The dot.com business model was built around new technologies and new ways of doing business. Fast-growing companies and their intellectual property were snapped up in mergers and acquisitions at a blistering pace in the boom. Now, many of the purchasers are hoping to shed excess weight.
In steps the newly formed “Venture Buyout” firm Garnett & Helfrich Capital:
Now a pair of Silicon Valley-based venture capitalists have opened an unusual $250 million fund intended to buy and rehabilitate such companies, which Terry Garnett, one of the two founders, calls “the orphaned and the unloved.” (NYTimes)
In many cases, the partners hope to bring original creators back to run the new companies.
“We’ve heard from a number of founders,” Mr. Garnett said, “who told us, ‘Gosh, we sold our business four years ago, and now our baby has been all screwed up and we want it back.’ ”
Garnett & Helfrich provide their own definition of terms:
Ven-ture Buy-out (ven’cher bi’out’) noun. The purchase of a technology business from a parent company, and the subsequent rebuilding of that business into an innovative and profitable enterprise. Involves risk of capital and substantial changes to the business to improve management and operations after acquisition.