But if I was an owner of Starbucks and Bill Gates Sr called the high bidder and scared him off so someone else could buy my business for less, I don’t know if I’d ever forgive that.
It doesn’t strike me as fair or righteous.
https://www.cnbc.com/2017/10/04/bill-gates-sr-helped-howard-...
It sounds like the Starbucks owners already offered it to Schultz and gave him 90 days to buy it and it was an exclusive offer. Part way through fundraising, an Il Giornale investor caught wind of it and approached Starbucks with a higher bid. I think the fact that Starbucks had offered it to Schultz first and then his own investor tried to undermine him and Il Giornale is sort of rotten and underhanded. I think the fact that Starbucks had offered it to Schultz first and agreed on a price and Il Giornale's own investor tried to undermine the deal is where things get a little shady.
Apologies for telling the story poorly and missing some important details.
If you and I handshake on buying my house, you’re rightfully upset when I sell to someone else for more.
On the other hand, all we had is a handshake, so I’m rightfully upset when you chase off a higher bid.
I guess how shady depends on the agreement that Schultz had. The fact that Sr was able to chase them off suggests the agreement was at least of some substance.
The point of handshake deals is to give everyone time to get the details right, without the pressure of having the deal stolen. Forcing parties to rush through the details damages the whole ecosystem, so everyone is motivated to encourage everyone else to respect handshake deals.
Our attorney (from Fenwick & West) told us the same, that it would damage the VCs reputation and that this was pretty much unheard of for them.
But I never heard another thing about it and that VC firm seems to not be having too much trouble filling out their rounds.
At least, that's what I (mis-)remembered from a Contract Law 101 course taken long ago during my undergrad days.
I am not a lawyer, either. Just an engineer with the minimum legal training required for licensure, which is basically, "know when you should ask for help."
In some cases it can be, but a mere agreement to agree is not binding.
The biggest takehome is 'consult with legal before making promises or representations to counterparties".
Edited this a few times to keep it as short as possible without being misleading.
Usually, though, handshake deals mean "these are the commercial terms, let's go draw up the contract", which isn't legally binding. In many places, though, they're respected by convention and protected by reputation.
There are some things that are on the fence in terms of materiality. For example, is the valuation pre- or post-money? Is there an option pool set aside?
Lastly, there are some types of agreements that cannot be done just on a handshake — there has to be a written agreement in order to be enforceable. IIRC from my law school days, this includes the sale of real estate and a contract that, by its terms, cannot be completed in a year. The latter excludes things that are known to take more than a year, like building a skyscraper. It would include "pet-sit my dog for 13 months while I'm vacationing", for example.
Breaking a contract is typically not breaking the law.
And there, something is enforced that is not the law but where you are lawfully obliged to a sanction afterwards ?
I don't really understand why you'd say that ? Isn't the law kind of saying "you shall not break contracts" ? And if it's not, what's the point of a contract ?
Regarding "breaking a contract": Contracts often stipulate penalties for non-performance of terms within them. For example, you contract with me to rent my house for 5 years. The contract stipulates that if you leave early, I am entitled to keep the deposit. In common language, people will refer to leaving early as "breaking the contract", but there is nothing illegal about doing so.
Regarding "illegal": If the contract does not specify some penalty for non-performance of a clause, or it does specify one but you somehow avoid the penalty, then it would become a matter for the courts, but importantly, it would be a civil court, not a criminal court. You have not broken a law, you have broken a contract, and the civil courts will determine how this situation will be made right.
His presidential bid was DOA.
https://www.theguardian.com/us-news/2019/jan/29/howard-schul...
Did you even read the story? The founders wanted to make more coffee, Schultz wanted to make more stores. Seattle used to have an amazing coffee culture, and starbucks largely killed that. Schultz rightly gets the lion's share of the blame for that
I'm loathe to admit that starbucks quality has gone up a bit lately, but even today their standard pull is burnt to hell in the name of homogeneity. So yeah, they dealt a huge blow to Seattle's (and many other cities) local cafes, and replaced them with a sanitized lack of culture.
Definitely really good western café’s in Singapore too. Ronin is prob my favourite..... looks like they had to close :(
What about places with a newly-growing coffee culture?
What about places with a coffee culture whose strength is starting to temporarily weaken?
What about places which occasionally undergo change?
For instance, many cities in southern and perhaps central Europe seem to have local cafes that don't do anything "special" with their coffee (what's a Chemex?) besides just existing as a local institution for decades with a consistent experience in quality and pricing, and that's something that I expect is very difficult for Starbucks or any foreign player to break into regardless of the quality or international popularity of the brand.
Starbucks seems to act as if it has a habit of making quarterly plans and mostly executing according to that intent.
But when I look at Consumers as a single entity it seems remarkably undisciplined. It can't seem to hold any plan in mind, coordinate its actions with any moment-to-moment follow-through on, or even _agree_ on a single intended plan. -- Consumers acts like it has no Chief Executive Function!
He sucks.
Sounds more like people were not keen on Trump
So he was a billionaire or a soon-to-be billionaire.
(Starbucks also used to be a lot more, well, serious about coffee, selling fresh-roasted coffee in bins in the store rather than bags shipped out from central roasters, as well as selling a small but well-curated selection of brewing equipment that wasn't just Starbucks-branded stuff. Peet's still has some of that vibe, although they're less eclectic now than they were even 15 years ago.)
What’s the importance of bearing that in mind?
What's more likely is that Schulz would simply have started a different chain, and we'd be talking about that company the way we do about Starbucks now.
The focus is not on the other bidder (who may or may not have gone on to make a fortune).
The point is the seller could have gotten more than what Schulz paid for the chain. If this was a corporate m&a situation and a second bidder arose at a higher price, the board has a fiduciary duty to consider that offer.