Sunday, June 2, 2013

the last book I ever read (The Prince of Silicon Valley by Randall Smith, excerpt two)

from The Prince of Silicon Valley: Frank Quattrone and the Dot-Com Bubble by Randall Smith:

One big factor in Dachis’s choice of CSFB was the assurance that their Web consulting services analyst, Mark Wolfenberger, would not only attend every road-show meeting but also every sales call. Because Quattrone could field analysts in such numbers, all reporting to him, his team could pay more attention to selling deals than those at other firms.

Dachis, who had an undergraduate degree in dance and dramatic literature from the State University of New York at Purchase, had arrived the afternoon before Razorfish went public for the pricing meeting. There was just one problem: his dog Sophie. No dogs allowed, the security guard said. The dog comes or we don’t go, Dachis said. The security guard backed down.

There was another conflict over the IP price, and this time Dachis didn’t prevail. Dachis wanted $17 a share; CSFB’s head of technology capital markets, Andy Fisher, held the line at $16 a share. Dachis didn’t fully realize that the deal was heavily oversubscribed, and that the price would more than double on the first day of trading. If the deal had been priced at $17, Razorfish would have received an extra $3 million. The company could have used the money, Dachis thought later.

What galled Dachis years later was that his company got lumped in with dozens of others he considered of lesser quality that were taken public after his, later in the cycle. He found himself and his former company defendants in billion-dollar lawsuits brought by investors who had lost money when the bubble burst. It wasn’t just CSFB, Dachis thought—all the Wall Street underwriters had relaxed their standards. “The banking standards went out the window,” he said.

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