Jeff Arnold is this era’s Ted Turner
Like a lot of people involved in the local technology startup scene in the late ’90s I watched with wonder as Wunderkind Jeff Arnold launched and built WebMD out of thin air, merged with Jim Clark’s Healtheon, and was a billionaire on paper in his late freakin twenties. The WebMD story inspired lots of us to dream big dreams. But then of course the tech bubble burst and in hindsight it all looked kind of goofy, so then we admired Jeff’s timing: he had cashed out a big chunk through a private placement from the Janus mutual fund firm in early 2000.
Was Jeff Arnold “just” lucky? Was he a Bubble Boy?
Jeff Arnold basically saved my company, N2 Broadband, from an early grave in 2001. Jeff had left WebMD and was looking at new deals. We at N2 had struggled to raise outside money as the bubble boom turned to nuclear winter. We’d signed a Series A term sheet with a hard-ball VC firm that then tried to screw us as our cash supply dwindled - they wanted to set the valuation 30% lower. Through a happenstance connection (Thomas Tull to Steve Chamberlain to Jeff Arnold) I managed to get us an audience with Jeff Arnold for the N2 pitch. We were out of cash and desperate to avoid the hard-ball VC deal.
ELEVEN DAYS after that first meeting with Jeff Arnold, we had closed on a $5.5M Series A with him and the cash was in the bank. I swear. Anybody who’s raised institutional money knows that’s just not do-able, but it happened. There were a few squirrely details (we had to hire McKinsey for strategy advice), but the truth is that Jeff Arnold saved N2 Broadband. He gave us his two top people as part of the deal (Reggie Bradford, Greg Swayne), we gave Bradford the CEO reins a few months later, we raised another $20M from good Boston VCs and Time Warner (with Jeff’s help), and we sold N2 for $120M in 2005.
Was Jeff Arnold “just” a Bubble Boy turned lucky investor? Check the news this morning and decide for yourself.
Jeff’s Convex Group bought the how-to website HowStuffWorks from NC State professor Marshall Brain in 2002. Jeff’s guy Greg Swayne built the HSW business from $1M/yr to $20M/yr in revenue over the next five years, and Jeff himself eventually took over as HSW CEO.
Today’s news: Discovery Communications is buying HowStuffWorks for $250M cash, to be the cornerstone of Discovery’s efforts to bring its video content to the web. That’s a 12x multiple on revenue, for a web business not yet profitable. Wow.
My takeaways:
(1) Dream Big. Use the skeptics as motivation. Life is too short for small dreams.
(2) Perception often becomes reality. Jeff Arnold’s ability to inspire confidence is unique.
(3) Jeff Arnold is this era’s Ted Turner.
wayt
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One Response to “Jeff Arnold is this era’s Ted Turner”
Lance Weatherby
October 16th, 2007
By my count this gives Jeff two, perhaps three of the big winners in Atlanta since the Internet age dawned.
http://blog.weatherby.net/2007/03/atlanta_winners.html