This CEO Had $135 In the Bank When He Turned Down A Half Million Dollar Offer To Buy His Company –Today It's Worth $633 Million

A famous line from Kenny Rogers' classic country song "The Gambler" says, "You got to know when to hold them and know when to fold them." Although he referred to cards in a poker game, the advice could apply equally to big business. No one knows this better than Gecko Robotics CEO and founder Jake Loosararian, who had $135 in the bank when he turned down a $500k offer to buy his company. Today, Gecko Robotics is worth $633 million.

The year was 2015 and like many entrepreneurs, Loosararian had been pouring all his heart, soul and financial resources into getting his startup off the ground. Loosararian was a recent college graduate who started a company to build wall-climbing robots ideally suited to scan large structures (such as retaining walls and nuclear silos) for weak points.

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It was certainly a great idea, but getting his business off the ground was more expensive than Loosararian could have imagined. He told CNBC that trying to start his own company had "taken him to some deep, dark places." Loosararian recounted stories of hardship that most successful entrepreneurs can relate to. They included making circuit boards in empty power plants and crashing on his friend's couches.

This is in addition to pouring nearly every nickel he had into the company and watching his bank account dwindle to $135. Loosararian was nearing the end of his rope when a Gecko Robotics client offered him $500,000 to buy the company outright. Talk about the moment of truth. Loosararian called the offer "transformative" and referred to the buyout amount as "Earth-shattering money for me."

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By that point, he'd considered pulling the plug on Gecko numerous times and suddenly he found himself looking at the possibility of walking away with $500,000. In what can only be described as an otherworldly level of self-belief and knowledge of his worth, Loosararian turned the offer down. However, Loosararian had an ace in the hole. He had already entered preliminary discussions with Y Combinator, a Silicon Valley-based startup accelerator.

Although he confessed to CNBC that he "didn't know who Y Combinator was," Loosararian had just stumbled into an ideal situation. Y Combinator had a track record of success in helping startups like Airbnb, Reddit, Dropbox and Stripe become powerhouses. He took Y Combinator's basic offer, which included a $125,000 cash infusion in exchange for 7% equity in Gecko Robotics.

Although $125,000 was significantly less than the $500,000 offer he turned down, Loosararian knew the real benefit of working with Y Combinator was its access to Silicon Valley's venture capital funding network. It wasn't long before an even larger offer of $2,000,000 came in. Incredibly, Loosararian rejected it because the buyer wanted him to move his operation to SF and develop his robots in a lab.

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Loosararian, who had built most of his robots, told CNBC, “I just fundamentally could not agree with that, as it relates to how you build robotics. You’ve got to build it close to the customers out in the field." Instead, he pitched Gecko Robotics at a Y Combinator demo day event, where Loosararian received an offer that valued his company at $14 million. He accepted it and the rest is history.

 Today, Gecko Robotics is worth an estimated $633 million and has a long client list that includes the U.S. Navy and U.S. Air Force. More importantly, Loosararian still controls the company and Gecko builds robots for its customers on-site, not in a lab. It's safe to say Loosararian played his cards brilliantly and he has every right to be proud of his accomplishments. 

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