#12: How Money Changes Things

Ryan_NameFinally closed a new round a funding last week. $11 million this time. It should take us forward and allow us to expand our team and grow. Most importantly, this type of money gives us credibility. Regardless of my own past successes new money still talks more than reputation alone. I’ve seen startup founders with the “fake it ‘til you make it” mentality go far in this world, but eventually they go bust.

You can only fake a bad product so long before the money dries up. We actually have a product that people want their hands on. I already have all our investors using the developer sample Merge devices and I haven’t heard a major complaint yet.

The formalities of the deal are still confidential so there’s not much I can pass on in this post other than the dollar amount. At the end of the day the real story happened after all the papers were signed and the first wave of money transfer hit the Merge company account. Money changes folks. Namely Alison.

Jasper was refreshing his screen every 15 seconds waiting for the money to appear. I think he wanted some good news to pass on to his wife after disappearing for a full 24 hours during and after the company retreat last week. Alison won’t tell me too much about it and I don’t want to. Once the money landed you could see Jasper’s entire body relax and melt into his chair.

The documents were signed and handshakes were passed around on Friday afternoon. It was a pretty full room of investors. Jason Hamilton and I agreed that a more diversified range of investors would help us in the long run so we took on investments from 4 very different sources. It was a success all around. The money came in. Jasper was happy. We had industry support, which made me happy. And we could start hiring a focused and skilled team, which would finally make Alison happy.

But apparently money can’t solve every problem.

After the formalities were over the real night finally began with a few hours of drinks at the office, more handshakes, and me avoiding actual socializing with the VCs on a personal level.

I don’t mind taking investors’ money and hitting a strip club with them at 3 AM, but I’m not about to pour my heart out to these guys over their 7th scotch as they complain about their wives and spoiled kids. That’s just not good for anybody. Jason gets it. I’ve known him for years and I don’t even know his kids’ names. It’s worked out well for both of us. He left right after the documents were signed to head out to Barcelona anyways.

Jasper took off almost immediately after the papers were signed to head back home. As the only family man in the company he is starting to show his inability to keep up appearances as a co-founder. His work is still adequate and on time. That’s not the issue. He’s just not mentally here.

“Sometimes I don’t think Jasper’s holding up his end of the bargain,” Alison yelled at me over the music as she slid into the booth across from me. “He’s acting like a bitch and his job is basically all done.”

I just shook my head a little and took a shot of Patrón.

“The rest of this is a software play. The hardware is secondary and you fucking know it.”

Alison’s eyes were stone serious. She clearly wasn’t drunk either.

“Now’s not the time, Alison,” I said. “We just signed a huge deal tonight. Relax! Take a shot with me. Dance a little. Hook up with the new intern, Daemon or whatever his name is.”

Alison crossed her arms defiantly and stared.

“Come on, what would Peter Venkman do? Complain about his fellow Ghostbusters or take a shot of Patrón and chase around for some ass?”

Alison smirked at me. I knew I had her the second I mentioned Ghostbusters. She’s a sucker for it. She took the shot glass in hand, lightly tapped it back on the table, and threw the shot back in one fluid motion.

“You meant Damien, not Daemon,” Alison said coughing from the tequila going down her throat.

“Sure, whatever his name is.”

“Damien quit you idiot.”

“That was…what 2 weeks he lasted?” I asked.

“Something like that. He still did more than that Holly moron that we hired at the start of the year.”

“No, no, no, no. There’s no “we” in that hire. You hired her,” I said finally putting my shot glass on the table and grabbing my scotch from the table.

After a few chuckles Alison and I locked eyes for a moment and she said, “We should really build an HR department shouldn’t we?”

“I’m not sure we need to yet, if ever,” I agreed. “We should be able to move forward building our pre-order and launching with a slightly bigger team. You, me, and Jasper can handle to stupid HR issues until we make our next move.”

“What next move?”

I had been holding this back from Alison, but I believe Merge should be heading in a fast growth, fast exit direction. We’ve been building a business over the past 9 months and a piece of tech that can hold its own. The problem is, the more I talked with investors and other notable tech CEOs out west I started coming to the conclusion that Merge is better as an acquisition target.

Alison just stared waiting for me to break the silence. She would have been a good business development rep if she had the stomach for sales.

“I think we should be searching for an acquisition some time in the next 12 months,” I said.

Alison sat there quietly as she tapped the back of the dark, red leather booth in a rhythmic sound. She wasn’t blinking the entire time. It was like having a staring contest with a fucking cat as the cat’s tail flicked behind it.

“No,” Alison said finally, still not blinking.

“Come on, Alison,” I said leaning forward. “It’s the only thing that makes sense. We’re outgunned by massive competition on the hardware and software side. We have a great product, but it can’t last forever. We need to sell, pocket our cash, and walk away. Don’t try to hold out longer for more money. Don’t be greedy.”


I finished my scotch off and the glass slipped out of my hand and it hit the ground, shattering at our feet.

“We aren’t aiming to sell, Ryan,” Alison said as she got up and walked all over the glass in her thin soled Chuck Taylors. Before she pass me Alison looked down at me as I started piling the glass up with my feet and said, “Come talk to me when you’ve changed your mind.”

It’s been three days since I’ve seen Alison. She won’t return my calls, she hasn’t come into the office, and she isn’t answering her door. I even waited outside for 4 hours on Sunday morning hoping to smoke her out with long sessions of knocking. I was eventually asked to leave by one of her neighbors or risk having the police called for harassment. I actually felt like a stalker boyfriend instead of her boss.

If it wasn’t for the fact that she continues to send project updates to Jasper I’d say she was dead or missing.

As of right now Merge is valued at $110 million…and down one co-founder.

Alison better turn up soon. We need to hire a new intern.

Previous Post – #11: Endless Work and No Play Keep the Talent Away


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