Page 64 of Broken Brothers

I walked to Andrew Patel and shook his hand. He had a weak grip, which already felt like a massive red flag and began to confirm my suspicions from the flight about his leadership. Obviously, that did not correlate perfectly with how effective or ineffective of a leader he might have been, but if Edwin Hunt liked to repeat anything besides “the art of the deal” or some variant of that phrase, it was how you could judge a man based on his handshake.

Not that he ever realized some cultures just don’t value handshakes as we do. But whatever. I’m Chance, not Edwin, so I’ll make my own judgments… and so far, Edwin kind of has a point.

“Good to see you, Chance.”

Then again, the way in which he spoke suggested some measure of confidence. I won’t pretend that Andrew had the charisma of a President or the charm of a socialite, but he at least wasn’t some bumbling fool or awkward programmer type who had stumbled onto a goldmine of an idea.

“Perhaps it would be best to convene outside for some privacy?” he said.

“That would be great, sure,” I said. “Most San Francisco offices don’t have, well, a private office, huh?”

“Oh, no, I want my peers to feel like they can approach me and they’re on the same level.”

It struck me more and more with each passing moment how unlike the cultures of the west and east coast were. Edwin Hunt didn’t just want his employees to know they were beneath him, he would often go out of his way to remind them of their inferior status. Andrew Patel wanted to share an office with an employee.

It amused me, thinking about Edwin Hunt having to share an office—hell, share a hallway; no, not even, share an entire floor—with anyone besides a young, cute secretary. The very thought almost made me burst out laughing as Andrew and I walked outside.

“So, tell me about your situation,” I said as we began a slow stroll through the hilly streets of San Francisco. “You want $5 million for 10 percent, correct?”

“Um, yes,” Andrew said.

There was something in the way he answered that made me believe he’d pulled those numbers out of a hat. I had examined their product and their numbers enough to know that he probably hadn’t had the most rigorous analysis of what his company was worth, but this was even less than I had assumed.

“And how did you come to that?”

“Well, we currently make about $5 million in revenue a year, and it seemed like with the market size that was a good number to push for.”

Revenue. Not profit.

“Let me ask you something, if you don’t mind,” I said. “You said revenue. What is your profit?”

Immediately, Andrew became tense. Not in a confrontational or negative way, but in a way that suggested he had perhaps exaggerated some numbers before. That, or he just didn’t know how to run a P&L ledger or any sort of number crunching. He was a programmer at heart, not an MBA studnet.

“Honestly, Chance, we are losing money each month.”

There it is.

That news in itself wasn’t a death kneel, but what it did do was tell me two things. One, Andrew was a terrible negotiator and would allow me to create quite the sweetheart deal for myself and Morgan. Second, for as much as Andrew had a great business idea—one with enormous potential at that—he did not have the business skills to run it. Perhaps my thoughts earlier about taking it over and inserting myself or Morgan into the company were not all that dumbfounded.

“Well, I appreciate the honesty,” I said. “We’ll need to look more closely at your numbers to come up with an appropriate evaluation, and I’ll show you how we did it.”

I knew I was taking a risk, of course, given that some other investor could blindly agree to $5 million for 10 percent. And really, they would have not made the worst decision in the world. The hiring of a CFO could easily position them to be worth far, far, far beyond $50 million within five years.

But Morgan had a relationship with Andrew. I was beginning to form one. If he started to feel like he was losing his grip on the sale, I could always offer my expertise as a CFO or, at worst,financial consultant. Andrew seemed honest enough to know his weak points, and me filling them would have to be a nice benefit.

I felt my phone vibrating but ignored it. I had a feeling, though, when I checked, I would not particularly feel certain about what the text really wanted to say, regardless of which girl it was from.

“Of course,” Andrew said. “This is all new for me, you know. All of the money we’ve raised so far came from my parents and family.”

“As does happen with many startups,” I said casually, although thinking about how much money they must have gone through to that point made me wonder if the Patels were like the Hunts in their coffers. “The important thing is to make sure we both work out a deal that makes sense for both of us. But let’s not do that in front of your employees, OK?”

“Well, if you think that’s best, but I like to be open and honest.”

Oh man. It really is a different world out here.

“And you can be open and honest about the end result, sure, but a lot of these negotiations need to be private for the sake of not just you but us,” I said. “It’s pretty standard.”

“OK,” Andrew said, although he did not seem particularly convinced. “We can do that. Hold on, I’m really sorry, but I have to take this call.”