“True. Anyway, she looked at the numbers, and they weren’t inflated too badly. Trim—” Another annoyed eye-roll. “Scumbag didn’t lie too much on the deal he sold us. He screwed us on the back end.”
I rolled my hand in a “get to the point” gesture.
“Yeah, whatever. You were there.”
“Mmm.”
“Anyway, I used his numbers as a starting point, and Susan helped me update them. She gave me some really good advice from an investor’s perspective. We talked some more, and she’s definitely interested in the development.”
“That’s good news,” I said, “but I’m a little confused. I don’t remember any of this. When was the last time we discussed it?”
“It’s been a while,” he admitted. “You’ve been busy with other things, so I handled it myself.”
“Got it. I remember when we made the decision, but…” I thought back and then stiffened in disbelief. “Holy crap! Has it really been two months? Time flies when you’re having fun.”
“I guess,” he said dryly. “Meanwhile… d’you mind if I get back to my story?”
“Yeah, sorry. Go ahead.”
“Okay, so… she’s probably going to invest in the development, enough that we should be able to cover the rest.”
“Seriously?”
“Yeah. But that’s only half the news. Last week she asked about company earnings, so I faxed her an estimated year-end P&L. She looked it over, and today she dropped a bombshell. She wants to know if we’re looking for investors in PHD itself.”
“She wants to buy part of the company?” I said incredulously. “That’s what you meant before? How would that even work?”
“Legal and financial stuff that you don’t care about,” he said with a wave. “She suggested a 25 percent stake, but there’s a catch. Two catches, actually, but I can use the second one to our advantage.”
“What’s the first?”
“We’d have to assign 10 percent of the company to the non-shareholding employees.”
“We can use that to our advantage as well,” I said immediately.
“Yeah, I figured you’d be fine with it. It’s a big chunk of change, but it appeals to your socialist side.”
“I’m not a socialist,” I said mildly. “I believe in private ownership and the free market. I don’t believe in unregulated capitalism. There’s a difference.”
“Now you sound like Leah,” he said.
Because Leah understood how the world worked—the real world. Trip and I lived in a bubble of privilege. Men like us, with money and power, could do whatever we wanted and usually get away with it. Scumbag was a perfect example.
I offered a tight smile and kept my thoughts to myself. Trip liked his privilege and power. I did too, if I was being honest, but I didn’t have any delusions about our success. We’d both worked hard, but we’d also had a head start from birth.
“I’m not a socialist,” I repeated aloud, “but people work harder if they own a part of what they’re working for.”
I listened to what I’d just said and had to suppress a smile at the contradiction. (That was exactly what socialism was, a system where the people owned the means of production. Fortunately, “socialism” was just a bugaboo for Trip, a word he used to extol the virtues of capitalism. He didn’t understand or even care about the reality. Still, I digress.)
“Whatever,” he said. “I can live with the 10 percent. But I wanted to clear it with you before we proceed. We’ll need to talk to the girls as well.”
“I don’t think they’ll have a problem with it.”
“Probably not,” he agreed.
“What’s the other catch?”
“We’d have to start doing nonprofit work, a percent of net, every year.”
My eyebrows did their thing again, although I shouldn’t have been surprised.
“Habitat for Humanity?” I said.
Trip snorted. “I knew you’d have a suggestion straight off the bat.”
“It’s good for the community.” It was my “socialism” again, and he waved it away. I returned to the original question. “So… you really think it’s time to look for investors for PHD?”
“I didn’t at first,” he said, “but Susan convinced me. It’ll jump-start our next round of growth. We can also build a new headquarters building.” He gestured around us. “Something more befitting a company of our size and ambition.”
“No kidding.”
We had thirty employees, and we occupied five spaces in a building that had been designed for businesses much smaller than ours. As an added headache, the landlord wouldn’t let us knock down walls to add interior doors. So we had to leave one space and walk outside to an adjoining one any time we wanted to meet with another department.
Worse, we couldn’t hire anyone new unless we wanted to lease offices in nearby buildings or rent mobile office trailers. The trailers would keep people within walking distance, but then half of our employees would have to park somewhere else. Besides, our IT guy already complained about the networking situation in the building. I was pretty sure he’d blue-screen and lock up completely if I asked him to run Ethernet to the parking lot.
“Besides,” Trip was saying, “we’d always planned to bring in investors and go public one day. That’s why we filed as a C-corp instead of— Never mind. More business stuff. Anyway, we always planned to do this, although I didn’t think it’d happen so soon.”
“Are there any downsides?” I asked. “To doing it now, I mean.”
“Plenty. I know about most of them, but the unknown unknowns still worry me.”
“I’m sure you’ll make it work,” I said with a level of confidence that I actually felt. “How can I help?”
“Keep doing what you do,” he said. “Although… I need to borrow Shari for a couple of weeks.”
“No problem. What for? Just out of curiosity.”
“To help with a business review. Then I’ll have to find similar companies so I can do a comp analysis.” He started thinking out loud. I understood most of it, which surprised me.
“How much are we talking about?” I asked when he finished. “I mean, what’s the company worth?”
“I’ll know more once I do a real comparison, but I can estimate based on earnings. Depends on the multiple, but… ten to twelve million.”
“I’m sorry. Did you say million?”
“Yep. Ten to twelve.”
“Seriously?”
He chuckled. “Business has been good, dude.”
“You can say that again.”
“Business has been good, dude.”
* * *
Susan’s business manager arrived in October. Vonda Jarvis was an unimposing Black woman in her mid-fifties, neat, trim, and soft-spoken. Her clothes were more Reagan than Clinton, and I probably would’ve thought she was someone’s sweet old auntie if I hadn’t known who she really was. I discovered in the process that her appearance and manner were deliberate camouflage, a way to make people overlook and underestimate her. In reality, she had a business mind that rivaled Susan’s.
Vonda and two assistants spent several days in a hotel conference room with Trip and Shari, where they went through our entire business with a magnifying glass, an X-ray machine, and a scanning electron microscope. In fact, I suspected that Vonda’s bulky, unfashionable purse held a dual-column gas chromatograph, Hewlett-Packard model 5710A, with flame analyzing detectors. And hers would’ve been the turbo-charged floor model.
We’d provided her with bank statements, payroll numbers, and signed contracts, but Shari had to return to the office several times for more. Vonda wanted to see things like equipment leases, phone and internet bills, and even how much we spent on food and entertainment.
I was surprised and annoyed at the same time. Didn’t Susan trust us? Did she think we were serving lobster and caviar at staff meetings? As if! We ate doughnuts! And I paid for them. Personally! Trip was more laid-back about the whole process.