Hindsight is 20-20; but I suspect that they anticipated that a Microsoft acquisition would give them a much better career, and product longevity, than the other buyers.
Example: I was a lead for Syncplicity's desktop client. Many of the pieces of our product were better than the initial versions of OneDrive. Yet, the reality was that most of our customers used us to edit Office documents. Today, Office integrates with OneDrive much better than we could. (Microsoft made changes in Windows and Office to support OneDrive, we would have needed a much larger team in order to do the same.)
In the case of Powerpoint, it plays a lot more nicely with other Office products, (and also plays nicely with OneDrive.) That wouldn't have happened if someone else bought it. Most likely, because Microsoft had so much money, they could have made their own presentation package that was "good enough" and eventually market forces would favor it due to the smoothness of their product line.
Obviously, for me, it would have worked out better if Microsoft bought us and turned us into OneDrive! It would have also worked out better for me if Google bought us and turned us into the Desktop portion of Google Drive!
I was just thinking about Syncplicity this morning, and found your comment. What a trip! Looking back, it feels like a completely different world. Hope you're well.
You're right about MSFT's long-term platform advantage. File sync is intimately related to filesystem internals, and NTFS is their walled garden - just the same as Office. We bet way harder on Google Docs but kind of missed the point there.
- Ansa (to merge for an IPO in the fall, to be done by Alex. Brown at a $75 million value)
- a “firm” offer from Borland to acquire Forethought for $18 million in cash, with action absolutely guaranteed within the week (never happened)
- an immensely complex offer from Xerox (after hours of negotiations) for exclusive sales rights to PowerPoint, for which they would pay something above $18 million
So, that’s “no offer”, an offer to merge at some later time with another company, a non existent option to sell the entire company for about what Microsoft offered for PowerPoint alone, and one offer to sell the sales rights.
It seems Xerox was the only real alternative. Reading between the lines, that would have cost quite a bit more in legal fees than Microsoft’s offer, and would mean Forethought would have to keep paying for development of the product (in exchange for a part of the revenues)
An offer is only as good as the buyer’s trustworthiness. It seems like they trusted Microsoft the most to close quickly and cleanly. The quotes around “firm” for Borland’s offer and description of laborious dealing with Xerox make it seem like the buyers thought $4M more was not worth the headache.
> a “firm” offer from Borland to acquire Forethought for $18 million in cash, with action absolutely guaranteed within the week (never happened), and an immensely complex offer from Xerox (after hours of negotiations) for exclusive sales rights to PowerPoint, for which they would pay something above $18 million. The meeting ended with a summary of the agreed directions to management: “Our real agenda is to get a clean, high offer from Microsoft.”
I think the team was most interested in the MS offer. It also looks like it was the most solid. And I guess it provided an acceptable return to the investors.
It’s hard or impossible to get a deal done if the team isn’t on board. That’s why, for example, when a company is in trouble or especially bankrupt, you’ll see big carve outs and/or cash payments to the management team (otherwise they’ll just jump ship and the investors get nothing). So pursuing, say, Apple, would just stretch things out and allow MS to go find an alternative.
Back then and still today there were multiple objectives to an exit for the Valley VC firms. Yes, they wanted a good return for themselves and their LPs and that was and is primary. But they also wanted good “brand” exits for marketing (both to LPs and startups). Finally, they want a good reputation with the staff which might help get more opportunities down the road.
There are so many more players in VC these days that the dynamic isn’t quite the same, but in my experience the big Valley investors play the long game more than east coast ones. And in Europe, apart from Hermann Hauser, I never really have seen the long game at all.
