Clearly there were many reasons, some of which I listed here, but it is very interesting to see the rationale provided by angel investor here:
Stefan Glaenzer is looking for his third hit, although the German angel investor, now based in London, cannot complain so far. He made several million selling his share in Ricardo, the internet auctioneer, to QXL in the first dot-com boom and later used some of that cash to invest “a few hundred thousand” in 2004 into the internet radio service Last.fm, which turned into £22 million on its £140 million sale to CBS this month.
Mr. Glaenzer concedes though, that the decision to sell out was not his own – a reminder perhaps that angel investors, however engaged, ultimately have to take a back seat when the crucial decisions are taken. There was “an approach about once a month for the last 12 months” as Last.fm began to generate a buzz in the press, and the number of registered users climbed to 20 million.
“All of them were US companies; it reflects the fact that Europe is two and a half years behind the US,” Mr Glaenzer says, although he is coy on names, other than confirming that there were some half-baked discussions with CBS’s sister company, Viacom, which never got anywhere despite rumours of a $450 million bid.
Mr. Glaenzer wanted to raise another £10 million and carry on, but was outvoted. “CBS just wanted to carry on doing what they were doing, and they came up with a great price,” he says. “I’m not saying News Corporation [parent company of The Times] approached us, but if they did, they would want to make us a part of MySpace – CBS didn’t have a big digital business.” With CBS in charge, it is time for the money man to get out because the broadcaster can provide the commercial expertise now. “
I certainly can appreciate the independence some acquirors provide is a key selling point, but there is merit to folding operations in a larger grid, sometimes the strategic value supercedes everything else. In the case of the Last.fm guys, hearing Quincy Smith coming across like the anti-Ross Levinsohn (not meant in a bad way at all, just matter of factly about Levinsohn pushing News Corp.’s mantra, which given its enormous push into all things digital makes sense to craft everything around MySpace) must have been too good to pass up.
Oh, the $280M probably helped too.
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