The Stunt That Sold a Company For $20M, and the Memo That Showed What It Was Really Worth

In 1998, a small software company called Elemental Software had one instruction from its CEO: sell the company, quietly. Nobody on the team had done an M&A deal before. Nobody knew how to get in front of the right buyers. So they picked the strangest possible route: comedy.

Matt Lerner told the story at BoS Europe 2026. Elemental Software made a WYSIWYG website builder, drag and drop, connect to a database, right in the middle of the dot-com boom. The CEO hired a professional comedy writer and sent Lerner’s team to executive conferences to perform fake product demos in front of the room’s most important investors, on the theory that laughter would translate into offers.

The first attempt was Atonement.com, a fictitious confession website where visitors could enter their sins and receive an appropriate penance. They performed it straight after Steve Forbes, then running for the Republican presidential nomination, used his dinner speech to describe an abortion procedure in graphic detail. “Worst warm-up act ever,” Matt said. The room was tense enough that the comedy demo landed hard. It got laughs, business cards, no offers.

The second attempt raised the stakes: a fake site where you could start your own religion, complete with two original songs from a hired composer and a professional singer performing live on stage. Again, the room loved it. Again, nobody bought the company.

The third attempt is the one that worked. Matt’s co-founder, Peter, went through the attendee list ahead of time and built the demo around the people in the room, giving investors like Mary Meeker and Vinod Khosla actual speaking parts in a fake IPO pitch. After the show, the chairman of the board of Macromedia walked up to Peter and said, “We’re actually looking to buy a company in your space. Can we talk?” Negotiations followed, backed, by Matt’s account, by nothing more sophisticated than a yellow copy of Negotiating for Dummies on Peter’s desk. The deal closed at $20 million.

That would be a fine story on its own. What makes it worth telling is what happened next. Matt joined Macromedia as part of the acquisition and was handed a cubicle previously occupied by someone else, complete with a shelf of abandoned binders. Cleaning them out, he found a board memo: the proposal to purchase Elemental Software, authorizing Macromedia to pay up to $78 million. His company had sold for roughly a quarter of what the buyer was prepared to spend.

He told Peter that night at dinner. Peter’s reaction was one word, followed by stuffing the memo into his laptop bag and telling Matt never to mention it again. Matt kept that promise for 25 years, until he caught up with Peter over the most recent Christmas and got released from the arrangement, on the condition that he tell the whole story, memo included.

The lesson isn’t really about comedy demos, though those clearly worked as a way to get noticed in a room full of people who’d seen every standard pitch before. It’s about the gap between getting a company bought and getting it bought for what it’s worth. Differentiation, memorability, and nerve got Elemental Software an offer that a conventional sales process hadn’t produced in two prior attempts. None of that told the team anything about how much room the buyer actually had. Only a forgotten memo in an old cubicle answered that question, and by then the deal was already signed.

Watch Matt Lerner’s full talk to hear the whole thing, including the specific line that made Peter swear him to secrecy.