How Match.com’s Founder Created The World’s Biggest Dating Site And Walked Away With Just $50,000

BUSINESS INDISDER – Dec 16 – In 1994, when only 5% of Americans had Internet access, Kremen took a $2,500 advance on his credit card to buy the domain name Match.com. Today, Match is the undisputed leader of online dating. Incredibly, however, Kremen has no ties to the Match brand today. Kremen walked away with $50K when he departed Match, a site that is on track to earn $450M in revenue in 2011. Late in 1994, Kremen secured $1.5M in funding from angel investors and a few venture-capital firms. Match went live in April 1995. Kremen was spending every waking hour working on the site, but a rift began to form in the board room. The first point of contention was the business model. The board also disliked the personals category. And the V.C.’s had serious doubts about Kremen’s management skills.

After butting heads once too often, the V.C.’s removed Kremen from the CEO post in mid-1995, although he remained on the ECI board. The board’s next step was to find a new CEO. Richard Neustadt, the first candidate, was “a great, salt-of- the-earth guy,” according to Kremen. On the weekend before Neustadt’s first day at ECI, he died in a rafting accident. Then the board made a billion-dollar mistake. Frustrated with the difficulty of finding the right CEO, and eager to pursue the newspaper-partnership business model for ECI, the V.C.’s spun off Match in 1997, selling it for $7M to Cendant. In June 1999, Cendant sold Match to Ticketmaster Citysearch Services for $50M. Kremen received only $50K cash from the Match sale.

by Jeff Kauflin
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