Back in 1997 I created one of the Internet’s earliest advertising companies. It was a banner exchange network…remember those?

Basically it worked like this; if you owned a web site, you could sign up as a member to BannerClicks.com and you’d get a little snippet of code that you could place at the top of your website that would show ads from our network.

For every two ads that were shown on your website, one of YOUR ads would be shown on another member’s website. Sounds sort of like a pyramid scheme, but it wasn’t.

This setup had several major benefits:

1. You could get free exposure and traffic to your site…
2. It had a viral element built in which was good for you as a member and for me as the network…
3. With a 2:1 ad ratio (for every two ads you show, one of yours gets shown elsewhere) the house (me) always wins!

Basically because of the 2:1 ad ratio, I was able to show all the required ads from all the members, but still have a surplus of extra ad space to sell to paying advertisers.

It was an instant hit.

Within the first three months, we had shown over one million ads across our member sites.

At the time I was like 19 years old and realized instantly that I really had something. Up until then it was just me coding alone in the tiny trailer I shared with a roommate who wasn’t working with me.

I had to decide whether to raise money and really make a go of it, rent office space, hire advertising executives to help sell the excess ad space and marketers to help expand the membership…or sell the whole thing.

The year was 1998 or maybe 1999…the dotcom boom was raging. Other sites were selling and going public at insane valuations and with less proof of concept or success than bannerclicks.com already had.

So I decided to sell.

I was already running a couple other companies and the banner network was more of a side project anyway. I didn’t want to run an ad agency, I wanted to sell software (less overhead, higher potential earnings) and one of my software titles (the Submission-Spider) was already taking off.

Besides, I was like 19 years old, living on my own, and didn’t even own a credit card. How was I going to raise money in the midwest?

So I posted the site for sale on a couple of website selling boards and in no time at all was approached by two groups who were each seriously interested. One was a publicly traded company, the other was a group of investment bankers from New York.

If you’ve ever tried to sell something big, you know how great it is to have two different groups fighting over which one gets to buy!

I started negotiating and over the course of a few months ended up selling to the publicly traded company since they were able to sweeten the deal with a large chunk of stock in their company. WebQuest International, Inc. (stock ticker: WEBQ) was their name, but they imploded shortly after the dotcom crash just like so many other companies did at the time.

The whole thing was an amazing experience in how to negotiate the sale of a company, and a crash course in the workings of the Stock Market since part of the payment was in publicly traded stock.

And in the end, through the course of playing both companies off against each other, I got to know the lead investment banker (who ended up losing out on the bid) and ended up co-founding my next company with him in Manhattan (VitalBio.com, Inc.) and ultimately building and selling my next big project…but more on that later.