Derek Sivers
@sivers New Zealand286K followers
Musician who accidentally built CD Baby, sold it for $22M, and writes books on how to live
CD Baby, HostBaby, Wood Egg
exit story · 2008 · saas founders
How Derek Sivers Sold HostBaby to Disc Makers (2008)
HostBaby was built by Derek Sivers and sold to Disc Makers in 2008 for $22M (combined price for CD Baby and HostBaby).
Key facts
- Buyer
- Disc Makers ↗
- Year
- 2008
- Price
- $22M (combined price for CD Baby and HostBaby)
- Revenue at sale
- —
- Years operated
- 9 years
- Channel
- Direct sale
Why they sold: Sivers has said the internal company culture had become unbearable and that he felt he had done everything he set out to do with the business, with little vision left for its future.
The story of HostBaby
HostBaby was a web hosting service for musicians that Derek Sivers started in 1999 alongside CD Baby, his online store and distributor for independent music.
In 2008 Sivers sold CD Baby to Disc Makers, an independent CD and DVD manufacturer that had been a close partner for seven years. HostBaby was bundled into the same deal. Sivers said the total price was $22 million. Before the sale he had put the company into a charitable trust so that the proceeds would ultimately go to music education, and he stayed on briefly as a consultant.
Lessons Derek Sivers shared
- 1.Know your deal breakers before you start negotiating a sale.
- 2.If you plan to give the money away anyway, you can put the company into a charitable trust before selling so that the sale is not taxed.
Paraphrased from the maker's public posts and interviews (see sources).
The maker
See the HostBaby product page or Derek Sivers's full profile for everything they have built since.
Other exits by Derek Sivers
Derek felt he had finished what he set out to do with CD Baby, and the company's internal culture had become painful for him. He did not need the money and wanted it to fund music education.
by Derek Sivers
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Moritz Dausinger said his personal situation had changed and the risk grew as the business got bigger, and he had long seen a sale of a small-to-medium SaaS as an ideal outcome.
by Moritz Dausinger
Sources
- sive.rs — sive.rs/2015-10-built2sell
- billboard.com — billboard.com/music/music-news/disc-makers-acquires-cd-baby-1305209/
Facts are taken from the maker's and buyer's public statements and press coverage. Prices and revenue are shown only when publicly stated; self-reported figures are not independently verified.
Keep exploring
HostBaby acquisition FAQ
Who bought HostBaby?
HostBaby was acquired by Disc Makers in 2008 from Derek Sivers.
How much did HostBaby sell for?
HostBaby sold for $22M (combined price for CD Baby and HostBaby), as publicly stated.
Why did Derek Sivers sell HostBaby?
Sivers has said the internal company culture had become unbearable and that he felt he had done everything he set out to do with the business, with little vision left for its future.
How long did it take HostBaby to get acquired?
HostBaby was sold about 9 years after launch, through a direct sale (sold directly to a buyer, often a competitor, customer or acquirer that reached out).
What did Derek Sivers learn from selling HostBaby?
Know your deal breakers before you start negotiating a sale. If you plan to give the money away anyway, you can put the company into a charitable trust before selling so that the sale is not taxed.