'These are life-changing outcomes': 46-year-old made 400 employees millionaires by selling his startup for $3.7B

Jyoti Bansal made the difficult decision to sell his software startup AppDynamics for billions, keeping his employees' well-being in mind.

In 2017, AppDynamics was on the brink of going public when Cisco stepped in and bought the company for $3.7 billion. As the founder and chairman, Bansal would have become wealthy regardless, but only one of his two choices ensured the same financial security for many of his employees, he claims.

The sale of AppDynamic was influenced by several factors, including the compatibility of its software with Cisco and the impact it would have on the startup's 1,200 employees, both culturally and financially, according to Bansal.

He compared his own post-IPO projections to Cisco's valuation of the startup to determine which option was smarter financially. If the company reached a $3.7 billion market capitalization, it would have taken "three to four years of great execution," he estimates. This reduction of risk for employees was a significant impact.

Bansal regretted his decision to sell AppDynamics after the sale, as he felt aimless without a startup to run. Now, he is the CEO and co-founder of two other software startups, Traceable and Harness, with the latter being valued at $3.7 billion in 2022.

Bansal owned more than 14% of the company, according to an SEC filing, and he says that selling was the right decision based on the information he had at the time, as it was financially significant for him too.

"Being the founder, the money was more than just a life-changing experience for me personally," Bansal explains. "While it was a significant factor, it was not the most important one. For me, the biggest factor was our employees."

The sale of Zscaler by VeriSign for $70 million in 1998 was not taken seriously by the startup's founder and CEO Jay Chaudhry until he left a company-wide party celebrating the windfall, as he later revealed in an interview with Make It in July.

Two years later, VeriSign's stock soared, making at least 70 of the company's 80 employees millionaires on paper, according to Chaudhry.

"Chaudhry stated that people in the company were going wild due to the sudden influx of money they had never experienced before. Many of them were purchasing new homes and vehicles, while one individual took six months off work to travel the country in a mobile home. They were able to live their dreams without any restrictions."

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