The Accidental Millionaire in Jet.com’s Sale to Wal-MartBy
Eric Martin won a competition last year to sign up subscribers
Windfall could be $20 million after $18,000 investment
Working at a startup that gets acquired can feel like winning the lottery. Not working at a startup, but still cashing in on its acquisition, can feel pretty good too, as Eric Martin learned when Jet.com Inc. sold to Wal-Mart Stores Inc. in a $3.3 billion deal.
Martin, who works for a custom bath installation company, received 100,000 Jet shares last year when he won a contest to see who could get the most people to sign up for memberships to the online shopping site. He spent $18,000 on online ads and came away with a stake now worth millions in one of 2015’s buzziest startups.
“It feels good; it feels really good,” Martin, a York, Pennsylvania, resident, said in a phone interview during his lunch break. “The way I think to describe it is ‘occasional hysterical laughing.”’
Martin, 30, has no idea what his stake is worth, though Fusion reported last year that his shares may be valued from $10 million to $20 million. The cash-and-stock sale to Wal-Mart could have boosted that since Jet’s private valuation was pegged at around $1.5 billion last November, but the company has also raised money since Martin won his shares.
That could have reduced the value of his stake because startups sometimes give preferential shares to later-term investors that can squeeze out smaller investors or employees. Martin, who works in digital marketing, said he’s still waiting for Jet to tell him how much his stake is worth, but he’s hoping it’s in the “multi-millions.”
Wal-Mart’s purchase gives the world’s largest retailer a way to boost its online offering and better compete with Amazon.com Inc. Jet’s founder, Marc Lore, worked at Amazon for about two years after selling his previous company to the e-commerce behemoth. He founded Jet as a members-only online retailer, aiming to cut prices below even what Amazon could offer. He’s raised more than $500 million in venture capital.
While he waits to find out exactly how rich he is, Martin is thinking about his own startup, Ideadash.com, an online portal that lets people post their ideas for inventions or businesses and get others to execute on them while retaining a stake in the project.
“I’m weighing my options,” he said. “I’ve got to take time to process all this.”