How a millennial's $57,700 charity lunch with Bill Ackman turned into a $46.5 million IPO
In 2018, investor entrepreneur Andrew Wilkinson, who runs Victoria, Canada-based tech holding Tiny, raised $ 57,700 to lunch at a charity auction with Bill Ackman, the well-known billionaire, activist and CEO of Pershing Square Capital Management.
The $ 57,700 lunch turned out to be an excellent investment that resulted in a friendship and ultimately a business partnership. Ackman's family office invested in one of Wilkinson's portfolio companies, WeCommerce, making it the first time the young investor had accepted debt.
This month, WeCommerce, a holding company of software and digital services brands in the Shopify (SHOP) ecosystem such as Pixel Union, Out of the Sandbox, Yopify, SuppleApps, Rehash and Foursixty, made its public debut on the TSX Venture Exchange, launching CAD $ 60 million in the process.
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Wilkinson, a millennial, was mentored by Ackman throughout the IPO process. Ackman, 54, is known in the world of value investing and activist investing companies. This year, his hedge fund's publicly traded vehicle has returned more than 66% year-to-date, far outperforming the broader market. Ackman also broke records with the largest SPAC ever recorded and is currently looking for "a unicorn".
According to Wilkinson, Ackman's # 1 advice was to think long-term.
"I think when you're young and things are going well it's tempting to think about selling deals or shuffling things around, and he really drove home that you really should only make three to five great decisions a year. The most of the time should be spent sitting on your hands waiting for the next big opportunity. "
Ackman, who is known for amassing large stakes in a handful of companies, told Wilkinson the importance of "digging into the details" and "spending a lot of time thinking and acting."
Little co-founder Chris Sparling (L), Bill Ackman (center), little co-founder Andrew Wilkinson (R)
Before entering the investment world, Wilkinson had always been interested in technology. While growing up in Canada, he learned how to build websites using old computers in his spare time. He found a clever way to source new equipment by launching a technical product review website. He checked out the products and then sold what he didn't use on eBay - and started making thousands of dollars.
Soon after, he began writing stories, hiring writers for his website, attending technical conferences, and securing ad sales. When he was 17, he even interviewed Steve Jobs.
At the urging of his architect father, he reluctantly enrolled in college but was immediately disappointed. In the end, he dropped out of school and moved to Victoria, the capital of British Columbia, with almost no money. His goal was to save enough to move to Silicon Valley, but he had to start over because he had given away his website.
He began developing freelance design software for Internet applications around 2006 before it became ubiquitous. He founded the MetaLab company and began to attract more prominent customers. Since then, it has grown into one of the top design agencies with clients including Google (togetL), Disney (DIS), Amazon (AMZN), Uber (UBER) and Slack (WORK).
By 2013, he headed five companies as CEO with hundreds of employees.
He sold one of the companies, Pixel Union, a Shopify partner, and had a cash balance. He then started reading books on stocks and investing. The first book he picked up was Alice Schroeder's Snowball, a biography of legendary investor Warren Buffett.
"As I read Buffett, I realized I had just sold a business that was an amazing compounder with a moat. So I hit my forehead," he recalled.
Wilkinson had remained on the board of directors of Pixel Union and remained a shareholder.
In 2019, he was "incredibly optimistic" about Shopify's future and reached out to the private equity firm to buy back Pixel Union. He worked with Ackman, father-son duo Howard and Andrew Marks, Uber co-founder Ryan Graves, and Shane Parrish of Farnam Street to make this happen.
"It's just been a wild ride. The thesis is very simple. E-commerce is set to double by 2024. Shopify has become the standard e-commerce platform for independent retailers. It is the only alternative to Amazon that is true to scale In fact, number 2 on Amazon. "
As ecommerce continues to grow, so will Shopify and the companies in this ecosystem.
"Just like the iPhone and the App Store or the Salesforce App Exchange, there is this huge ecosystem of partners that will benefit from [Shopify], and we're one of those partners in the ecosystem."
Since WeCommerce was founded in 2010, the company has acquired more companies that provide software and digital services to the Shopify community. With the public debut, WeCommerce is looking for more deals.
Against the backdrop of frothy tech reviews, Wilkinson looks at between 750 and 1,000 companies and buys between three and six each year.
"It really means we're just waiting for the right opportunity where there's a great founder who wants to sell his business to someone who understands it. And people sell to us for the same reason that they sell to Buffett sell - because we have a great reputation We've been doing this for 15 years, and we're founders too. We have found that many private equity firms that have approached us over the years have viewed our business like a chart, like something That you can scroll in a couple of years, secure some profits for yourself. That's not how we see these companies, we want to own companies for ten, twenty, thirty years and we want to keep the culture intact. "
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.
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