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For 2 main reasons that I can think of: a) You don't know if the acquisition will actually happen. Therefore if it doesn't, you aren't left with nothing. b) I
by marcamillion 15y ago
For 2 main reasons that I can think of:
a) You don't know if the acquisition will actually happen. Therefore if it doesn't, you aren't left with nothing.
b) It gives you a stronger bargaining chip to increase the price of the acquisition because you literally have a strong alternative. Instagram could tell FB to screw off, they are already getting $50M.
- nodesocket 15y agoI wonder if the investors (Sequoia, Greylock) knew of the pending acquisition offer from FaceBook when they put forth the 50M investment? If they did, that was the easiest investment ever.
- RexRollman 15y agoIf they did, was it legal?
- lancewiggs 15y agoThey may have brokered the deal, and at least gave credibility to the investment to make it easier for Facebook to pay the price. Beautiful result for the portfolio - we are in a bubble and flipping this so quickly means that they have $ return in the bank way before the more speculative investments.
- damoncali 15y agoI believe I read that Marc Andreessen is an investor (and board member?) in both companies. Seems painfully unlikely they did not know. And why wouldn't Instagram TELL them?