American History 1988
Chapter 295 - 285 Good Idea

Chapter 295: Chapter 285 Good Idea

The transition of the new government wouldn’t be so quick, and the first issue Clinton had to face was how to deal with the large number of staff left by the previous White House owner.

He had come all the way from being an unremarkable Governor of Arkansas to the pinnacle of power in Washington.

Of course, many people had lent a hand or helped him along the way, but clearly, it wasn’t for free.

They had various interests to seek, and now it was time for Clinton to deliver returns on their investment in him.

He needed to put his own people in various key departments and start paying back favors in the process.

Dean had no plan to seek a job at the White House, so he returned to the West Coast after attending the inauguration ceremony.

In the new year, there were a lot of things waiting for him to handle at Byte Company, such as last year’s financial reports.

The report from Chief Financial Officer Tano was already on Dean’s desk, and at this moment, he was holding a board meeting.

"Our total sales last year were 830 million US Dollars, gentlemen, this is a remarkable achievement!"

No sooner had Dean finished speaking than the board members sitting below started clapping with joyful expressions.

"We are the fastest-growing company in Silicon Valley!" Valentine was very pleased with Byte Company’s financial report, which even outshone some of the returns from investments.

Honestly, Valentine was somewhat regretting cashing out Byte Company’s stock too early, as Sequoia Capital had reduced almost half of its stake within the past year.

Yes, as a venture capital firm, they would start cashing out slowly when the stock price of a newly listed startup company was high enough.

After Byte’s stock price reached 60 US Dollars, Sequoia Capital began this plan.

And until now, when the price hit 90 US Dollars, they had sold off about 5% of their Byte stake.

This brought in over $300 million in cash for Sequoia Capital, and Valentine personally received a reward of 60 million US Dollars.

Without doubt, this return was extraordinarily rich, almost tripling the sum of what Valentine had made in the last few years.

But Valentine still wasn’t sure if he would regret cashing out Byte Company’s stock too early.

An 830 million US Dollar sales total, an increase of more than 60% compared to last year, naturally meant Byte’s stock would keep rising.

"What’s our profit margin?" Durell was more concerned about Byte’s profits, as this pertained to his dividend.

Upon hearing this, Dean also smiled, "This year, our profit margin has seen significant improvement, reaching 22%, the best performance to date."

Since the distribution channels had been established in the previous year, this year required no extra capital expenditure, which of course greatly reduced the budget for expenses.

Moreover, Byte Company had launched new software this year, further increasing sales, leading to an uplift in profit margin.

Since these products all shared a channel, the profit margin increased instead of declining.

"Good!" Durell was also very satisfied with this figure.

Unlike Valentine, KeyPoint Ventures still held quite a substantial stake in Byte.

Though Durell had cashed in a portion of his stocks, this amounted to less than 2%, and he was still one of the main members of the board.

As he had confidence in Dean, Byte’s stock price reflected this.

Knowing the company was doing well, there certainly was no reason for him to exit yet.

Incidentally, the 2% of Byte’s stock Durell cashed out was almost entirely when its stock price was at its peak.

KeyPoint Ventures yielded nearly $200 million in cash, and Durell earned a reward of 40 million US Dollars himself.

Look, although his stake was not as large as Valentine’s, their returns were not drastically different.

Notably, Sequoia Capital sold off 5% of the stock, whereas KeyPoint Ventures only paid a price of 2%.

Durell was always bold, having his own set of rules.

"When do we expect to distribute dividends?" The representative director from Goldman Sachs was equally concerned about when this profit would be in hand.

Since Byte Company went public, most of the investors who caught the last train of the third round of financing had already cashed out.

And Goldman Sachs, which had absorbed their shares, replaced the former as the third largest shareholder of Byte Company.

At this point, the members of Byte’s board had returned to seven seats, as those who cashed out left automatically.

Besides Goldman Sachs, among the seven directors in the meeting room, there was another from Wall Street, which was UBS.

Byte Company’s continuing high-speed growth also made Wall Street prepared to hold its stock long-term.

The reason for this was the profit distribution mentioned by Goldman Sachs.

American stocks are straightforward; they distribute real money every quarter.

"Following Byte Company’s usual practice, our last quarter’s dividend will still be in February or March.

The distribution ratio is 60%, and the financial report will be released one week before the dividend."

With an 830 million US Dollar sales total and a 22% after-tax profit margin, Byte Company earned 180 million US Dollars last year.

This figure satisfied all the directors, and with 60% of it distributed as dividends, that’s nearly 110 million US Dollars for the four quarters.

Every shareholder in the meeting room held more than 5% of the stock, netting them over 5 million US Dollars from Byte last year.

Think about the stock price when they originally bought in? By comparison, the return on this investment exceeded 30%!

In Wall Street’s stock ratings, Byte Company was definitely classified as "Hold Long Term."

And as the largest individual shareholder, Dean earned over 40 million US Dollars in dividends from Byte Company last year.

With such a substantial profit return, he had no reason to cash out his stock.

Even were it not for the consideration of liquidity in the secondary market, Dean would have liked to increase his stake.

This over 40 million US Dollar dividend meant he had to pay more than 9 million US Dollars in capital gains tax alone.

However, due to the previous donation, this money was pocketed by him again.

Look, the business of charity was still worthwhile, and Dean planned to have his financial team take another good look at charity.

"Regarding Byte Company’s development plans for this year, we will announce them at next month’s shareholder meeting.

Currently, there is another task that requires our full attention." Dean picked up another document from beside him.

"Our new Commander in Chief is planning to visit Silicon Valley in a week, and Byte Company is a key focus point for the visit."

"Oh~" Everyone looked over in surprise, "He’s coming to California?"

"That’s right," Dean nodded with certainty, "At that time, all the mainstream media will cover the event, and there will be full on-the-spot coverage."

"So..." Dean tapped the table with his finger, "This is important, Byte Company will make its appearance in front of all the American people."

"I’ll make sure this place looks brand new," the Chief Executive Officer George immediately pledged.

"I will also put together a detailed plan.

We will definitely leave people in Washington with their mouths agape."

The Chief Operating Officer Jimmy also immediately expressed his stance, aware that this was a great opportunity to showcase Byte Company.

"Good, time is of the essence, let’s all prepare separately."

Dean had just received the news not long ago; Clinton’s advisory team informed him yesterday.

Clearly, our President is full of ambition and can hardly wait to implement his new economic plan.

After the board meeting ended, Dean prepared to visit Price’s List a few miles away.

After several months of adjustments, John and Simon had already revamped the webpage.

Now Dean needed to give it a final check; if the revamped Price’s List looked good, perhaps it was time to promote it.

But Dean had just returned to his office when Durell knocked on the door and came in.

"I heard you’ve got another good idea?"

Dean was taken aback, then smiled and said, "Your nose is better than a dog’s, but whether it’s a good idea, that’s not certain."

"Can you tell me about it?" Durell was very interested in the ideas in Dean’s head.

"Don’t hold out too much hope, because no one can prove it’s a good business, and some shares have already been pre-allocated."

Dean had to administer a preemptive disclaimer; not every business venture granted entry to KeyPoint Ventures.

However, Dean’s warning did not work as intended. Instead, it made Durell even more interested.

"I have an intuition that it might be a grand slam no less significant than Byte."

Durell’s investments weren’t just about the ideas; he also invested in the people.

Dean was certainly the most talented founder he had come across in his nearly ten years of investing.

Durell believed that with Dean’s achievements at Byte Company, any new company he started would not lack for venture capitalists lining up to throw money at him.

So no matter what the idea was, Durell was ready to do whatever it took to get a piece of the action.

Dean was unaware of Durell’s intentions; he just provided a brief explanation.

"It’s related to the internet, which you’re not very familiar with. Put simply, it could make accessing the internet more convenient for people."

"The internet? More convenient?" To be honest, Durell really had no clue.

"You know about AOL, right?" Dean prepared to explain from another angle.

"Of course, KeyPoint Ventures participated in its IPO." It was the first internet company Durell dealt with.

"AOL provides dial-up internet access and some online content services.

But the prerequisite is that users must download AOL’s client software, which usually only defaults to pushing AOL’s content.

However, this idea is different; it’s also a sort of client software, but it can provide users with any content on the web.

This is not just limited to AOL or IBM’s ANS.

It’s just a window, a gateway to anywhere on the internet."

Dean always believed that a browser was not just some simple software; it was more like a high-control interface with a powerful voice.

"Oh~, so it’s more open? And it could potentially be a competitor to AOL?" Durell’s focus was somewhere else.

"No," Dean shook his head, "They could be complementary, or they could be competitors in some ways.

As to how to handle them, that would depend on the leader’s vision."

"That’s a bit complicated," Durell frowned slightly, he still didn’t understand what the real internet was.

But that didn’t dampen his interest in the client software Dean mentioned, "I guess it’s almost implemented, so could I have a look at it?"

"Not for now, we’re still optimizing," Dean shook his head, "Also, it might not be planning to raise funds in the short term."

"Come on~" Durell spread his hands, "No idea can do without venture capital, and KeyPoint Ventures is your best choice.

Our past cooperation went well, didn’t it?"

"I know, and I’m not refusing venture capital. However, I suggest we discuss this after we’ve perfected the product."

Dean’s plans for the browser were the same as his previous approach with Byte Company; he intended to skip the initial angel investment round.

Even more aggressively, he might skip the Series A and B funding rounds as well.

Dean and his team didn’t lack funds, so the unnecessary early stage investments could be dismissed.

Of course, this didn’t mean they would completely reject venture capital; once again, it was important to say that monopolies were unacceptable.

Accounting for various interests, even if only slightly, would make their business run more smoothly.

And venture capital could provide startups with many resources besides funding.

For example, talent; their powerful networks were much broader than Dean’s connections.

"By the way, how is your EO company doing?"

Dean suddenly remembered that Durell’s company had been stirring up some news recently.

Upon hearing his question, Durell smiled.

"I’ve sold it."

Dean looked up in surprise, "That’s really sudden."

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