**dot.com Flashback**
The current AI financing environment gives me some serious dot.com flashbacks.
In 1999 another company wanted to discuss buying my company. We were both selling Internet access, building web pages and online shops, and doing what was then considered “cutting edge” technology.
We already had some commercial ties with them, and they had just been bought by a large investor. After that, they approached us to see whether we would be willing to join the club. Because of those existing ties, we sent two of the five owners to the meeting. I was one of them.
That meeting turned out to be one of the most surreal experiences of my life. They wanted to buy us to **increase** their cash burn rate, since, as they explained, “the valuation of a company is higher if it burns more cash.” My comment that we were actually earning money was met with: “I guess you can fix that.”
When I asked about their concept for integrating our company, their reply was (and I am not exaggerating): “Here you see our current org chart and as you notice, we have two free slots there and there.” That was the entire plan. They only had positions for the two people sitting in the room. We were not a big shop, just twenty-something employees, but this was utterly absurd.
The meeting went on like this for another hour. Afterwards we decided not to pursue the talks any further. We rated the chances of ever seeing the money they promised as pretty slim. They wanted to pay in stock with a two-year mandatory holding period.
It did not surprise us that they folded less than twelve months later. Their CEO, who didn't attend that meeting because we were too small a fish, eventually ended up in prison for an impressive list of crimes.
