Don’t trade a sure thing for a gamble

A guest post, from Shawn, in response to the NY Times article titled Goldman Sachs and a Sale Gone Horribly Awry

They made two mistakes.  The first, and smallest, was paying $5M to GS without understanding what they were getting in return.

The second, and major mistake was doing an all-stock deal.  Or else, in exchange for stock, they should have granted an exclusive license instead of selling the technology outright.

Frankly, I side with GS.  They hired GS to make a deal and GS made a deal that they accepted.  The fact that the deal turned out to be a bad one is not the fault of GS.  That whole due diligence kerfluffle is what you, yourself, would call 20-20 hindsight.

My point::  An existing product is a mostly sure thing and stock is a gamble.  You don’t trade a sure thing for a gamble.  You might trade a mostly sure thing for cash and a small wager.