Riding the Cyber boom.
If you're like other gay entrepreneurs chasing the high-tech American dream today, your thinking may go something like this: Start an Internet company. Find investors to fund it. Go public. Then cash out as a multimillionaire while you're still in your 30s.
But Marc Fest is no typical gay entrepreneur. When the German-born journalist, living in Miami's South Beach, created Quickbrowse.com in 1998, he had only on thought in mind--making his job easier. Tired of jumping from one Web site to another to get his morning news, he designed a software program that pieced together all the pages he wanted to view on a single master page. No more time wasted loading pages or remembering URLs.
"Originally I did not develop Quickbrowse as a business," says Fest. "I created it to solve a problem."
Fest, 33, now finds himself with a business almost by accident, and investors are lining up to buy a piece of his company before he even has a business plan. In many ways you could say Fest has lucked out, cashing in on the Net feeding frenzy like thousands of others, gay and straight. Except he's working backward by legitimizing his enterprise after he's received financing.
Fest has also landed in the middle of potentially vast riches by connecting with prominent gay investors who see him as a person with a good idea rather than a balance sheet with promise. "Businesses get funded based on the people [behind them] as much as the idea," says Interact luminary David Bohnett, the openly gay founder of the popular portal GeoCities and one of the early investors in Quickbrowse. He adds that gay entrepreneurs should "follow their passion, not the money."
So how exactly did Fest transform Quickbrowse from a simple program into a promising enterprise, inventing a new category of Web tool dubbed the "metabrowser" in the process? He began by letting people use his product free when they visited his site, in the true spirit of the Web's olden days. (It's still free today, with 30,000 users and approximately 1,500 new ones each week.) Pretty soon a small buzz started circulating in Internet newsgroups.
Excited by the first burst of publicity, Fest says he and his lover of six years, David Sine, stinted tossing around the idea that Quickbrowse could become a legitimate business. They talked to a close friend, gay financial journalist Andrew Tobias.
Fest says Tobias immediately asked for a stake in the venture for a modest five-figure sum. The company hadn't even incorporated, but Fest decided he'd split ownership three ways, giving his boyfriend one third and Tobias a third if he'd act as an adviser. Tobias, a frequent investor in start-ups, agreed. But he says he wasn't drawn to the venture by the traditional profit motive. "The personalities involved here are really fun," says Tobias, author of The Best Little Boy in the World and a developer of personal finance software. "They have very high energy and a great sense of humor. They don't take themselves too seriously, and there's a sense of wonder that this is almost a dream."
The sense of wonderment increased three months ago when a group of cellphone-industry executives from Chicago appeared out of the blue and offered Fest $2.6 million for a controlling interest in the company. "One always reads about this, but now that it is happening to me, it's like a wonderful dream," says Fest. On Tobias's advice, however, they rejected the deal, thinking they could raise money under better terms.
Tobias's foresight proved correct. Now Quickbrowse has gathered six investors who have placed just tinder half a million dollars in the company for a minority stake, leaving the door open for even more precious venture capital funding. Among the investors is Bohnett, whose GeoCities was bought by Yahoo! for nearly $4 billion in a stock swap. Bohnett kicked in a "a six-figure" sum, according to Fest, for which he received 15% of the company.
Like Tobias, Bohnett actively advises Quickbrowse. In the next few months Bohnett intends to introduce Fest to a network of venture capital firms for the next round of financing. At that point Fest will trade his jeans and T-shirt for a suit and tie in the hopes of raising an additional $4 million.
And the offers for financing keep pouring in. Fest says he gels about a half-dozen E-mails each week from would-be investors. He has even fielded interest from Otto Beisheim, one of Germany's wealthiest businessmen. The reclusive owner of one of the largest retail empires in Europe phoned turn personally, Fest says, and invited him to dinner.
So what of Quickbrowse's long-term prospects? After all, the company didn't mm a dime in revenues last year. Fest hopes to make money lifts year by selling advertising space on the site and by licensing his product. Still, the program could be easily knocked off by Microsoft's army of programmers in no time. And though Fest is trying to patent Quickbrowse, some competing Web sites already offer similar products.
Fest is keenly aware that he must make the most or his chances now. "I have a window of opportunity," he says, "and as long as it's in front of me, I have to do everything I can--act as quickly as I can and take advantage of it." In the meantime he remains open to whatever else may come his way, including selling Quickbrowse to one of the larger Web portals or service providers. "Whether I will have an initial public stock offering or I'm bought by America Online or Yahoo! I am open to all of these things," he says. And that's precisely the attitude that has brought him such good fortune so far.
Quittner has contributed to Business Week, Newsday and The New York Times.
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|Publication:||The Advocate (The national gay & lesbian newsmagazine)|
|Article Type:||Brief Article|
|Date:||Apr 25, 2000|
|Previous Article:||The battle of Britain.|