New Delhi: In 2017, Jyoti Bansal, the founder and chairman of AppDynamics, faced what he calls “the hardest decision” of his career — selling his software startup to Cisco for $3.7 billion just days before its planned IPO. While either option would have made Bansal wealthy, his primary concern was his employees.
Who Is Jyoti Bansal?
Jyoti Bansal, the founder of AppDynamics, sold his software startup to Cisco in 2017, making 400 of his employees millionaires. The 46-year-old, who graduated from IIT Delhi, is the lead inventor on over 20 US patents. After selling AppDynamics, Bansal went on to start the software delivery company Harness, the venture capital firm Unusual Ventures, and the API security startup Traceable AI.
Bansal says that selling the company was the right move for his staff. Around 400 employees became millionaires due to the deal, with many earning over $5 million. “These are life-changing amounts,” Bansal told CNBC.
What She Said?
Jyoti Bansal weighed several factors before accepting Cisco’s offer. He considered how well AppDynamics’ products fit with Cisco’s offerings and how the sale would impact his 1,200 employees, both culturally and financially. He also compared Cisco’s $3.7 billion offer with his own IPO projections. Bansal estimated it would have taken three to four years of strong performance to reach that valuation on the public market. By selling, he says, “We reduced that risk for all the employees. That’s a significant impact.”
Although Bansal initially regretted his decision, believing he could have continued growing the company, he stands by his choice. The sale allowed him to focus on other ventures. Today, he’s the CEO and co-founder of two new software startups: Traceable and Harness. Harness, his most recent venture, was valued at $3.7 billion in 2022.
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For Bansal, selling was about more than his own financial gain. "As the founder, the money was life-changing for me, but the biggest factor was our employees," he said.
It’s rare for startup founders to prioritize their employees when deciding to sell. Jay Chaudhry, the founder of Zscaler, experienced something similar in 1998 when his company was acquired by VeriSign for $70 million. He didn’t fully realize the impact on his employees until later. When VeriSign's stock soared two years after the acquisition, 70 of the company's 80 employees became millionaires. "People were going crazy," Chaudhry recalled. "They had never thought of so much money. Some were buying new houses, others new cars. One employee took six months off and traveled the country."
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