The founders of the Dragon speech recognition software company got an invisible handslap:
And yet, even today what happened next to the Bakers seems remarkable. With Goldman Sachs on the job, the corporate takeover of Dragon Systems in an all-stock deal went terribly wrong. Goldman collected millions of dollars in fees — and the Bakers lost everything when Lernout & Hauspie was revealed to be a spectacular fraud. L.& H. had been founded by Jo Lernout and Pol Hauspie, who had once been hailed as stars of the 1990s tech boom. Only later did the Bakers learn that Goldman Sachs itself had at one point considered investing in L.& H. but had walked away after some digging into the company.
Remember this story the next time someone tries to tell you that Wall Street encourages entrepreneurs. This smart couple started a company in their kitchen, built it into an industry leader, turned to Goldman for financial advice, and Goldman sold them off to a company they knew had serious problems.