A fascinating story in The New York Times explains the tale behind the demise of Dragon Systems, created by vocal and mathematical experts James and Janet Baker.
The short version is that Mr and Mrs Baker were becoming so successful with Dragon Systems and its voice recognition technologies and software that it was even getting unsolicited buyout offers.
The Bakers retained Goldman Sachs to help them make a sale, paying them $5m to do so, but the allegation is that Goldman’s group of four advisors were hopeless and guided the Bakers to a very bad deal with Lernout & Haupsie (L&H), which collapsed due to fraud.
The assets were then purchased by Scansoft, which renamed itself at Nuance, with Nuance now a multi-zillion dollar company providing speech technologies to many companies – including what is believed to be Apple and Siri.
Instead, it looks like the Bakers have been left with a lawsuit against Goldman Sachs and little else, along with the threat of a loss against Goldman even though the Bakers appear to be unfortunate victims.
It makes you wonder why Nuance might have jobs for the Bakers, seeing as they were the people behind the original technology.
The NYT story is definitely worth reading as it goes into stunning detail on what happened, with the story still to be legally resolved.
Ultimately, however, it might make a few companies think twice before deciding to both go public, and rethink whether retaining fancy shmancy banking firms for advice is such a good idea, or not.