Final Venture

21

Tetracom were making their presentation at three o'clock that afternoon. I had to be there. I arrived at the office at one o'clock, hoping for a quiet spell over lunch when I could talk to John. But he was out at National Quilt in Lowell.

Bob Hecht and the Tetracom management were slick. They had been to business school, they had made countless big-company presentations, and it showed. It was an interesting contrast with Craig's raw enthusiasm and absolute determination. I wasn't sure which approach I preferred – probably Craig's since it personalized the struggle. But Tetracom's method was tailor-made for a venture capitalist's investment committee. Even the bust of Paul Revere seemed to be listening in respectful silence.

Everyone was there apart from John: Gil, Art, Diane, Ravi, Daniel and me. Of course Daniel and I didn't get to vote. Art had arrived late back from lunch, a glassy look in his eyes.

When Bob Hecht finished, Diane thanked him and asked for questions. I checked Art, but he seemed absorbed in the bottom right hand corner of his yellow pad. Gil asked an obscure question about consolidation among Tetracom's customers leading to stronger purchasing power on their part and lower margins for suppliers. Hecht had a good business school answer; with a small smile I imagined what Craig's response would have been – 'Huh?' Ravi asked about threats from Far Eastern manufacturers. Daniel asked about the risk that the stock market might become fed up with communications stocks by the time Tetracom wanted to float. All good questions, all answered well. Diane looked pleased.

Daniel was just beginning to ask a follow-up question when he was interrupted by a low growl. We all looked towards Art, who was drawing ever thicker lines along the bottom of his pad, as though he were crossing something out.

Diane raised her eyebrows to encourage Daniel to continue speaking. Then Bob Hecht blew it. He smiled towards Art. 'Yes, sir?'

He probably thought he was being smart, bringing in all the decision-makers, getting their objections out into the open. He wasn't.

'Huh?' said Art, looking up as though he had just been woken. His eyes, which had been dull before, now glinted dangerously out of his red face.

'Do you have a question, sir?'

Art cleared his throat. 'Yes, I have a question.'

'And what's that?' Hecht's eagerness was wearing thin. Diane looked on in something like panic.

'Why does a chicken-shit company like yours have the gall to ask us for money?'

Art!' snapped Gil.

'It's a fair question,' said Art. 'Answer it.'

'We believe that we have a unique…'

'Don't worry, Mr Hecht,' interrupted Gil. 'Art, I'd appreciate it if you asked a more specific question.'

Art looked at Gil. Looked at Hecht again. Smiled. 'OK,' he said. 'How many venture-capital investors have you been to see?'

'You're the first ones,' replied Hecht immediately. 'We wanted to go to the best first.' Diane smiled appreciatively.

'The first since when?' asked Art.

'What do you mean?'

'Isn't it true you went to a bunch of venture capitalists last year and they all turned you down?'

For less than a moment Hecht was struck by panic. It was no more than a brief flutter on his handsome, sincere features. But we all saw it. Diane's gaze switched sharply from Art to Hecht. Gil's crumpled face crumpled some more. Art smiled.

Hecht, composed again, answered the question. 'It's true that last year, before we had a business model that was up and running, we did have a couple of informal discussions with some VCs. Just to help with our planning, you understand.'

'How many?' Art demanded.

Hecht glanced at Diane for help. She didn't give it.

'About a half-dozen.'

'I said, how many?' Art repeated.

'Let me think,' said Hecht. 'Eight.'

'Eight, eh? And who were they?'

Hecht rattled off eight of the biggest names in venture capital, most of them West Coast firms. Diane's face reddened. She should have asked these questions. And so should I.

'I see,' Art said. We waited for the follow-up question. Art seemed to sway slightly in his chair. The silence was becoming uncomfortable. Eventually it came. And why didn't you go back to these firms when you had your model up and running, Mr Hecht? Was it because you knew they wouldn't give you money in a thousand years?'

'No!' protested Hecht. He surveyed the group of venture capitalists. He knew he was in danger of losing us. He sighed. 'There was another member of the team, then. He was a kind of non-executive chairman and he was willing to provide the seed money. I subsequently found out that he was the one the VCs didn't like.'

'Oh really? And what was his name?'

'Murray Redfearn.'

Art and Gil exchanged glances. So did Diane and I. It was clear that they had heard of him and we hadn't.

'Murray Redfearn was involved in a couple of spectacular disasters in the late eighties,' explained Gil. 'A lot of venture capitalists lost money on him. Our first fund even had a small piece of one of his deals.'

Hecht nodded. 'We only found all this out later. So we bought him out, developed the product further, and here we are.'

'You lied to us,' Art said.

'No, I didn't,' protested Hecht. 'I've just told you the truth.'

'But you lied to Ms Zarrilli.'

Hecht looked shaken. 'Diane?' He glanced towards her for help.

Diane paused. She had recovered her composure now. She had a fine line to tread. She didn't want to seem weak to Hecht or the investment committee, but she also didn't want to kill the deal. 'I didn't ask the question, Art,' she said, 'and I should have. But I must admit, Bob, it would have been nice if you had been more open with me on this.'

'Damn right,' said Art. 'Now why don't we tell these jerks to piss off and let us get back to work.'

Hecht reddened. One of his colleagues, the Chief Financial Officer, looked as though he was about to explode.

'Art!' snapped Gil. 'That's enough. Thank you, Mr Hecht,' he said, with a smile. 'That was a most interesting presentation. Diane will be in touch with you very shortly.'

There was an awkward silence as the Tetracom team picked up their presentation materials and filed out of the board room, followed by Diane. She led them to a conference room, where we had agreed they would wait for the committee's decision. Diane returned in a moment.

Gil was red-faced, glowering at Art. He set great store by the image of the firm, and behaviour like Art's was not what he wanted. He no doubt suspected Art was drunk. And he now knew his drinking could do serious damage to the firm.

'Could you leave us while we discuss this deal, Art?' His voice was icy.

'No way,' said Art. 'I have strong views about this deal.'

'I gathered that.'

'If I hadn't asked the questions, you'd never have found out the answers,' pointed out Art. 'And I'm a partner in this firm. I have a responsibility to investors. I have a right to be part of its investment decisions.'

Art was suddenly sounding coherent.

'All right,' said Gil. 'You can stay. What do you want to do, Diane?'

'First I should apologize,' she began. 'I should have asked the questions Art did. Thank you.' She smiled charmingly at him. He grunted. 'I still believe in the deal, though. So I'd like to ask for investment approval subject to checking out Bob Hecht's story.'

'He could be hiding anything,' said Art.

'I think he's probably telling the truth. But it'll be easy to check with the other venture capitalists. Which is what I'd like to do.'

'I can help you with that,' said Gil. 'I'd like to hear the answers myself.'

'Thank you,' said Diane. 'Simon and I have done a lot of work on this deal, and I think it is a truly great opportunity that any other firm would be quick to snap up if they had the chance. You've seen the management, you've seen Simon's Investment Memorandum, I'd like to get your approval.'

'You're not getting mine,' said Art. 'They're liars and scumbags, and I've never seen such an amateurish piece of work in my career.' He contemptuously flicked my memo with his fingers.

'That's enough, Art,' Gil snapped. 'OK, let's take a vote. Diane, I take it you're still in favour.'

Diane nodded.

'Ravi?'

Ravi had been listening to everything attentively. He did his best to avoid political posturing, but he wasn't afraid of making a difficult investment decision. And at a time like this, an unbiased investment decision was just what was needed. He took off his glasses, and began to polish them. 'I'd like to be absolutely sure that Hecht isn't hiding anything else,' he said. And I'd like to see the notes on the calls you make to the venture capitalists they spoke to last year. But provided those are OK, I think we should go ahead.'

Art?' Gil turned to him warily.

'No fucking way.' Art stared at his Managing Partner belligerently.

That was probably his mistake. Gil was in a nervous frame of mind, and if Art had subtly played on that he might have succeeded in killing Diane's deal. Frank would have known how to do it. But Gil would not tolerate open war amongst his people. 'We do the deal.'

I followed Diane to the conference room where the Tetracom people were waiting. Diane gave them the good news, and then gave Hecht a firm but polite roasting. She was trying to assert her authority at as early a stage as possible. Hecht seemed confident that Gil and Diane's checks wouldn't bring up any nasty surprises, and on that basis we started work on the term sheet.

We broke at nine for dinner. We went to Sonsie's, a chic restaurant on Newbury Street. Diane was charming. Although Hecht and his boys were pros, I could see Diane's technique working. She used a mixture of charm and firmness to get what she wanted. Rather like a good teacher in a difficult school, she managed to inculcate a desire to please her in the people she dealt with. She had Tetracom eating out of her hand.

We left at eleven with promises to meet up again at eight the next morning. I was walking into the street to hail a cab when Diane caught me.

'Simon, I know it's late, but I'd like to go through those financial covenants again – see whether we can live with management's figures. Could you spare a half-hour to go over the numbers now? I'm sure it'll help us tomorrow'

She was right. It would. I was tired and I wanted to go to bed, but Diane was the boss, this was a deal, and venture capitalists didn't go to bed early if there was work to be done on a live deal. I wondered why not sometimes, but that was the convention.

'OK,' I nodded, 'I'll get a cab.'

'No need to go all the way to the office,' said Diane. 'My apartment is just around the corner.'

I gave her a sideways glance, which she ignored. I was too tired to argue anyway. 'All right,' I said. 'Lead the way'

It was, literally, just around the corner. The electrician's daughter from New Jersey had done well. The furniture was either expensive and comfortable or expensive, antique and European. The art was expensive, modern and American or oriental. The whole thing was all very tastefully done, and very relaxing.

'Coffee?' she asked.

'Sure.'

She dumped her copy of the base case forecast on the mahogany dining table, and fiddled about in the kitchen area. I pulled out my laptop and crunched some numbers. She kicked off her shoes and sat down next to me. The legal documentation contained a set of financial minimum ratios. If Tetracom's management broke them, they would be forced to hand over most of the company to us. These ratios needed to be set at a level that was loose enough to be fair, but tight enough to ensure that we could step in before the whole company went bust. That was what we were in the middle of negotiating, and that was what Diane and I had to sort out before the next morning.

I knew Frank would never have bothered with financial covenants for such an early-stage company. His view would have been that the numbers were all fiction anyway. But Diane did things differently, and since it was Diane's deal, we had to do it Diane's way.

In less than half an hour we'd cracked it. I leaned back on the antique dining chair, and rubbed my eyes. 'I'm knackered,' I sighed.

'Such a quaint expression,' said Diane with a smile.

'OK, I'm shagged out then. Don't you ever get tired?' She looked as cool as she had during the disastrous Tetracom presentation several hours before.

'Sometimes. But the excitement of the deal keeps me going. Don't you find that?'

'I try. But no. Late-night deals send me to sleep. I think the Commonwealth of Massachusetts should pass a law that agreements negotiated after eight o'clock at night are invalid. It would save the economy millions on lawyers' fees.'

She smiled, and sipped her coffee. She suddenly seemed to be sitting uncomfortably close to me. Or too comfortably close.

'Simon?'

'Yes.'

'Remember in Cincinnati when we talked about the firm?'

'Yes.'

'Well, things are developing. And I think you should know how. Let's sit down. Can I get you a drink?'

'OK.' I was curious to hear what she had to say. 'Have you got a Scotch?'

'I'm sure I can find one.'

We moved through to the sitting area, and Diane produced a glass of Scotch stuffed with ice for me, and a similar glass of what was probably bourbon for her.

We sat opposite each other. Safe. She tucked her long legs discreetly under the armchair and leaned back, watching me over the rim of her drink.

'Art was blasted today,' she said.

'I noticed.'

'And it wasn't the first time. The guy has suddenly dredged up a drink problem from somewhere. He's sliding downhill fast.'

'Gil must have noticed.'

'He has. And he's worried.'

'Is he still planning to retire?'

'He'd like to. He's considering sending Art to a clinic, or perhaps postponing fund-raising for a year.'

'But that won't solve anything,' I said. 'Art would be a disastrous Managing Partner of Revere. He was pretty awful before this. But with an alcohol problem? Gil might as well shut down Revere now.'

Diane gave a small smile. 'That's an interesting point of view.'

'Oh come off it, Diane, it's obvious. You think that. I'll bet our investors think that.'

As a matter of fact, they do,' she said, the smile still playing on her lips.

I remembered Diane's breakfast at the Meridien. 'I get it. You've spoken to Gil and Lynette Mauer about this haven't you? And other investors too, I'll bet?'

Diane didn't respond.

'Get rid of Art, and make you Managing Partner?'

Still no response.

'Do you think it will work?'

Diane allowed herself a grin. 'Yes, I think it will,' she said. 'Lynette is on board. Gil is wavering, but I'm working on him. But I'll need to build a team.'

'Yes, I see.'

'I'll need to recruit an experienced venture capitalist at partner level. And then there's Ravi, and you.'

'Me?'

'Yes. I need your help.'

'As a partner?'

'Yes. I'm sure you can handle it. I like the way you work. PC Homelease was a great deal. I think you'll succeed with Net Cop when the rest of us were going to write it off. I believe you'll be very good at this game.'

I sipped the Scotch, my mind racing. I badly wanted to be a partner of Revere. There was no point in going into venture capital unless you became partner. That was where the serious money was made, and where the serious decisions were taken. It was what I had wanted since I had joined the firm.

But I was wary of corporate politics. Diane was drawing me in, trying to get me to support her. Against Art. That was OK. Against Gil wouldn't be.

'You're hesitating,' said Diane.

'Oh, sorry. It sounds a great opportunity. I was just thinking it through. I don't want to become involved in some coup against Gil. I owe that man a lot.'

'He is a good man,' said Diane. And he likes you too. Art is putting a lot of pressure on him to fire you. But Gil wants to keep you on. So do I, of course.'

So Art wanted to get rid of me? Somehow I wasn't surprised. During our conversation the previous weekend he had seemed to trust me. But after avoiding me for a couple of days he was back to his old self. I hadn't appreciated that crack about my memo.

'Don't worry,' she continued. 'Gil and I are on the same side.'

'What about the police investigation?' I asked. 'Do you really want to have a suspected murderer as a partner?'

'I know you didn't kill Frank,' said Diane smiling. 'Eventually, so will everyone else. It will blow away.'

I was impressed by her confidence although I didn't share it. I was also grateful. I had no right to expect such trust from her. Ruefully, I thought I had every right to expect it from Lisa. 'Thank you. In that case, thanks for the offer. What do I have to do?'

'Not much for now. Make good investments, avoid bad ones, sort out Net Cop…'

'And keep myself out of jail.'

Diane winced. 'That would be nice if you can manage it. The main thing is, I need to know I can count on your support when I need it.'

'You've got it.'

She gave me a smile that warmed my tired body.

'So who did kill Frank?' she asked. 'Do you have any idea?'

'No. The police still think I did it, and they're doing their best to put a case together against me.'

'I know,' Diane said. 'They seemed to think there was something going on between us.' Her eyes twinkled in amusement.

I tried to keep cool. 'Yes. That's what Frank suspected. We had a row about it before he died.'

The amusement left her face, to be replaced by sympathy. 'You must have had an awful time. Frank dying. The police on your back. Your wife leaving you.'

I glanced up quickly towards her.

'It hasn't been great.'

'I know this is none of my business,' Diane said, 'but how could she leave you when you are in so much trouble?'

I stuttered an excuse. 'She was under a lot of pressure. She thought I'd killed her father. I can understand what she did.'

It was all true, but as I was saying it I felt a surge of anger. Diane was right. Lisa should have stayed with me!

'You look miserable. Let me get you another drink.'

I should have protested, but I didn't. My guard was dropping. Lisa had pissed off to California; why shouldn't I have another drink with a beautiful woman who was listening to me?

Diane disappeared, and returned with another glass. Somehow she had put some music on, Mozart or something. She sat down next to me on the sofa.

'Cheers,' she said.

I swallowed my whisky.

'Relax, Simon. You need to relax.'

Slowly she leaned over and pulled at my tie, taking it off. She let her hand rest against my leg. Her presence next to me was overpowering. Her scent, which a moment ago had seemed so subtle, flowed over me. I could hear the rustle of her silk blouse next to me. I turned to look at her. Small delicate face, flawless skin, full lips slightly apart. She leaned over and kissed me. It was a soft gentle kiss, safe, yet promising much more. I responded. I wanted much more.

She stood up, and smiled at me. 'Come on,' she said, slowly moving towards a closed door off the hallway.

I stood up, and began to follow her. Then the muzzy feeling of warm relaxation snapped. I suddenly saw what I was doing with complete clarity.

'No,' I said.

She stopped and raised an eyebrow, the smile still on her lips.

'Look, I'm sorry, Diane. This isn't right. I've got to go. Now.'

I turned, grabbed my tie and searched for my jacket and briefcase.

Diane leaned against the wall. 'Stay, Simon,' she said quietly. 'You know you want to. Stay.'

'I'm sorry. I just can't. It's not you. It's…' I blurted, unable to string together a coherent explanation of why I wanted to go. But I knew I had to leave.

I found all my stuff, and rushed for the door. "Bye, Diane,' I said, and ran.