Bill Gates Sr. helped Howard Schultz keep his bid to acquire Starbucks on track in 1987 by intervening when a competing investor tried to outmaneuver him. Schultz later recalled that Gates Sr. confronted the investor and promised that he and his son would help. Starbucks’ official history says Schultz’s company, Il Giornale, ultimately acquired the Starbucks name, roasting plant and six Seattle stores for $3.8 million. The available accounts do not establish that Gates Sr. personally provided the purchase money.
What Bill Gates Sr. did
Schultz’s account, reported by GeekWire in 2020, describes Gates Sr. as an advocate who stepped in during a dispute over the sale—not as the documented source of the acquisition’s financing. Schultz said a young lawyer friend introduced him to Gates Sr., then a senior partner at a law firm. After hearing Schultz’s situation, Gates Sr. walked with him to confront the competing investor.
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As Schultz recalled the exchange, Gates Sr. told the investor: “You should be ashamed of yourself. This is not going to go down. You are going to stand down. And this kid is going to realize his dream.” Schultz also recalled Gates Sr. telling him: “You’re going to buy the company and my son and I are going to help you.” These are Schultz’s retrospective recollections, not dialogue preserved in a contemporaneous transcript. GeekWire’s report recounts the story.
How the 1987 purchase unfolded
Schultz’s coffeehouse plan
Schultz joined Starbucks in 1982 as director of operations and marketing. After becoming interested in Italian coffee bars, he left and started Il Giornale. Starbucks’ official timeline places his departure and Il Giornale’s founding in 1985. Il Giornale was Schultz’s effort to bring the Italian coffee-bar experience to the United States.
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In March 1987, Starbucks’ original founders were ready to sell the company’s name, roasting plant and six Seattle stores. Schultz and chief coffee buyer Dave Olsen had opened three Il Giornale locations. The founders had concentrated on selling arabica beans and did not want to shift the business toward cafés, according to Starbucks’ historical account.
The fundraising deadline and competing offer
Schultz had 60 days to raise the money, according to GeekWire’s account of his retelling. At the end of the first month, he had half the amount he needed. An unnamed investor in his earlier coffee company then made a competing $4 million offer. GeekWire does not identify that investor, so the identity should not be inferred.
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- A Starbucks Card is Always Welcome
- Starbucks Cards redeemable at most SB locations
- It’s a great way to treat a friend. It’s a convenient way to pre-pay for your own regular purchases.
- Amazon.com Gift Cards cannot be used as a method of payment for this item.
- No returns and no refunds on gift cards.
The deal closed
By August 1987, Schultz had raised $3.8 million. Il Giornale acquired Starbucks’ assets and adopted the Starbucks name. Starbucks describes the transaction as an asset purchase: the name, roasting plant and six Seattle stores transferred to Il Giornale. That distinction matters; the deal was not simply Schultz buying an intact version of the modern corporation. The company’s official timeline documents the purchase price, assets and change of name.
Did Bill Gates Sr. finance the Starbucks purchase?
The sources establish that Schultz raised $3.8 million for the purchase, and Starbucks says he had support from local investors. They do not establish that Gates Sr. personally contributed any of the purchase price. Schultz’s recollection that Gates Sr. and his son would “help” does not specify a financial contribution. The best-supported description of Gates Sr.’s role is that he used his stature to intervene in the dispute and encouraged Schultz’s bid.
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Why the intervention mattered—and what it did not mean
The intervention helped preserve Schultz’s opportunity to acquire the assets and pursue Il Giornale’s coffeehouse vision under the Starbucks name. The transaction connected an existing coffee-bean business to Schultz’s café-focused direction. It does not show that Gates Sr. designed Starbucks’ later business strategy or caused its subsequent growth; the documented role in this episode is advocacy during the sale.
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- A Starbucks Card is Always Welcome
- Starbucks Cards redeemable at most SB locations
- It’s a great way to treat a friend. It’s a convenient way to pre-pay for your own regular purchases.
- Amazon.com Gift Cards cannot be used as a method of payment for this item.
- Physical gift cards are delivered active via mail.
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