Michael Ridpath - Final Venture

The Monday morning meeting started on a positive note. Diane wanted to bring the Tetracom management in to present to the partnership that Wednesday. She warmed Gil up nicely. On a non-biotech investment, Ravi would always follow Gil. Art stayed suspiciously silent, ignoring me completely.

Then we came to the two troublesome deals. Net Cop and National Quilt.

I started off with Net Cop. I outlined the deal I had struck with Jeff Lieberman. Revere's holding would be diluted, but we would still have something, and if Net Cop really did work as well as I hoped, we could still make a healthy profit on our original investment. Without Bloomfield Weiss, our holding would certainly be worth nothing.

Gil was pleased, and gave his blessing. The others added theirs.

Then came the National Quilt Company. John explained that owing to an unexpected build up of unsold inventory the company would be unable to pay off its working capital line of credit by the end of the month as the bank had requested. He said it was likely that the company would have to file for Chapter Eleven of the Bankruptcy Code the following week.

'What?' said Gil, frowning. 'I didn't know we had a problem here. I don't like this kind of surprise, John.'

John glanced at Art. Art was looking at the yellow pad in front of him. He had avoided my eye throughout the whole meeting.

'I think it kind of took the management by surprise,' John replied.

'But you're on the board aren't you? Couldn't you see this coming?'

John shrugged. 'I guess I missed it.'

Gil turned to Art. 'This was your deal originally, Art. What went wrong?'

'It's difficult to tell,' said Art. 'Three months ago the company seemed very stable. Unexciting, but stable. So I handed it to John. Since then the management seem to have gone off on some crazy strategy to put naked women on their bed covers. I guess that's what the trouble is.'

'What?' said Gil, turning to John. 'Is that true?'

'Uh. Yes,' said John. 'Or, at least, no. I mean…'

'Are they putting nude women on their bed covers or not?'

'Er, yeah, they are.'

Gil's patience was wearing very thin. And you let them do it?'

'Er, yes.'

'Why, for God's sake?'

John panicked. He could have said that the build up of inventory had been caused by purchasing decisions that were taken when Art was on the board. He could have said that the 'Go Naked' strategy hadn't started yet. He could have said that he had tried to talk to Art about the company, but Art hadn't wanted to know. But he didn't.

'Sorry'

Gil glowered at him. 'This is just the sort of company we cannot afford to lose. Especially now when we know that the Bieber Foundation is looking at what we do so closely'

John cowered. These were strong words from Gil.

Gil turned to Art. 'I'd like you to see what you can salvage from this one.'

'Sure,' said Art. 'It sounds like it might be too late, but I'll see what I can do.'

'Well, I think that just about wraps it up,' said Gil, picking up his agenda.

'One thing, Gil.' It was Diane.

Gil paused. 'Yes?'

'I agree with you. Losing National Quilt is the last thing we need. And I think it's not entirely clear what went wrong. It's extremely important we take the time to learn from our mistakes.'

There was silence round the table. I watched, fascinated. There was trouble ahead.

Gil frowned. 'I think John explained the problem. Management was allowed to embark on an entirely inappropriate strategy'

Art butted in. 'And I should take my share of the blame. I shouldn't have handed over this deal to such a junior member of the team.'

Gil nodded his approval. John sat still, his ears turning slowly red, whether from shame or anger or a combination of the two, I couldn't tell.

'I wonder whether there were any early warning signs we should have spotted,' Diane went on. 'Management, for example. Should we have backed them? And the original turnaround strategy for the company. Was it the right one?'

Silence again. Then Gil spoke. 'Yes, I think those are useful questions to ask. Art?'

Now it was Art's turn to redden. He took a moment to compose his reply. 'Those are absolutely the right questions,' he said in a forceful voice, full of confidence. 'But in this case I can safely say that until three months ago the company was doing great, the management seemed fine, and the strategy was working.'

And then it all suddenly went off the rails?' Diane asked. 'Without any warning?'

You could almost hear the intake of breath around the room. Partners at Revere just didn't question each other like that. At least not in the Monday morning meeting.

Art leaned his large frame on to the table, and stared at Diane.

'Yes. That's about what happened. I've seen stranger things in venture capital.'

Gil was frowning now, the tension between his lieutenants was obvious, and he disapproved. 'All right, now we've had the discussion, I think the meeting's over.'

Diane smiled quickly at Gil, and gathered up her own papers. But the tension hung on in the room, like the air after one squall has passed but another is about to hit.

'Why didn't you stand up for yourself in there?' I said to John as soon as we were back in our office. Daniel had gone to see Gil about something. 'Art dropped you in it, and if Diane hadn't stepped in, he would have got away with it completely.'

John shrugged. 'There's no point in me picking a fight with Art. That would only make it worse. As soon as National Quilt started going wrong, Art made sure it had my name on it. There was nothing I could do.'

'You've got to stand up for yourself,' I said. 'I was mauled on Net Cop. I survived.'

John shook his head. 'National Quilt is going down the tube.' He slumped back in his chair. 'Diane was just making a political point. I couldn't do that even if I wanted to.' He shook his head. 'I swear, I've got to get out of this job.'

'Hey, come on, John,' I said. 'You can't give up just because one deal goes bad.'

'It's not just that,' said John. 'I've lost my taste for this place. I'm just not turned on by money like the rest of them.'

'What do you mean, not turned on by money? You've been to business school. You know it's the only thing that matters.'

John ignored my irony. 'That's what someone like Daniel might think. But not me.'

'Nobody's quite like Daniel,' I said.

John looked at me. 'You know he's a jerk. He's sometimes funny about it, but basically, underneath it all, he's an asshole. Sure he's amusing, sure he's smart, but he's always looking after number one. Plus, he thinks making someone else look stupid is funny. I don't know, I guess I don't work like that.'

This tirade was so uncharacteristic of John that I found it hard to answer.

John sighed. 'My father's exactly the same. He has his grand plan for me. Business school, venture capital experience, then I can make my own millions.'

'Is that a grand plan you're going to follow?'

John looked at me sharply, and then relaxed. 'The secret with my father is to do just enough to let him think I'm listening to him, and then stay well clear. I got into Dartmouth, business school, here. And for what? To be bawled out because I didn't take a bunch of Hugh Hefner wannabes seriously'

'There are always jerks around whatever you do.'

'Maybe, but since Frank…' John paused, suddenly finding it difficult to control his emotion. 'Since Frank was killed, I just wonder what's the point. I guess there comes a time when I'm just going to have to tell my father who I really am, and lead my own life. Maybe that time is pretty soon.'

I smiled with sympathy. A death can mean different things to different people. It was natural, I supposed, that Frank's sudden departure from this world should make John wonder what it was all for.