. He jumped at the opportunity. "It was an unfinished thread in my life," says Fan, who eventually toured with Ma from Japan to Kazakhstan with Ma's Silk Road project. Fan also bought a few toys, including a Porsche Boxster (price tag: $45,000), a second New York apartment ($1 million) so he could live in one and practice music in the other, and a $100,000 nine-foot Steinway piano as a 35th birthday gift. And he started a foundation that connects wealthy executives with artists who need sponsors.

A Fun Little Toy

Elon Musk

  • Age: 33
  • Company: PayPal, an online payment service based in San Jose
  • Founded: Early 1999
  • Sold to: eBay for $1.5 billion in stock in June 2002. Musk owned 11%.
  • Big Post-Sale Splurge: A $250,000 L39, the fighter plane trainer used by the Soviet bloc during the Cold War
  • Explanation: This isn't Musk's first success. After dropping out of Stanford, he founded a newspaper software company, Zip2, and sold it to Compaq for $300 million in 1999. He then bought a McLaren F1, the fastest car on the road (and one of the most expensive, with a $1.2 million price tag). "A fighter jet sounds expensive, but it's really just a fun little thing," says Musk of his latest toy, which can pull up to 8Gs. His main investment has been $50 million in his new company, SpaceX, which develops rockets to launch satellites and -- someday -- people into space. For now, Musk, who lives in Bel Air, Calif., is keeping himself closer to earth, despite occasional L39 acrobatics. "I'm going to curtail that sort of activity," he says, citing his wife and two kids. "It does have an ejection seat, though."

An Office With a View

Jennifer Keenan Bonoff

  • Age: 28
  • Company: MLMReporter.com, which sells online marketing programs and systems
  • Founded: August 2000
  • Sold to: KMT Media for just under $250,000 in April 2002. Bonoff still receives a percentage of revenue and a consulting fee.
  • Big Post-Sale Splurge: A $228,000 townhouse in Middletown, R.I., near Newport
  • Explanation: "It happened so fast," says Bonoff, who made an offer for the townhouse two days after she sold her business. After writing a down-payment check for $75,000 and remodeling the interior of the three-story structure -- with a TV in every room to watch the New England Patriots and Boston Red Sox -- Bonoff now runs three Internet businesses from a home office with an ocean view. Bonoff also used the proceeds to rent a winter place near Jupiter, Fla., where she plans to buy a second home this fall and to dive into fundraising for cat rescue organization PawsWatch. "Selling my business bought me time," says Bonoff. "I didn't sell it for a billion dollars. But this changed my entire existence."

A Real Fixer-Upper

Jim Cusumano

  • Age: 62
  • Company: Catalytica Pharmaceuticals, a 1,700-employee, Mountain View, Calif.-based pharmaceutical outsourcer that made the world's supply of such drugs as AZT and Wellbutrin
  • Founded: 1993
  • Sold to: DSM of Holland for $800 million in 2000. Cusumano owned 8%.
  • Big Post-Sale Splurge: A $3 million renovation of Chateau Mcely, a castle 35 miles outside Prague
  • Explanation: After his wife, Jane, contracted breast cancer, Cusumano retired and later sold his share of the company to help her fight the disease and follow a dream: to direct her own feature film. Cusumano produced the film, investing $1.2 million. Jane died in June 2001, shortly after completing What Matters Most. Within a year, Cusumano had sold a three-year license for the film to Lifetime and signed a 15-country distribution deal with the Hallmark Channel. After establishing the Jane Cusumano Foundation for breast cancer patients, he was at a loss for what to do. It was then that he met Inez Sipulova, a Czech real estate developer and owner of a rundown 17th-century castle she was considering turning into a yoga studio. Cusumano and Sipulova, who later married, decided to start a center that would train executives to balance the profit motive with ethics and environmental sustainability. Chateau Mcely will reopen next summer.
Last updated: Aug 1, 2004




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