Sean Rad Keeps Pretending He's in Charge of Tinder
Tinder is not really a startup. The tumult-filled dating company is owned by IAC, and answers to it like any subsidiary. So why is Tinder CEO Sean Rad telling the New York Times his app is "self-financed," among other nonsense?
The posturing appears without fanfare, placed in the middle of this week's DealBook feature on Binary Capital:
But he had no interest in making connections with investors until Mr. [Binary Capital partner Jonathan] Teo tracked him down through an acquaintance and persuaded him to grab a cup of coffee. "Thirty minutes for coffee turned into a two-hour conversation, which turned into a friendship," Mr. Rad said.
While he is still self-financing his company, he said Binary Capital would most likely be his first call should he look to bring investors into the fold. "Many entrepreneurs see venture capitalists as a checkbook and a Rolodex," he said. "The best investors are the ones who can add value to your company, and maybe see things you can't."
This is Sean Rad trying to convince the New York Times that he calls the shots. But almost everything posited here is wrong (Aside from the coffee. I believe that they got coffee).
Tinder is not "self-financed"—it was created with the money and resources of Hatch Labs, a now-defunct tech accelerator owned by IAC, Barry Diller's multi-billion dollar media conglomerate. This is almost as far from "self-financed" as one can get. It is perhaps the opposite of self-financed. This is a fact IAC is proud of, as illustrated in a Businesweek report from last summer.
The other notable fib here is Rad's claim that Binary Capital would be his first call if he wants to bring on more investors. Binary Capital wouldn't be Rad's first call, because he's not allowed to touch the phone: Tinder isn't permitted to court investors. I asked IAC if Tinder had permission to seek outside funding, and was told, plainly, "No, it would not be possible." A Tinder spokesperson declined to comment.
This financial delusion isn't just a bad look for Rad, but I'm told it's lead to persistent friction between Tinder's founders and IAC, as they butt heads with their corporate babysitters over how much freedom they can pretend to have. They want so badly to play startup, to trade on that image of entrepreneurial autonomy, like teens who insist on being dropped off a couple blocks away from the party. But the pitch of Tinder as autonomous is a fabrication. IAC might've been mostly fine to let Sean Rad try to look cool in front of his Silicon Beach friends—let him have some fun—but that was before he started (allegedly) drawing pictures of Barry Diller as a human penis.