American History 1988
Chapter 336 - 325: All in the Bag

Chapter 336: Chapter 325: All in the Bag

Acquisition? Go Company?

Well, as for the former, Hawkins and his team did approach businesses like Motorola and Compaq to discuss acquisition matters.

But no one was willing to offer a high price, nor were they willing to provide them with adequate stock compensation.

The so-called acquisitions were not intended to be 100% buyouts; as founders, they were entitled to a substantial share of equity.

Otherwise, who would be willing to continue working hard for the growth and development of Palm? It’s the unwritten rule everyone agrees upon.

Let’s set that issue aside for now. However, when Hawkins and his team heard about Go Company, their expressions became subtly complex.

The reason he left GRiD and then started his own business, Go Company was one of the factors to some extent.

He was disappointed that GRiD adopted the operating system from Go Company but also saw the viability of Go Company after it transitioned into a software system company.

"Dean, I heard from Donna that you were once involved in investing in Go Company?" Hawkins faintly thought of something.

"To be exact, I purchased the usage rights for the Penpoint system," Dean directly revealed the trump card he held.

"You mean the rights, not the licensing?" Donna’s eyes suddenly shot an indescribable gleam.

"Exactly," Dean smiled and nodded, "We can modify it or apply it to other systems without worrying about infringement issues."

Jeff Hawkins and the others exchanged glances, each seeing the surprise in the other’s eyes.

Although they had criticized Go Company and even mocked its failure,

that didn’t prevent them from admiring certain ingenious designs in the Penpoint system.

"This is really unexpected..." Hawkins looked at his partners and then started tentatively,

"Dean, if Palm were to accept an acquisition, how much equity could we retain? And what would your valuation of it be?"

Dean didn’t answer him initially but instead turned to survey the modest office space.

Like most startups, Palm’s current office was quite cramped.

They didn’t even have a proper coffee machine, and the tables and chairs were obviously cheap second-hand goods.

The carpet was worn white, and not every desk had a black landline phone.

"How much are Palm’s current assets on the books?" Before making an offer, Dean instead posed his own question.

"Uh..." Hawkins was somewhat vague, "It should sustain us through most of our R&D."

He didn’t know how to respond, as on one hand he wanted to showcase Palm’s self-reliance,

signaling that they were not in a dire financial rut and held bargaining power.

On the other hand, Hawkins couldn’t assert with confidence that Palm wasn’t in need of funds.

If that were the case, what would be the point of their meeting today?

Dean overlooked Hawkins’ small negotiation ploys; his vision had long transcended these petty concerns.

"Okay, let’s be more direct," Dean said while taking out a chequebook from his pocket.

"I’m willing to invest 40 million US dollars for a 70% stake in Palm, and the remaining 30% would belong to you and the other previous investors.

As for how that equity is distributed, that’s your business.

You can use part of this 40 million US dollars to settle returns for other investors, so you can keep more shares for yourselves."

Having said that, Dean had already written the numbers on the cheque with swift strokes.

With a flick of his fingers, the crisp sound of the cheque attracted everyone’s attention.

"By the way, I can hand over Go Company’s Penpoint system to you.

You can do whatever you want with it, modify or reference it...

I think it can provide ample inspiration when you develop a new system, can’t it?"

On one hand was the 40 million US dollars, which far exceeded their fundraising targets,

and on the other was the highly coveted Penpoint system. Dean was right;

it could save Palm a lot of system development time, and those ingeniously interactive designs, Hawkins had long been in awe of them.

"I think..." Hawkins looked at Donna and the others, "our previous investors should be satisfied with the returns now."

"You’re right," Donna and Colligan solemnly nodded, "They will agree, they have received their initial investments back."

The initial supporters of Palm were mostly rich friends nearby, such as the executives of GRiD and others.

The actual venture capital Palm received was almost non-existent.

Since the PDA was not an entirely new idea, there were strong competitors on the market such as Apple, HP, IBM,

and with Go Company’s failure, venture capitalists were skeptical about new PDA companies.

The last investors willing to support Hawkins were not from the venture capital circle but were colleagues or superiors nearby.

For these people, an investment of 500,000 US dollars, which could return 1.5 million US dollars, would make them very happy.

Come on, could there be a higher rate of return on investment? At least not through stock trading.

They were not venture capitalists, nor did they envisage Palm booming later, bringing them a grand slam.

Hence, Hawkins and his associates were utterly confident they could take the remaining 30% equity for themselves.

With a 40 million US dollar injection, Palm’s PDA product was bound to be launched, a fact they were all too aware of.

"So..." Hawkins looked over his team and then back at Dean, "I think this is a fair trade."

"Good!" Dean nodded in satisfaction, "Now give me a timeline, when can our PDA hit the market?"

The lesson learned from Go Company made Dean particularly sensitive to product timelines.

Dragging on would only increase the initial investment costs.

"We’ve developed similar products before, and now we have the Penpoint system as well."

"So I can guarantee that our PDA will hit the market in a year and a half."

Hawkins had calculated the approximate timing, and this was a relatively conservative estimate.

The Zoomer, although not very successful, had nevertheless accumulated valuable development experience for them.

Plus, the unexpected surprise of the operating system brought by Dean was indeed a timely aid.

"Early ’96?" Dean nodded, that seemed like a reasonable time.

"OK, the $40 million in funding will arrive in three installments.

Today marks the first installment, $20 million, and my lawyer will draft a contract right away."

Dean wasn’t alone in coming, his personal lawyer was part of the entourage.

Even because of Dean’s habit of investing on the spot, his legal team had prepared template contracts.

All he had to do was fill in a few numbers and sign his name, and a formal contract would be completed.

Hearing that the $40 million would be split into three installments, Hawkins and his team hesitated a bit, but eventually agreed.

Because this is the tacit rule of the venture capital industry—the speed of capital arrival depends on their development progress.

"My team will follow up on Palm’s subsequent development, and if there are any problems, contact my assistants Anna or Caitlin."

After signing the contract and handing out his check, Dean got ready to leave.

There were still matters to attend to at Netscape, as Explorer was about to launch its own Beta version.

"Oh right, kick that shitty Casio out of the hardware foundry! They’re all OCD and paranoid freaks!"

Dean was deeply displeased with the Neon people’s abnormal desire for control.

They were manufacturing consumer products, not works of art.

Those meaningless details were not worth investing a great deal of energy in.

Dean had certainly not overlooked the failure of the Zoomer.

"Oh~ that’s exactly what we are considering," Hawkins said, turning to look at Rob beside him.

The latter shrugged; he was a Japanese-American.

"I’m waiting for your good news, Jeff," Dean said, packing up his checkbook before rising to leave.

He was decisive in coming, decisive in offering a price, and just as decisive in leaving.

Hawkins had to admit, he was very fond of investors like Dean.

At the very least, he wouldn’t meddle in the product development, and most importantly, he was quick to provide the money.

...

"Jim, how’s the development of the electronic mail system I mentioned last time going?"

"All set, it turned out to be unexpectedly simple."

At least to Clark, an HTML-based email system seemed much simpler than designing a website.

"Excellent!" Dean rubbed his hands eagerly, it was an effective measure he had thought of to increase browser user loyalty.

Yes, it was electronic mail.

It might sound a bit strange because electronic mail had been around for many years.

Why would Explorer gain its own devotees by adding this feature?

That was because, up to that point, all email systems operated based on software.

Take AOL, for example, it also provided email services, but users had to use it on the AOL client.

Others, like CompuServe and Lotus, did the same, including Dean’s own Byte Company.

Byte’s email was embedded in workplace software like Teams or Bit Work.

Its original purpose was to facilitate its use in the workplace.

But, as mentioned before, these email services existed as features integrated into software, not as standalone products.

This resulted in certain limitations for electronic mail: people couldn’t freely discuss non-work-related matters.

Since most of the email systems were based on company servers, their content was not confidential or private to some degree.

So Dean thought, if there was an email account that could operate independently of software, accessible on a web page, it would definitely be popular.

Because that meant people could access their email from anywhere, through the Internet.

It wouldn’t be limited by the client, nor would there be privacy concerns.

And a web-based email, of course, needed to be accessed through a browser.

See, now people had a reason to open Explorer every day.

And it had to be Explorer, because their email accounts were tied to it.

It wasn’t that Netscape’s email could only be accessed through Explorer, but that it provided some unique features.

Now, Dean was ready to thoroughly test the new email system developed by Netscape.

He had already roughly outlined to Teresa and Anderson what he wanted.

It was simple, its functionality far outweighed its aesthetics.

Therefore, the development speed at Netscape was unexpectedly quick.

Search the lightnovelworld.cc website on Google to access chapters of novels early and in the highest quality.