Inside Shutterstock’s $65 Million Acquisition of FlashStock

Inside Shutterstock’s $65 Million Acquisition of FlashStock

“This is an interesting interview,” stated Sam Thompson, Minneapolis business broker and president of Transitions In Business,  “in which the business owner (seller) explains how his investment banker showed him how to buy time with the initial buyer in order to bring in additonal  buyers.  The seller also shares detailed examples of how grueling due diligence can be.”

Grant Munro started FlashStock in 2013 to help big companies produce content (photos, videos) for advertising campaigns. In 2015, Instagram exploded, and online marketers became desperate for more content, which helped fuel Munro’s business from a handful of employees in 2014 to more than 100 in 2017. That’s about when Munro agreed to sell FlashStock to Shutterstock for $65 million.

The FlashStock story provides some key takeaways for any founder keen to build value:

  1. Protect your equity: FlashStock scoped their client’s needs for the year and got them to pay for a year’s worth of content upfront. This positive cash flow cycle allowed Munro to avoid raising institutional money and keep most of his equity. Munro also cautions owners to consider the team you want to build in the future and make sure you reserve enough equity for what your company will look like in the future, not just what you need now. He also advises owners to consider clauses to claw back shares of employees who leave to ensure the rewards go to the workers who stick it out to (and past) an exit.
  2. Create a traffic jam of offer: When Shutterstock made their initial offer, Munro’s first instinct was to start negotiating. Still, his advisor counselled him to buy time to try and accelerate the education process of other would-be acquirers so that FlashStock could get all interested buyers to the table at the same time.
  3. Managing investors with competing interests: Munro was juggling a group of investors who had bet on FlashStock early in its tenure. Some investors wanted Munro to sell, and others wanted him to keep growing. Munro sat down with one sage advisor who asked Munro a simple question: “Is this going to be a life-changing event for you?” The advisor went on to point out that for most of the investors, the money would be good but not life-changing, yet for Munro, who owned the lion’s share of the equity, it would change his life forever. The advisor’s message was clear: all of the stakeholders come at the decision to sell from a different perspective, and none had as much to gain (or lose) than Munro. That clarity gave Munro the confidence to take the deal.


There’s a ton more in the interview, including:

  • The surprising downside of sudden wealth
  • How to deal with the loss associated with selling your company
  • The secret to getting your customers to pay upfront
  • How to know when to sell
  • How to structure employee stock agreements


There’s much, much more in the interview.