The Cast of Characters (so far)

The importance of the team cannot be understated. Team members must fit three categories: they must be (1) unquestioning, (2) believers and (3) willing to work for shares. Oh, and good, though this is of relatively little import.

The following are simple introductions to the key players on payroll (such as it is) or on contract. We will get to know these people better through the stories that follow, but this is a good time to run down the list.

CEO
DC. The grand fromage. As the chief secret holder and grand schemer, DC stands ready, willing and able to tell any key person exactly what they want to hear at any given time: investors are told of great advances, future revenues and imminent buyouts; staff are told of impending deals and foreign investment; women in bars are told of fast cars and expensive vacations. DC's main responsibility is fundraising NOT building the company. In fact, quite the opposite: the company must be able to move sideways to suit the vision of the next investor; forward movement is only temporary until the next investor is found. DC's addictions to sex and alcohol add colour to his glorious, if worn, canvas.

COO
NM. The great poopyhead. It is NM's job to ensure that the money raised lasts as long as necessary. This means governing with an iron fist, controlling the amount of paper used in the office, refusing to pay for coffee and threatening to fire anyone who dares to ask about the payroll that is a week late. Oh, NM is also the head of HR and responsible for the morale of the staff. Lastly, NM is in charge of keeping the books ready for a potential buyer to review. As you will read in an upcoming post, his incompetence in this regard has almost sunk us once; time will tell if it will sink us in the end (My money is on this being the case --though an investor lawsuit for fraudulent practices remains likely).

CTO
TN. Too smart and good for the position. TN, having worked with both DC and NM previously knows that this is likely a con but the idea is too good to resist. TN is also CTO of a very successful software services company and only dedicates himself part time to the show. He loves the business but has a tendency to quit every time the company moves sideways.

Chief Engineer
LX. The sad thing about LX is that he appears to drink the Cool-aid. Always keen, smiling and toiling away, LX must constantly redesign the entire product to suit DC's forever changing vision of the company. This must not be easy, though as long as he thinks that the stream of investment money is unceasing he will remain happy to keep at it. Having a young child makes coming into the office at strange hours to suit DC's whims difficult, but that is one of the costs of being tied to a company that will make him a millionaire --or not. LX gets regular promotions to CTO during TN's absences.

Engineering team
The guys. Software engineers and IT types are made of different mettle than most of us; these guys seem happy to work50-60 hours a week, cancel vacations because a demo has to be prepped for an investor and come in to the office during a snowstorm that has the buses sidelined because DC wants to go over his new vision. I don't know what kind of deal NM has made with the team, I only hope that they are doing better than most --I fear they are not.

The PM.
DM. Working for the man. DM was brought in when a savvy investor suggested that a software company is screwed without project management. Project managers are responsible for charting development, making and maintaining budgets, keeping development schedules adhered to and up to date: basically managing everything that a legitimate software company would do. Prior to the change from a short con to long, DM's primary job was to stay nimble. Anytime she put together a schedule it was obsolete within days. Ditto with a project charter. Forget about budgets, the last thing this company wants is anyone to see a budget. This remarkable woman had to stay on top of and try to document and manage DC's ever changing vision. Once the play changed to actually developing a product (the long con) DM suddenly found herself working like the team: long hours, no days off.... Unfortunately for the company, DM had an actual contract with the company that detailed her working hours --neither DC nor NM are happy with this, but they will not be able to replace her with another dupe at this point.

Accounts Manager
ME. Drank the Cool-aid, then threw up, but not in time. I am a utility guy. In the beginning I sat in on most meetings and my input was valued and praised --though never acted upon. For the first two years of the company I worked essentially for shares; I was also a commissioned salesman for the legacy products that formed the basis of the previous con. Unfortunately these products were demonstrably non-profitable and my revenues fell well below DC's prediction/patter. After two years, I demanded a salary --a move that turned NM into an active adversary, keeping me from meetings and moving me to a position where I could not claim import other than sales. Later I was told that I needed to go back to full commission as I did not have enough incentive to sell given my lack of other duties. In the same meeting I was told that if I brought in a large contract (say a million dollars) I would be paid less than my usual commission as the company would "go broke paying large commissions on large contracts." basically the company is happy to pay me two hundred on a two thousand dollar deal, but If I bring in a million they will go broke keeping only $800,000.00. Argghhhhhh.

Building the Board

An integral part of the facade of respectability for any company of this ilk is the Board of Advisors (BOA). A well built BOA lends instant credibility to any company. Why would anyone question the integrity of a company that has Senior ex-Vice Presidents of Major Telecoms on its BOA? With the right combination of luck and dazzle a mark will buy the whole shootin' match without opening the books because it believes in the BOA.

Mr. Keystone.
The first person on the BOA sets the tone and needs to be researched thoroughly. In our case the local Tech sector has a lobby group headed by a senior and well connected Ex-VP of a major Telecom company, a Mr. Keystone. He fit the bill perfectly. We approached him, made the pitch (not for BOA, just for advice) and he was very interested.

We got him into the office and gave him the walk through: showing him all the mock-ups of our semi-functional solution. He was terribly impressed and asked right then if he could invest. The answer was, of course, "No." It was more important to get his Rolodex than a few grand, so he was told, by NM, that we were not looking for investment at this time and (this is where I got my first hint that I was involved in a con) that were were cash flow positive. (!!!)

We had 15-ish full time staff burning at least $50,000 per month and I knew for a fact that we had not had $100,000 of revenues the past year. I knew this was a lie. I did not know how to react. Falling dumb, I kept silent and later accosted DC --only to be told that were were cashflow positive and that there were parts of the business I was not privy to. (unless he was running coke on the side, he was lying again --I soooo wanted to believe him, but I didn't)

Well, Mr Keystone could not have been more thrilled to find such a gem of a company in his own backyard. We were everything he dreamed of bringing to his friends: young, innovative, cutting edge, on the verge of breaking through to being a billion dollar enterprise --and cashflow positive at this early stage (that is unheard of).

We became Mr. Keystone's pet project and he became the first quarterback of our BOA, bringing in two key people: Mr. Robson another telecom vet and Mr. Finette an economist who specializes in fundraising for emerging tech companies. More on them later.

My Role in the Play

The old company, it turns out was another short con that went nowhere but did manage to amass two or three good sounding customers. The idea was simple: buy a simple technology, sell it to a couple of fortune 500 companies at a huge loss, claim to be a successful business with fantastic clients and sell the company -- My old friend and new boss, DC, actually came close until the prospective buyer asked to look at the books.

Ultimately, DC had been slowly pissing his coin of the realm into this toilet of a software company and was increasingly anxious to morph it into another short con.

Thing was: the old company actually had clients that needed to be kept happy in order to lend credibility to the new iteration.

My role was simple: keep the existing clients happy.

This was easy at the beginning. I tend to speak with authority and people tend to believe what I tell them. Whilst this might appear a fantastic asset on a caper such as this, there is a hitch: I am a terrible liar; so, I don't. People generally believe what I say because I tell the truth (funny how that works).

Q: How does a con artist work with a dupe like me?
A: Disinformation.

DC quickly realized that all he had to do is feed me lies and I would happily pass them as fact. This made me a great asset in investor meetings. That is, it did. Once my knowledge of the company grew beyond the disinformation I had been fed I became a liability. One fateful evening, as we were sitting down to begin the show, an investor asked me a simple question about the company. I answered the question simply and honestly. It never crossed my mind that I was not supposed to tell the truth and when the same question came up mid meeting DC answered with a bold faced lie.

I was not invited to another meeting.

My role had not really changed. I was still the "Accounts Manager" (a title that makes me cringe) responsible for liaising with clients.

The Play

The idea was not unlike a blonde in Vegas: simple and expensive. All DC needed to do was to put together a portfolio of sexy software patents and sell the company for fifty million without having to write a line of code.

To do this he needed a team, total secrecy and, most importantly enough money to build both the patent portfolio and the illusion of a company that would be worth fifty million.

The team was the easy part. My old friend and new boss, DC, had pulled off the same con in the same city and there were still enough people about that were unaware of the devious nature of his previous success. It was vital that these dupes were kept in the dark. I couldn't see a thing.

The seed money was another story.

DC, appeared to be under the impression that his previous con would be simple to reproduce and he was, therefore, quite happy to have his closest friends and family members invest. He was, after all, doing them a favor by bringing them in on the ground floor and there was no question of their quintupling their investment in less than a year (well, eighteen months... tops). His family, and this has become a real issue for the blighter, put in much more than they could afford to lose.

Had DC been a Mamet fan he would have known that you never risk your own hard scammed dough. He wasn't a Mamet fan and he did. Why not? It made perfect sense and was sure to give future investors great confidence. After all, that is what he was selling, wasn't it? He sunk what was left of the profits from his previous cozenage into the latest.

It was enough to convince me; he was risking his future, why shouldn't I?

Besides I was not being asked to invest a dime. All I was being asked to do is liaise with clients (easy, there weren't any) for a year or so and my one percent would be worth a cool half a million.

Why do these things start over lunch?

"I expect you to make more than I do."

"I can't wait to make you a millionaire."

"This time, I want everyone I care about to make more than I do."

Statements like these go very well with East Coast Pita Pockets from the Rumpus Room's award winning kitchen. A beer helps.

DC and I had been Friends for seven years, a friendship that began with his answering my ad for a roommate.

Whilst roommates, we had bonded over women, music, alcohol and the stock market --mostly the latter. I was an amateur trader who was doing quite well in a soaring market (admittedly not a difficult feat) and DC was CEO of a software company that was showing great promise. We rarely ran out things to say to each other.

Then DC, quite suddenly, sold his company for buckets. By my calculations he walked away with a post tax sum of $4.5 million. By his calculations he was the richest man in the world with a winning strategy that could be repeated at will. His confidence was contagious.

A Disclaimer

Whilst the events described in this blog are accurate, names and locations have been changed to protect myself --not to protect the guilty, they can fuck themselves.

The beginning

I was not the first dupe brought into the game, but I was there from day two. Strange how you want to believe, how I wanted to believe.

I had such confidence.



For those wishing to read the posts in chronological order, simply click on the "Newer Post" link just below this line.