A "CEO friend" isn't going to give you $125m out of the goodness of their heart so some random shareholders can save face.
Worst case, the business fails, everyone happily moves on.
How do you think automattic is funding this transaction? There are underwriters. And underwriters need rigorous dd to justify $1,000 let alone $125m.
Even if it's an all-stock deal, a transaction like this would need board approval, and a good board needs ... rigorous dd.
There are a lot friend and family members of so-and-so who are "worth" a few million dollars and that money was largely a gift. They largely spend a lot of time pretending to be "founders", "advisors" and "angels" but no, they got lucky.
Not everything is like that, but there's quite a lot of that within the billions of someone else's money's ocean that flushed SF during the last +20 years.
When a similar acquisition was made a year ago? And it perfectly aligns with a their stated thesis that texting becomes a CLI in the future?
The more successful an entrepreneur, the more allergic they are to spending money
My guess would be that the real number is very different, that this is just a matter of them hiring the Beeper people and getting the brand along with it. Then someone leaks the 125 m figure to the press, to the benefit of both Beeper and Automattic. Makes the latter look rich and the former successful.
Or maybe they actually did give $125 m to a broke startup without revenues or a working product, that was about to go bankrupt. But that does seem gullible.
It is a magical way to turn “anybody” into a successful founder or VC if they’ve got the right connections and in fact you can create both ex-nihilo in one transaction.
If you read the newspapers you’d never find out that 70% of acquisitions achieve their goals. A lot of that is you hear more about the ones that fail and not the ones that succeed. The ones that fail give many people the impression that there is nothing rational at all about how acquisitions happen in corporate America.
Did it work? No, but I don't know of any examples of an entrepreneur who bats 1000
Matt promised targets.
Every target was missed and financially the deal was a failure.
The board then stopped any further acquisitions.
I would guess that texts / beeper were cheap and that Matt is looking at a very very long time to profit. He was once a fan of the 'pizza/team' ratio that Bezos/Amazon pushed, so maybe that's where he is looking.