acquisitionIn David Kirkpatrick’s book, Facebook was approached by a “New York financier” in 2004 offering 10mm for the company.
Is this unusual ?
How often do individuals (I assume it was an individual) acquire a startup ?
It is more likely that the financier wanted to acquire the majority of facebook shares on behalf of his company, or on the behalf of another company (which he was a shareholder).
Individuals who put money into companies without operating them are essentially angel investors. But this presumes that the company can operate on its own. Other individuals may buy a company (not a startup - but a small business) so they can either run it themselves, or so they can enjoy a steady revenue stream over many years.
It is rare that an individual would want to buy a pre-revenue startup. By definition, startups are not fully operating companies, and are still searching for the product-market fit. So the individual would have to essentially step in and bring the company to the point where it could be self-sustaining, attract venture investment or be acquired.
But I suppose it does happen. I personally have done this a couple of times (though I would never classify it as an “acquisition”) - where a small team of 2-3 young entrepreneurs have developed a technology or a product, but really are not suited to bring it to market, or run a company. The tech/product meshes well with other projects I am working on, so I give them some money to “buy out” the code, and the IP. This is really more of a IP deal as opposed to an acquisition…
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