Meet IIT Delhi Alumnus Who Turned Over 300 Employees into Millionaires; Regrets This Decision

Photo: Jyoti Bansal/LinkedIn

A 46-year-old tech entrepreneur grabbed headlines after he sold his US-based startup, AppDynamics, for a staggering $3.7 billion. Entrepreneur Jyoti Bansal’s decision to sell his startup came as a turning point, as the acquisition turned over 300 of his employees into millionaires overnight. 

Despite that, for Bansal, an Indian-origin tech entrepreneur and an alumnus of the Indian Institute of Technology (IIT) Delhi, the moment was not a cause for celebration. Instead, he dubbed it the “saddest day of his life.”

In 2017, Bansal faced a life-changing decision just days before AppDynamics was set to go public. A tech giant Cisco came in the picture with a multi-billion-dollar offer to purchase his software company, 

At a time when the prospect of going public was exciting, Bansal chose to take the route of acquisition. His decision was primarily motivated by a desire to provide financial security to his nearly 1,200 employees.

Speaking to CNBC, Bansal said, “Selling to Cisco meant immediate and life-changing financial outcomes for hundreds of my employees.” "It was a very happy celebration. But I was sad and depressed. I spent nine years of my life fully dedicated to what we were building there. Suddenly, it’s the end of a chapter," he said.

Following the acquisition decision, the share value of around 300 of his employees hit the roof, with each staff member taking at least $1 million home.

“We had about 300 employees who made more than a million dollars in the final offer we accepted. We had dozens of employees with $5 million-plus outcomes,” he stated.

However, the decision taken by the tech entrepreneur was not just about the money. He took the risks of taking AppDynamics public against the certainty of Cisco’s offer, estimating that it would have taken years of flawless execution to attain the same market cap.

By taking the acquisition route, Jyoti Bansalmitigated that risk, securing the financial future of his employees while aligning AppDynamics with Cisco’s expansive portfolio.

“We could be part of a bigger platform, like Cisco, and their customer base and market. That’s one factor. The second is culture—what kind of home your employees get. Cisco, to their credit, did an excellent job giving a high degree of independence to the AppDynamics unit, I’d say,” Bansal told CNBC.

Yet, despite this massive success, Bansal later admitted that he felt a profound sense of loss due to his decision.

"As the founder, it wasn’t just about the money,” the entrepreneur said. “There was a deep connection with the company. It’s a great outcome in a lot of ways, but it’s the end of a chapter, or the end of a book, in many ways too. I was kind of lost,” he further stated.

"I was sad and depressed. I spent nine years of my life fully dedicated to what we were building there. Suddenly, it’s the end of a chapter," he said. Still, he backed his decision with a belief that it was the right call back then. 

The sale of the startup may have marked the end of AppDynamics for Bansal, but it left a lasting impact on his employees. As Bansal said, “That’s life-changing, so it all became risk versus reward.”