Living On Minor Miracles

“There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle.” -- Albert Einstein

I'm the type of guy who likes to plan and control things in business. This includes things like projects, product launches, budgets, business activities and company capitalization.

When I threw my hat in with El Presidente and Lefty, I lost the last vestiges of control of my life, and those two goofballs live on minor miracles when it comes to capitalization of our company.

Mythical Megacorp Ltd. is the company we formed. I am third in the chain of command behind El Presidente and Lefty. Those two bozos are attached at the hip and share a common wall of two empty brains. If they hadn't hid it so well when they were wooing me, I would not have signed on. Being third in the chain of command, means that I have no voice at all.

Take company finance. We are a startup company, and the revenue streams that we generate, are still not enough to sustain the company, and the salaries of me and the other employees for an extended period of time. Every three months we run out of operating capital.

So what does El Presidente do? He has a circle of rich friends, and by chance he has convinced some of them to invest in the company. When he lands a live investor, we have to do a dog and pony show. We demonstrate our product in the most Mickey Mouse manner (with due apologies to Disney). While this makes me cringe, El Presidente and Lefty beam at the hokey theatrics.

When we get down to our bottom dollar and payroll is just a week away, El Presidente makes desperate phone calls to his friends and previous investors, urging them to drop more money on the company. Half of the investors are doctors, and I swear that if I was ever going to pull a Bernie Madoff, I would concentrate exclusively on medical doctors. Getting them to part with their hard-earned money is easier than getting money from any other profession.

So today, El Presidente had a previous investor in for another round of pocket fleecing. This time the mark, I mean investor, brought his accountant with him. The amazing thing is that we have had so many rounds of financing that we have run out of shares. So what those bozos do, is obfuscate the percentage holding of the company. If a mark comes in with say $200,000, he is told that he is getting 40,000 shares at $5 each. The next person who delivers up $200,000 gets shares at $8.00 each. Since it is private capital, there are no laws that I know of that are being broken, however I have heard both Lefty and El Presidente tell some people that the company is fully capitalized a week before they go out for more money. Lefty sighs and says that the equity is over-subscribed by 6%, but will work the figures to meet the payroll.

This scares the crap out of me. I know that we won't crash and burn, because El Presidente is a millionaire, and would be ruined in his social circle if Mythical Megacorp Ltd. crashed and burned. He has sold shares to some of the most prominent people in our community, included Mr. Muckety Muck who is our chairman and one of the leading lights. Mr. Muckety Muck was named to the board to add prestige to our startup.

So every few months, we live on minor miracles hoping that El Presidente call pull off another round of financing that will last a few more months. At each round of cash injection El Presidente is sure that this is the last one before the business can support itself. However Lefty can't seem to launch any product because he doesn't believe in planning.

The ironic bit is that the business idea is quite viable. I keep telling El Presidente that we could get venture capital or angel investing. Hell we could even get a loan at a merchant bank in the right circles. Or we could find a corporate partner with deep pockets. However El Presidente and Lefty own about 45 percent of the equity, and they do not want to get diluted.

If we went for a strategic round of financing and brought in say, $5 million dollars, we could get to where we want to go in no time. Money is the fuel of growth. However, El Presidente and Lefty cannot see that 10 percent of a $50 million dollar company is worth more than 25% of a one and a half million dollar company. And Lefty actually enjoys squirming away and putting off competitors, even though his nails are bitten down to nothing and he has already suffered one heart attack.

But what these jerks are doing, is making me live on minor miracles as well. Like everyone else, I have bills due at the first of the month, and sometimes they can't pull off their minor miracles and bring money in until the 7th or 8th day of the month, and everything is in shambles when my checks bounce. Of course, they never reimburse me for the bank fees.

But as I previous iterated, I own the intellectual property of the company, and Lefty and El Presidente have forgotten that it is not transferred to Mythical Megacorp Ltd. And other major companies are expressing interest in buying us out, if we can generate revenue.

So my thinking cap is on. I do not want to exercise the intellectual property trap on them yet. I could stage a board of directors coup d'etat and remove them if I can convince the other equity holders to vote to remove them, however I do need a strategy as most of the investors are their friends. However, one thing is for certain. If it came to a choice of friendship or losing money, our investors would ditch El Presidente and Lefty in the wink of an eye. I have to figure out how to engineer that. I have to do it delicately in this quiet war.