Now, with share prices on the floor, the boards of these companies are growing more receptive to offers they spurned just months ago. Robertson, a veteran investment banker, looks for companies generating cash. None of the deals involved Seattle-area companies. Buyouts aren't a new strategy. The last time they were in vogue, in the late 1980s, corporate raiders used borrowed money to launch huge leveraged takeovers.
Transactions are a little different in today's Internet world.
For one thing, most of the stock in these small companies is held by executives and venture backers. That makes it nearly impossible for outsiders to buy a controlling stake on the open market. If they try, the buying is likely to send such stocks skyrocketing. Secondly, buyout firms look for companies that are actually making money. The LBOs, or leveraged buyouts, of the 1980s targeted businesses that generated cash.