“Have gun, will travel, reads the card of a man.” Ajax was dressing in the Y
locker room when he heard the refrain. It trailed off, repeated, circled back on itself:
“...soldier of fortune... hmm hmm, man called Paladin.”
Paladin? A memory jogged his circuits, a show from his parents’ days. He
pulled on his jeans, trying to keep the frayed bottoms from catching on something
and further unraveling. “... his fast gun for hire heeds the calling wind.” He pulled
his dulled purple tee shirt over his head. Looked around. Against the back wall,
where the lockers were a darker beige, the singer, an older man with the
compression under his rib cage that showed he was fighting love handles below,
was slowly dressing, halting with each new burst of lyrics, as if the act of singing
them subsumed lesser tasks. He was oblivious.
“... a knight without armor in a savage land.”’ Ajax put his workout shorts and
bleach-spotted brown tee shirt into the red bag that was a giveaway at a friend’s
son’s bar mitzvah. Pulled on his now gray canvas sneakers, noticing the heels
peeling off, but still with some life in them. “...where do you roam?” Tossed his
towel in the bin, from twelve feet, swish! “Soldier of fortune... far far from home.”
The subway noise seemed to accentuate the rhythm. That intrigued Ajax,
how the mind organized information. On his way downtown, he thought of a
composite structure that would introduce a data stream and then incrementally -- to
the human, subtly -- reinforce it. Cool. “...where do you roam?”
Cabalistics was housed in anonymous office space downtown, near the stock
exchange. High contrast to high tech, but cheap. Ajax was the IA, the Information
Architect, establishing the structures within which Cabalistics presented its
products. He existed sideways to the engineers and developers, who implemented
his visions; he was a necessary stepping stone for the marketing people, master of
the build, valve on the pipeline, driver of the roadmap. And he owned 5.62% of the
Company. Post dilution. His friend Jay, whom he’d worked with at Jay’s last startup,
asked him to help create this new one. Eleven million dollars had been invested in
Cabalistics, and he owned 5.62% of it.
Virtuous, man, totally virtuous.
* * *
“They passed?” Jay squirmed for the first time in the process.
“Weren’t convinced of scalability,” Nick said, “didn’t think enough people
would be interested to go huge. Said we were a feature masquerading as a system,
should try to exit now to a big player.” The people at Martins Gehring Capital were
his contacts from when he was an SVP at Atari. After several meetings and
conference calls, he had thought they were going to close a funding round with
them.
Jay, the Founder, had raised the first two rounds for Cabalistics, four million
and seven million. But late in the burn through of the seven million the investors
finally became troubled by too many months of missed targets, a burn rate that was
eating over $400k a month and revenues that were barely a blip. Investors don’t
have much middle ground, the pendulum swung all the way over. Jay, who first
walked on water couldn’t get out of the mud. The investors brought in Nick to bump
Jay as CEO, who then convinced them to keep him on as VP Biz Dev where he could
use the visionspeak he’d articulated to lever all that cash to try to enter into
strategic partnerships and customer acquisition deals.
A Founder often has to step aside. Jay accepted it -- since they were ready to
dump him, VP BizDev was the better choice. He and Nick developed an acceptable
relationship, blotted only when Nick erupted over the intransigent costly
infrastructure Jay had put in place. And the lack of revenues to offset it.
“But we’re so close, ready to launch the premium version, now’s not the
time...”
Jay had a way of talking, fast, flat-toned and sounding like he was on top of it
all, there was no comeback to it, until later, when reflection pierced the wall of
words with reality. Nick had bought into Jay’s articulations, which had stayed his
hand every time he wanted to let go of a developer, a programmer, a QA reviewer, a
Ruby on Rails specialist. He was never quite sure why they needed both an
Information Architect and a VP of Engineering. Since Cabalistics was founded three
other companies had hit it big with variations on the interactive media creation
space. Six had died; Cabalistics had even bought one of those, just by assuming their
credit card debt. It made for a good press release. Jay’s original premise was that
they’d go heavily viral, like YouTube, with strong ad revenues; with that not
working, he’d switched to pitching a freemium model, offering a downscaled free
version to attract people who would then buy a Premium version of the product.
The current version of the premise of the 2000 Internet bubble: if you build it they
will come. The VC’s congratulated themselves on all they’d learned from ten years
ago. And invested, again.
Now Nick was just growing tired of all the words, quick and clever as they
were; tired, and fearful. To get Nick to come over, Dreadnaught Capital , the lead
investor, having taken control of the company in the Series B round, committed to a
bridge loan of six hundred fifty thousand dollars, as a line of credit that Cabalistics
could draw down from as needed. That, they avowed, would give Nick ample
runway, enough time to raise additional funds before they hit the dry well date.
They gave him a serious equity package to come on board, options for eight percent
of the issued and outstanding shares, which seemed great when the Preferred was
priced at fifty-seven cents a share and even a modest tick would net him millions.
But now.
“Still have two firms we’re in the running with.”
Jay thought he would have done a better job presenting the Company than
Nick, since he’d raised all the earlier money. Nick knew better, it now needed more
than fast brilliant talk. Jay disassociated himself from the Company’s current issues,
as if they had been created by someone else. He took pot shots at the marketing
team he’d hired, forgot the eighteen fruitless months the former VP of product
development had wasted until he finally, under pressure from the Board, fired her.
He thought his staying with the Company vindicated him, didn’t get how
exasperated he had driven the Board, and Nick. But they were both working all
their contacts, as were the Series A and B investors.
It was down to two live ones.
* * *
It was beautiful. Just beautiful. There, on the screen, the culmination of
months of work. A perfect blue sky.
Not just a sky, not a mere everyday simply real sky. It was a six layer deep
canvas that would enable users to build a pastiche of images, picture, videos,
sounds, drawings into their own multi-parallel non-linear sequencing hi def super
resolution 3D full screen creations. Ajax roosted in a corner of the office, barely
visible, surrounded by a high wall of large computer monitors, which he played like
a keyboard, each with a different layer of the image. He stared at the sky, could see
it populated with the imagery of the world, one at a time, each unique, an irresistible
expression of the creator’s will and imagination, with an extensibility that was new
in the universe. His. Beautiful, and virtuous. Every soul a creator.
But it had to be easy to use, easier than it was now. Which was why it hadn’t
been released seven months ago as originally scheduled. His architecture was
awesome, huge, but cumbersome. Internet users expected something to be easy,
quick and responsive. Or they walked away, on to the next site. But they were the
customers of their collective future. He got impatient with the unwillingness of
users to put some effort into learning. Netulance, he called it, the petulance of the
easily distracted, volatile walkabout online audience. Netulant to a fault, netuland
the place he had to occupy.
* * *
He was drying off after the steam bath when he noticed the guy against the
far wall, naked except for his shoes and socks. Long dark blue socks, wide, drudgy
cordovan shoes. Ajax tried not to peer -- it was a Y locker room, after all, for all the
upscale trappings. Populated by old men with wrinkled skin hanging from their
arms in search of tauter days, endlessly talking baseball, next to super buffed black
guys with arms as thick as his legs. He twisted around so his normal line of sight
kept the guy in view. Wondering how it would play out.
The guy was on the downside of his fifties, tall, rounded but not flabby. He
put on his striped brown shirt, then pulled his plaid boxer shorts over his feet, one
at a time. But the pants, Ajax wondered. How would he deal with them? Ajax
slowed his pace, extra drying, a search through his bag to check his cell phone,
slowly put on his clothes, barefoot, watching.
The guy sat down on an old wooden stool; Ajax shunned them in favor of the
green plastic ones, no grain to house the germs. He held gray slacks, normal looking.
The prospective topology fascinated Ajax. The guy rolled up the right leg into a
short stack, then carefully started dragging it past the sole of his shoe, inching and
scraping it over the heel, nibbling up the back, edging it, pulling it ring by ring until
he got the whole shortened leg over the shoe, and unfurled it to his waist. Ajax
caught himself staring, but the guy was far too intense to notice, his choices dictated
his focus. Why? Ajax wondered. Maybe he was deathly afraid of athlete’s foot? Ajax
couldn’t figure out individuals, only the statistical behavior of populations. As Ajax
slipped on his faded burgundy tee, the guy started on the left leg, which seemed to
give him a bit more trouble rounding the heel. Ajax walked out; both towels in the
bin from sixteen feet. Virtuous.
He headed uptown today, not down. It was all going so well. Nick and Jay
were out raising more money, like they always did, so they could complete the top
routes of the roadmap, enough to bring it to market, just a few more months. It
would be irresistible, totally virtuous, it would go viral, huge. Internet lightning,
destined to strike.
He’d never been in Tiffany’s before. But when he put out the query, all the
Social Networks indicated it was the place, Facebook, Twitter, even Devo-lution, for
developers only. He and Cyrena had been sitting in her doctor’s office together; she
was going through the pages of one of those ultra thick women’s magazines he
didn’t actually understand, when she gave a little gasp. He looked over her
shoulder, and saw a string of pearls, but they weren’t white. They were a deep gray,
almost black, and even in the picture the light’s tiny round circle in each of them
seemed deeper than the pearl itself.
He looked at her. “Black pearls,” she said. “So beautiful.” Women knew
things Ajax wasn’t even aware existed. Maybe because she was part Asian helped.
With soft contours in contrast to his sharp angles.
“Black pearls,” he said to the guy behind the counter. Stephane. Stephane
was taut and snazzy, a tight-fitting lustrous blue suit with embedded lines in it, crisp
white shirt, the kind of red tie worn by politicians for debates.
“Black pearls, sir?”
“Yes, I’m interested in getting some for my girlfriend.
“Well, you’ve come to the right place.” A few years ago Stephane would have
given Ajax the once-over -- jeans shredded at the bottom, a faded purplish T-shirt
with some white spots on it, an ancient scuffed gray backpack, deep dark rings
under the pale skin around his eyes -- and tried to move him out of the store. Those
trappings would be okay at Brooks, which had a history of taking slumming preppie
kids, but that was just for the price of a suit. But now, who knew what dot.com
wealth had miraculously landed in that stuffed backpack.
“Our pearls are all certified genuine, cultured South Seas or Tahitian.
Nothing from China or Japan, or colored in any way.”
“Cultured?”
“Well yes, only white South Sea pearls are diver harvested now,” Stephane
dripped. He couldn’t help himself. They walk into Tiffany’s and think they know
anything. Because luck had descended on them in preposterous proportion.
“Great, great,” said Ajax. “Let’s look at some.”
Stephane walked Ajax over to another counter, went behind it, reached down
and pulled out a case with several strings on it.
First hand, they weren’t quite as dramatic, but had even more shades and
depth. He picked up a medium length string.
“This is extraordinary, a very important piece,” Stephane said. He cradled it,
letting it run like a snake around his palm, sparkling and smooth.
“Most virtuous,” Ajax said. “Can I ask...”
“One hundred seventeen thousand five hundred. A very fine price, would
have been more a year ago, and they hold value very well.”
Ajax was the unflappable go-to guy at Cabalistics, and he had it in hand. He
just smiled, maybe a bit more broadly. “Maybe something...”
“I understand,” said Stephane. Happily.
He ended up with a pair of earrings, each cool to the touch, slightly irregular
and striated, lustrous, with a tiny diamond above it. At five thousand five hundred,
it was five thousand four hundred fifty more than Ajax had ever spent on anything
other than a piece of technology, including the tiny gold circle in his own left ear. He
clutched the small light blue box, stuffed it in an inner compartment of his backpack,
declined the bag. It was Cyrena’s birthday next week, he owned 5.62% of the
Company, and this was his time.
* * *
“You’re reneging?” Nick’s voice rose.
“No, we’re not reneging, we’re just not proceeding with the funding,” Shana
said. She was a junior partner at Dreadnaught, sat on Cabalistics board.
“But, you made a commitment, signed the papers, it’s not conditional, or we
couldn’t have used it to--“
“Nick, you know we just did that to cover the StratusWear covenant.”
“No, I don’t know that.” Nick was still trying to wrap his mind around what
they were saying.
Cabalistics had cut a deal to supply a version of its program to StratusWear,
wrapping it in a co-branded skin, so each company’s logo and links appeared on the
page, with a unique border to distinguish it. They used it to show what different
clothing options would look like on a person; users uploaded their picture onto the
site as a base layer to play with. Part of the deal was that StratusWear,
understanding the ways of startups and the risk of building a key component of
their site around the program, demanded a covenant in the contract that they be
notified if Cabalistics’ cash dropped below six months before they ran out. For a
while they’d put off notifying by using Jay’s aggressive near term revenue rampup
projections. When actual revenues came in a lot lower, Dreadnaught executed
agreements to provide the six hundred fifty thousand dollar Line of Credit as a
bridge. By treating the L.C. as cash, they forestalled having to notify StratusWear.
“Nick, we only made that commitment to push out the drop dead date, we
figured you’d get in other financing and we’d never have to fund. Without other
investment, we don’t want to be pushing more money down the hole. You haven’t
gotten the burn rate down to anything close to sustainable.” Alan Courtle ran
Dreadnaught, never attended Board meetings or got involved in the Company. Until
now. The smile he now pasted on was more a sneer, Nick thought.
“Then we have to notify StratusWear immediately.”
“Fire some people,” Shana said.
Nick stared out the window of Dreadnaught’s new midtown offices, forty
seven floors up with fantastic views of the Hudson River and the lands beyond.
Shana had never worked in an actual operating company, she’d started as a junior
analyst with another firm and moved to Dreadnaught eight years ago. Nick stifled
the urge to tell her what she didn’t know and never would. Everybody who knew
Nick liked him, spoke well of him, his fundamental decency. He worried that that
was why he was not succeeding.
“If we do that, it will seriously slow down the build, delay the launch of the
Premium product.” Nick heard himself echoing Jay. In truth he was never quite sure
why it took so long to get anything out. Jay said it was Ajax’s proprietary
architecture, built from the ground up so they could transcode in any format, which
made them the tech leader. Nick didn’t think anybody would be buying because
they were the king of transcoding, would have preferred something simpler, open
source, that could be brought to market more quickly, and was more adroit to build
on, instead of taking weeks just to change a web page. He now saw that they had
small company resources but a big company’s ponderousness. A fatal mix. Jay and
Ajax confounded his intentions, he’d thought he would cut sharply when he took
over as CEO, but Jay convinced him he couldn’t. Now it was too late, cutting
wouldn’t have much impact on when they ran out of money, not enough months left
to make a difference, he was trapped in a quagmire. In these investor meetings he
had to recycle Jay’s words, sounding hollow to himself.
“Fine, but that will only buy a few weeks at this point.”
“A few weeks is good,” said Alan. “A lot can happen.”
* * *
“Not good news from Cyprus Capital,” Nick said.
Jay looked stricken. “What?”
“They said we needed to demonstrate more traction with the user base.”
“But that’s the point of this round, get to the next build. And we have
Stratus.“ It was the one biz dev deal Jay had closed.
“Problem is Stratus isn’t pushing it yet, it’s not high on their development
cycle. So we’re not seeing good numbers. I told them that we’d launched -- finally --
the prosumer product, were attracting high end users who’ll pay more for cutting
edge top quality functions. But they said that might just be a niche market of early
adaptors, with no scalability to mass at a profitable customer acquisition cost point.”
“I really thought they were coming in, after the third meeting.”
“I think Danny would have done it, but when he presented to his partners,
they shredded it.”
“Can we...”
“I already sent them a note, but it’s over. If this were a Series A or B, they
would have come in. But for a third round, with nearly eleven million spent, they
wanted to see more progress.”
Jay used to joke, when he started up his last company, that the easiest times
to raise money were when you were just promising something, an idea, or when you
had delivered and had customers and revenues. It was the in-between times that
were the toughest. He was caught in the in-between time. He’d been okay when the
investors brought Nick in; he still had 17.13% of the Company. Granted it was
common stock, sitting behind eleven million dollars of preferred, the second tranche
of which had a 3x participating preference, the investors in the Series B would get
three times their money back before anybody else saw a dime, so that Cabalistics
would have to sell for over nineteen million before he started seeing anything. But
like he told Nick with the technology platform alone they could get close to that, and
once they had a user base they could get up to over thirty. That would net him over
four million, which was just fine with him, didn’t need to be Google or Facebook
money, four million would let him do what he wanted, self-fund his next startup so
he didn’t have to manage to investor expectations. He had 4.32 million shares; they
just needed to raise this money, and even a modest price at the exit would set him
up.
It was all fading away.
“ We should talk again with those guys Google bought last year, Movomatics,”
Jay said. “They showed some interest for a while, then we got the L.C. and let that
drop.” He was about to go on a roll, convinced of the irresolute logic of his
assessment of others.
“About the L.C.,” Nick said.
* * *
Talk about getting blindsided, Ajax thought. He was in the steam room at the
Y, relaxing it out. He sat against the back wall, put one stool in front of him and put
his feet up on it. Felt the warmth soak in after his work out; it was all good.
A guy walked into the steam room, leaving the door open longer than
necessary. Ajax was about to say something, about keeping the heat in, when he saw
the guy was using a cane to walk, tapping the floor in front of him. Oops, keep that
in, he thought.
The guy was walking straight towards him. “There’s an open stool to your
left,” Ajax said. But the guy seemed on a track that ended with Ajax’s feet on the
stool in front of him. He bumped into Ajax’s legs, so he pulled them down as the guy
sat on the stool in front of him. Ajax laughed to himself, it was so ridiculous. Time
to get out anyway. Not good to overheat.
* * *
“I told Shana not to reach out to them, but she insisted.” Nick and Jay were
shaking their heads, still not believing it.
Beaumont Ventures was interested. They were dealing with a standup guy, a
VC star, Mohav Ahdami, smart, solid, not like, say, Alan Courtle. Mohav had said
they’d get a decision this Friday, which still left them some room to fund the next
payroll, since Courtle had indeed pulled the L.C., despite having signed an
irrevocable commitment to fund, and his promises to Nick, and the rep to
StratusWear and... Nick stopped himself, he’d gone down this road so many times he
couldn’t see over the ruts.
But Beaumont would have been perfect, six million in. It would have been a
cramdown, Dreadnaught and the early investors would take a huge hit on the value
of their investment, but it would keep the Company going with a chance to make
some modest return. Jay didn’t care, because they’d worked out a management
carveout that would give him, Nick and other key people a percentage of whatever
they got on exit, from selling the company, as a priority payment before the
investment started getting a return. It was no longer about how much of the
Company he owned, but just the percentage of the carveout. Nick would also do
okay, so would Ajax.
Yesterday Mohav said that his partners’ meeting had to be put off for two
weeks, people were traveling, so they wouldn’t have a decision about the financing
until the start of next month. Nick was fine with it, since all the feedback was so
positive, it was a normal part of the process.
But Shana freaked out. Meaning that Courtle had slammed her. They
couldn’t wait that long, it would mean that by the time they could make a decision to
shut down, their would be an additional month of obligations to the employees and
under various contracts that the investors would have to fund, as they were liable
for them given their control of the Board.
“You can’t set other people’s agendas,” Nick repeated to her.
“It’s unacceptable,” she said. She had a slight lisp when she got agitated, her
lips ran into each other as if they were trying to get somewhere else fast. Nick had
once started telling her about a trek he’d done and she’d interrupted to go on at
length about how she could never be away from a bar for that long a period of time,
hah hah hah.
“That’s their timeline, there’s nothing--“
“You have to call them, tell them we need a decision this week.”
“Are you... Shana, how would you feel if you were told that by somebody
looking for financing? You know you’d pass.” He tried to slow down, when he got
stressed, he tended to stutter, his voice would rise in pitch and he seemed almost on
the verge of tears.
“You have to call them, tell them.”
“If I do that--“
“Alan says we can’t wait that long, you have to call.”
So Nick made the call, tracking down Mohav in London, who couldn’t quite
believe the conversation, he’d known Nick for years. He said he’d contact the other
partners and get back to him quickly, which he did. They passed. Sorry, just didn’t
feel right. They looked at over two thousand deals a year, and the less plain vanilla
one was, the less likely they were to fund. Nick knew that. Somewhere, Shana also
knew.
“That leaves Movomatics,” Jay said. He’d kick started the conversation with
them, and they were in fact interested. “Just them.”
* * *
When StatusWear got the news Cabalistics had less than two months runway,
they were pissed, and Nick took the brunt of it. No way to explain how the four
months covered in theory by the credit line had evaporated. So what if Nick had
come on board in part because of Dreadnaught’s commitment? So what if Nick was
more distressed about it than they were?
Sensing they were losing support for the Cabalistics platform, StatusWear
started searching for a new provider. They reached out to Movomatics, who were
very interested to hear about Cabalistics’ status.
* * *
Balthazar was the best place to give her the pearls. He’d checked around,
cross-referenced Yelp, Urban Daddy, Zagats.com and Menu Pages, went through the
Eater blogs. It was lively, fun, big but intimate, noisy in the right way, full of life. It
was going to be great, she’d get up at some point, or he’d distract her -- check out the
oyster bar, perfect! -- and he’d slip the little blue box on her plate. Beyond virtuous,
man.
* * *
“Shutting down? What are you talking about?”
Nick and Jay had called Ajax into the front conference room.
“Jax, we have to do it now, for an orderly winddown, meet current legal
obligations,” Jay said.
“You guys were going to raise money, we’re so close on the next build, to the
release.”
“We couldn’t bring anything in,” Nick said. He didn’t see any reason to tell
Ajax about the fuck-ups with Beaumont, and Movomatics, about no traction and
questions of scalability. Ajax lived in his office corner nest, where all the monitors
filtered the world.
“But,” he turned to Jay, “you’ve always raised the money before.”
Jay said, “I couldn’t do it this time.” Ajax turned to Nick.
“We ran out of time, if we’d gotten the release out when we said we would...”
he trailed off. What was the use? Ajax glared at Nick; Jay had always raised the
money, before. There’d be no next build. Ajax was still tinkering with the image
capture infrastructure. No getting to market. No launch. No Internet lightning. No
glorious exit.
* * *
“Hey big spender, what’s the occasion?”
All Ajax had told Cyrena yesterday was to meet him on the corner of Spring
and Crosby, and now they were seated under the etched glass partition in a booth at
Balthazar, bursting with energy and money.
“Just, we’re together, don’t need more than that.”
“Well aren’t you full of surprises.” Cyrena glowed in the light. Ajax fingered
the tiny blue box in his pocket. All of his plans inside of it.
She looked around, at the far wall that was all bottles, at the bustle of so
many waitresses in black, at the orange necks of so many bottles of Veuve Cliquot in
glistening ice buckets next to so many tables, at the raw bar in the back, piled with
so many oysters on so much crushed ice, kumamotos and peconics, blue points,
fanny bays, wellfleets and yaquinas, malpeques and dabobs, while Latino men in
white jackets behind the bar deftly opened them by the dozen.
“Oh, let’s get oysters,” Cyrena said. “Lots of oysters.”
He clutched the blue box in his pocket, as if he would find another solution.
Let it go. Looked around the room, that he had almost joined.
“Maybe one of them will have a pearl in it,” she giggled, with the first sip of
the champagne.
* * *
Nick just reported it. “So, Jax, Movomatics will acquire some of our assets,
take over the Premium users, we’re giving them the patent rights, they’ll pay off the
winddown costs.”
Ajax shrugged. “And they want to take you and two of your team with them.
To support transferring our platform to their site, integrate the functions. Down the
road, who knows, they’re really on the move.”
“Really? And you guys?”
“They don’t need us, just you and your team.”
The blue box was still in his backpack, he hadn’t returned it yet. He thought
for a moment, lit up. “They’re going to need a proprietary architecture,” he said.