BEFORE THE IPO

The Memoir

(This is chapter 28 of my ongoing memoir of the Internet industry.)

The iVillage.com initial public offering was scheduled for Friday morning, March 19, 1999.

Somehow, I realized, for once in my sorry career, I'd played my cards right. I was scheduled to vest in 25,000 shares of iVillage stock over the next four years. I also had an option to buy $30,000 worth of shares at the stock's opening price, a price designed to be artificially low so that early investors, employees and "friends and family" could flip their shares and make a killing on IPO day. This was the maneuver that powered the dot-com craze of the 1990s -- it was all about the opening day price, about the "flip".

And, for once in my life, I was on the inside. For once, I'd be doing the flipping.

There was one big problem: I didn't have $30,000, or anything close. Meg and I had a couple of thousand dollars in scattered accounts, and I was able to obtain $8000 in cash from credit cards. For the rest, I had to borrow from family members -- a risk I didn't like to take. I knew I could ask my parents for at least some of the money I needed, but if iVillage's stock crashed on opening day I would be responsible for paying it all back with money I didn't have.

I hated to borrow money -- I had worked hard all my adult life to be self-reliant. My parents had grown up in working-class first or second generation immigrant households in Brooklyn, and I'd been raised with a sensible no-nonsense work ethic. They weren't likely to be impressed by the kind of financial shenanigans the 1999 dot-com stock game involved, so I knew I'd have to do a lot of explaining to get these loans.

I started making the phone calls. My stepfather Gene was sure the market would come crashing down soon, but he finally agreed that iVillage had a good chance of sailing through the IPO before this happened. He and my mother agreed to lend me a few thousand as long as I agreed not to hold any of the stock more than a day. My father and stepmother also expressed their concerns and then helpfully sent a check. Even so, I couldn't bear to raise the full amount in this way, and had to cajole the rest from Meg's brother Steve, who ran a small auto parts warehouse in the Hudson River valley and had some cash to spare.

All of iVillage was in an excited and transformed state in the weeks leading up to the IPO, though the excitement wasn't all positive. Many employees had only mediocre stock option deals, especially in the tech and editorial departments where a lot of entry-level employees had recently been hired out of college and hadn't known what to ask for. Now they were sadly nursing poor allocations of 300 or 500 shares, all the while sitting next to (and possibly working harder than) other employees who were hoping to reap literally millions of dollars.

I had a pretty good deal for a techie middle manager, though I felt strange about the fact that I hadn't contributed much to the company's good fortune and was now about to cash in on everybody else's work. I was clearly a carpetbagger in this gold rush town, and I made this situation worse by talking too openly about my shares before I figured out that many of my co-workers had worse deals.

I was certainly earning my reward now, though. Technical problems rained on my head during the weeks before the big day arrived. I'd managed to mollify the rebellious sys-admin team by negotiating an unofficial round of salary reviews, but that only freed us up to begin facing our tremendous, killing backlog of server problems. The application development team was also swamped. Our servers crashed regularly. Our search engine was a joke. Our logging and traffic analysis was a worse joke. Our email subscription system was broken, and our message boards kept running out of disk space. Nobody knew who owned our domain names. The advertising sales department felt ignored. And the servers just kept crashing and coming back up, crashing and coming back up.

I wasn't sure what to think when I'd first been told that a new Chief Technology Officer was joining the company. I'd enjoyed being the only new manager in the tech department, but now I'd have a full-time boss. Still, my first two weeks at iVillage had left me in such despair that I could only welcome the help. I was in much suspense, though, as to what kind of manager this new guy would turn out to be. I'd seen many different kinds of tech managers, and I knew we didn't have time to deal with an egotist, or a screamer, or a paper-bound bureaucrat, or a clueless bozo.

I was relieved to meet Rich Caccapollo, a young man with a warm, confident style and a Kennedy-esque haircut. He seemed to know a bit about technology, and he had a sense of humor (which is something I knew he'd need around iVillage).

Once he joined the company, though, my responsibilities became immediately hazy. I was in charge of the system administration and application development teams, but Rich was in charge of them now too, and he outranked me. I decided to take a laid-back approach, avoid territoriality and competition, see how the relationships developed.

The most important thing was to keep the tech team humming along until March 19. I was never very good at "seeing the big picture" at work -- I tend to become way too enmeshed in minor technical problems and petty office rivalries -- but for once I managed to take a step back from my concerns about job security and realize that it really didn't matter at this moment what my specific role was. It really didn't matter much at all.

Maybe it was because I had $30,000 of borrowed money staked up to the upcoming IPO that I suddenly became so good at "seeing the big picture" at work.

When I think back how I personally felt in the days before the iVillage IPO, it seems to me that I must have been more exhausted than I realized at the time. The days often went by in a surreal blur, and I often felt disconnected to the workplace dramas that swirled around me. I felt like I was performing in a play from 9:30 to 5:30 every day, reading my lines.

Why was I even here? I had never been very interested in money. I wanted to be a writer. Somehow I'd replaced one set of dreams with another.

I guess I was pretty hectic around at home at night during the build-up to the IPO. I spent a lot of time talking on the phone, arranging my $30K seed money, following the latest stock market news. I remember the kids asking me what I was so busy with.

"I'm trying to buy and sell some stock," I explained. "If this works out the way it's supposed to, we'll have some more money to spend."

"Yay, that's great! Go Dad!"

I imagine I must have seemed kind of foolish to them at this moment, though they never said so. Indeed, I was foolish. But I was in the grip of it at the time, and the deal was too good to turn down.

This article is part of the series The Memoir. The next post in the series is CELEBRATION DAY. The previous post in the series is A LITERARY LIVING ROOM.
2 Responses to "BEFORE THE IPO"

"Why was I even here? I had never been very interested in money. I wanted to be a writer. Somehow I'd replaced one set of dreams with another."

If I had a nickel for every...

no, too cliche...

How many millions of people have come to the same realiz...

no, let's make it more personal:

Levi, that very thought swirled in my mind as I sat in a bar with a group of Navy boot camp buddies during our first liberty...

better yet, a literary angle:

This might be the thesis sentence for your entire memoir.

mmm, not bad...

by mike on

What a life, smoking joints on the rooftop and now your on the verge of cashin' in big. Like I warned you before the world's not ready for webvan. That little stunt cost me about 1800, but I had a chance to profit if I'd have sold at 31 instead of zero. Now I guess there's a cupcake bubble.

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