American History 1988
Chapter 234 - 228: Rival

Chapter 234: Chapter 228: Rival

The Red Herring Meeting, well, it’s not exactly a dinner party.

It’s a small gathering after the roadshow, where underwriters probe large investment institutions for their subscription intentions.

The reason for its name is that underwriters deliver Red Herring prospectuses to many potential customers.

The cover of the prospectus is printed with a striking red warning label, which notes that information on products and services is incomplete and subject to change.

Moreover, shares cannot be sold during this period. However, brokers can pre-sell the shares to clients and obtain letters of intent from them.

At the time of the stock offering, once the registration statement goes into effect, buyers can decide whether to convert their letters of intent into purchase orders.

This small trade fair is very flexible, and the investment institutions’ letters of intent don’t carry legal effect.

Therefore, the data ultimately collected can only serve as a reference.

Additionally, underwriters can adjust the contents of the prospectus further based on the purchasing intentions of the clients.

For instance, this time Byte Company’s Red Herring prospectus listed the per-share pricing range as 14~20 US dollars.

Yes, Morgan Stanley quietly raised the stock pricing of Byte Company, which was initially planned to be 12~16 US dollars.

However, due to the hot market feedback and the boost from Time magazine, they made a last-minute adjustment to the pricing.

The facts proved that the price was still not high, as they received subscription data for 65% of the target financing amount at just the first internal presentation in New York.

Although the final purchase orders post-IPO may differ, it was undoubtedly an auspicious start.

So after the New York roadshow ended, Dean and his team flew non-stop to Chicago.

"Hey, look at our superstar, he’s become the youngest billionaire in history!"

Valentine held up a magazine with a red frame on the cover and waved it towards the seats behind him, immediately drawing cheers from everyone.

This plane was filled with people from Byte Company and Morgan Stanley, who chose to charter a flight to Chicago.

"Dean, you should take a look at this," Valentine passed the magazine to him, "Damn, I’m a bit jealous, they’ve made you look so charming."

"OK~" Dean said with a smile, putting down the materials he was holding, and then took the magazine.

The TIME logo was conspicuous, and of course, Dean’s cover photo was even more eye-catching.

Dressed in a suit, he sat cross-legged on a black chair, his gaze directed towards the camera at the lower right, with a slight smile and a hint of determination.

"Dean Price—The New King of the Software Empire," was written below the cover, accompanied by a smaller subtitle, "How did he go from country boy to Silicon Valley star?"

One has to admit, Time magazine has prestige, with just a few words along with the iconic red frame and cover portrait, a tycoon’s vibe comes at you full force.

This issue of the magazine actually hit the stands the day before yesterday, but Dean was too busy with the first roadshow to have a look.

Flipping through the magazine casually, its contents, apart from introducing him and Byte Company, also included an unedited transcript of his conversations with James.

Dean himself didn’t have much of a reaction to Time’s coverage, but Valentine was not satisfied with his perfunctory attitude.

"Kid, it’s because of this that our first roadshow was so successful."

Valentine snatched the magazine from his hands, "Do you know what it means to be on the cover of Time?"

"Hmm~" Dean gestured for him to continue, then turned his attention back to the materials in his hands.

"It means you’re famous, among both public and elite circles.

It’s not easy to win the recognition of both these groups simultaneously because that brings us a lot of conveniences."

"Sounds like it’s good for our upcoming IPO?"

"Of course," Valentine said proudly, slapping the magazine in his hand, "The Chicago and Los Angeles roadshows that follow will see countless celebrities coming uninvited."

No matter whether they are genuinely interested in Byte Company’s stocks, the more people that come, the bigger the fame of the roadshow, and that’s a signal to the market.

See, Byte Company is very popular. This is also a kind of advertising, and to some extent, it can even influence the direction of public opinion.

Of course, the best part is Time’s coverage, which isn’t deliberately exaggerated.

As long as they report truthfully, that’s the best promotion for Dean.

Because his story is so inspirational and legendary, it is a true representation of the American dream.

The public loves such a persona, elites are happy to interact with him, and the media has found its material.

A triple win! One must say that Morgan Stanley’s timing for arranging Dean’s interview was very clever.

"Got any leads?"

While Valentine was still excited about the upcoming roadshow, David Morgentaler shifted his focus onto the materials in Dean’s hands.

"It looks the same as we guessed before, this must be someone who couldn’t resist jumping into the fray to get a piece of the action."

The materials Dean was holding pertained to information about Teams’ competitor, RAS CALL.

Its founder, a young man named Brian Wiles, was originally just a computer game enthusiast in New York.

He had a passion for computer games, and to facilitate better cooperation with friends in gaming, he developed a voice dialing software.

In principle, this software was very similar to Teams, based on digital audio transmission over the internet.

But as a self-taught individual, Brian Wiles simply wanted to use it for basic voice communication.

As a result, the call quality of RAS CALL software was abysmal, and it had very high hardware requirements.

But with Teams as a shining example, RAS CALL quickly caught the attention of some interested parties.

Instant messaging software had proven to be marketable, and Byte Company was even close to accomplishing an IPO with its help.

If Teams could succeed, couldn’t RAS CALL do the same?

So, Charles River Ventures approached Brian Wyles—they were both on the East Coast, and even relatively close by.

When the people at Charles River Ventures told Brian Wyles they wished to commercialize RAS CALL, he thought they were joking.

To persuade this young man, who knew nothing, the folks from Charles River Ventures placed the Teams software right in front of him.

$149 per copy? A valuation of over a billion US Dollars? Brian Wyles was astounded.

His hourly wage from odd jobs was just $6.50—how many years would it take to accumulate a fortune of over a billion US Dollars?

Brian Wyles couldn’t figure it out, but he knew an opportunity was right before his eyes.

He eagerly accepted the olive branch extended by Charles River Ventures, but he had his own conditions.

Brian Wyles turned down Charles River Ventures’ offer to invest $300,000 in exchange for 70% of the equity.

He chose to take $120,000 and keep 70% of the equity for himself.

This ratio was the exact opposite of what Charles River Ventures had initially projected—the young man was quite greedy.

The truth was, without the aid of the venture capital firm, he might have amounted to nothing, not even having the money to rent an office space.

Charles River Ventures had laid out the pros and cons, but Brian Wyles rejected them all; he was stimulated by the billion-dollar valuation.

Ultimately, considering that the RAS CALL software already had a basic framework, and that there were no other alternative investment options on the market, Charles River Ventures agreed to Brian Wyles’ demands.

Having secured his first investment, Brian Wyles started to prepare for a big endeavor, but the embarrassing truth was that RAS CALL currently only had voice-calling functionality.

RAS CALL lacked the text messaging and file transfer functions of Teams, and Brian Wyles couldn’t develop these features himself.

Alright, they faced their first hurdle. But venture capital had already started; they couldn’t just wrap things up hastily and disappointingly.

So, both parties sat down to brainstorm and ultimately set their sights on the well-established Teams software.

They couldn’t make it work, but they had a ready-made example to follow.

Struck by inspiration, Brian Wyles, modified the antiquated Plato System according to the Teams interface and added it to the RAS CALL software.

Look, identical text messaging, identical voice calling—they were already exceedingly close to Teams.

As for the file transfer feature... Brian Wyles had still not figured it out.

But that didn’t stop Charles River Ventures from beginning to actively promote RAS CALL and build momentum.

Byte Company was attracting a lot of attention at the moment, making it a perfect opportunity to ride the wave of popularity.

As long as they could make an appearance in the media, there was no concern about attracting eager funds proactively coming their way.

Charles River Ventures were savvy and deeply understood the rules of the venture capital game.

Byte Company was from the West Coast, and during its third funding round, it had caused a frenzy among investors clamoring for a piece of the scarce stock availability.

But in the end, it was scooped up cleanly by West Coast peers, leaving nearly nothing for those on the East Coast.

Now, with an East Coast venture capital firm like Charles River Ventures hosting a similar fundraising event, local peers were bound to be interested.

The best part was that Brian Wyles was also from the East Coast, and RAS CALL was a bona fide East Coast enterprise.

Furthermore, the market potential of Teams had been proven, making such an investment virtually risk-free—a favorite of East Coast venture capitalists.

Now, all they needed was an opportunity to showcase it in the media, so Charles River Ventures targeted Byte Company’s roadshow in New York.

"According to the information we’ve received, their RAS CALL has an almost identical interface to Teams.

Can we sue them for infringement based on this?" David Morgentaler, who didn’t understand software, noticed the obvious imitation.

"We could try, but it might be tricky." The current federal laws concerning software infringement were not very sound.

Dean estimated that even if the other party was ruled to have infringed, it could be a long time in the future.

The old-money folks on the East Coast might have average business acumen, but when it came to bickering, they had never disappointed.

Seeing David Morgentaler a bit concerned, Dean couldn’t help but reassure him with a smile.

"Don’t worry, it’s far inferior to Teams. The East Coast has never let us down in software research and development."

Dean’s joke made everyone laugh. When it comes to commercializing software, Silicon Valley still reigns supreme.

As they joked, Anna approached with a satellite phone, "Boss, your call."

Civil aviation didn’t allow the use of cell phones, but they provided a dedicated satellite phone service.

Dean took the phone and after briefly speaking, hung up.

"Anything important?" asked David Morgentaler.

"Nothing much, we’ll head back to Silicon Valley after the Chicago roadshow is over."

The Governor of Arkansas and his spouse were planning another visit to California.

However, what Dean was unaware of was that Charles River Ventures’ moves not only attracted the East Coast’s attention but also raised alarm in a certain behemoth.

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