How This Struggling Startup Got Acquired For $975 Million: 4 Key Lessons

Dave Schools
5 min readOct 26, 2023
Loom’s cofounders

Atlassian recently announced its plan to acquire video messaging startup Loom for $975 million. Loom was previously valued at $1.5 billion. The former unicorn joins Atlassian to create the future of work communication, aimed primarily at enterprise organizations.

Whenever a startup gets acquired like this, it’s a significant moment for the cofounders, investors, and hopefully, the employees: this is the moment they’ve all been waiting for — when their wealth “on paper” becomes liquid wealth in their pockets. Surprisingly, Atlassian says it plans to pay for the acquisition with cash on hand. Imagine having $975 million in your checking account!

It’s unclear if everybody wins from this deal or not, but nevertheless, an exit is a major milestone and a huge achievement for any startup — one that comes with lessons for entrepreneurs for their own journeys.

Welcome to Dave’s Deep Dives. I write a weekly research report in Entrepreneur’s Handbook where I get personally obsessed with a company, a founder, or an idea and hunt for the deeper insights and best takeaways to share with you.

1. Loom’s early days are proof that if your startup isn’t gaining traction, take stock and reset. You might be 1–2 pivots away from becoming a unicorn. Keep going.

The early version of Loom was called “Opentest” and it struggled.

The three cofounders spent eight months hounding people to use the original version of Loom. The product went through various failed launches and fundraising attempts due to little traction.

There was no secret sauce, no secret growth hack, and no novel “key insight” that led Loom to product-market fit. It was an arduous grind of feverishly listening to user feedback, making pivots, and late nights.

But instead of giving up, they maxed out their credit cards and kept going. They widened the problem they were solving. They evolved from a “video tool for gathering expert feedback” to focus on a much bigger market: video’s role in work…

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Dave Schools

#2/VP Growth at Hopin. Bylines in CNBC, BI, Inc., Trends, Axios. Founder of Entrepreneurship Handbook (230k followers). Cofounder of Party Qs app. Dad of 3.