Forget floating to achieve dotcom success. Gloating can be a far more rewarding fund-raising activity. Witness a commentary on life as a dotcom survivor.
A friend told me how he felt as his company nailed down its second round of financing. He felt very, very, very, very, very, very good.
"In early April our VCs tentatively green-lighted 20 deals, including ours," he said. "A week after April 14th they changed their minds about everything and they killed 19 deals, every one but ours. My partner and I thought we were heroes in an action movie. We were Bruce Willis and Mel Gibson, running through a tunnel with a flood right behind us. A heavy metal gate was crashing down before us.
We sprinted! We slid! We escaped!"
As Winston Churchill said, "Nothing in life is so exhilarating as to be shot at without result." Surviving is good, whether you're evading the bullets of the Boer War, as dear Winnie did, or standing up after a high-tech shakeout. Magically, our company also closed its second round after April 14ââ,¬"even though our CEO delivered his killer PowerPoint pitch to our most important venture capitalists on the tumultuous afternoon that the bubble burst. While he was presenting cheery forecasts with Excel spreadsheets displaying hockey-stick revenues and profits shooting skyward, Nasdaq plummeted by 300 points in 50 excruciating minutes.
Assistants nervously sidled into the boardroom, handed dire notes to the partners, and scurried away. Our Big Guy waded through the deluge undaunted. A less-confident boss might have been a little ruffled as brows darkened in that somber room. Since then, brows throughout Silicon Nationââ,¬"from Sand Hill to Silicon Alleyââ,¬"remain deeply furrowed. The money is flowing again (though the spigot isn't open as wide), but trembling has replaced the surreal optimism that prevailed last year.
Here's the good news.
Survivors like our little company are surrounded by dead fish and drowned rabbits. But now the dying presents opportunities. Not long ago, we were bunnies too: cute but vulnerable little beggars seeking cash. Now we're buyers. We're carnivores. We rule! It's weird. It's wonderful. In the last few weeks, a half-dozen competitors have come calling. They're out of cash, payables rising, with virtually no prospect of getting more funding. They're sopping wet, going under for the fourth time. They're behind the gate, looking for a life preserver, a dinghy, a deal, or just a kind word.
Their bosses are conflicted. They pretend they're not madly treading water. They say, "We're seeking a merger opportunity." Translation: "Buy us, please. We're desperate." However, weakness and candor are incompatible, so bosses euphemize or fib. They also lie.
One CEO called and proposed a "merger" even while telling me she thought our business model sucked. She couldn't see how we'd managed to get tens of millions of dollars when her more deserving, better-conceived, better-executed business couldn't find another nickel. Sadly, though, we had fresh money and she didn't, she admitted, so what the heck, did we want to merge with her failing enterprise?
Despite her odd sales approachââ,¬"which offered uninterested observers a theory about why she couldn't raise a second roundââ,¬"we talked to her. We looked at her books, kicked her code, weighed her deals, and assessed her staff. Great fun!
We felt a sadistic pleasure telling her, You've got nothing for us. Not that we wanted to find nothing there. That would have been a perverse waste of time. Oh well, OK: The truth is that we would have wasted our time just to lord over her.
The other deals we've turned downââ,¬"mergers, acquisitions, whateverââ,¬"weren't as much fun. That's because the other leaders were likable and we empathised. (Bummer.)
So do talk to all "merger" applicantsââ,¬"especially if they obfuscate or irritate you. After you slide under the gate, you've got to look back, or what's the point? Gleefully examining the flotsam that could have been you might not be good for the soul, but it's great for the ego. Plus you get to read all those nifty plans. Failure is exquisite fun and quite educational, don't you think? When experienced vicariously?
