The Underwriting (2 page)

Suits flashed their security badges as they streamed into the building, all of them hoping that today would be the day a deal would come that would take them from being a cog to designing their own wheel. Today, Todd realized, was his day. Josh might be an arrogant prick, but he was going to make Todd one of the most powerful investment bankers in history. Holy shit, this was huge.

NICK

W
EDNESDAY
, M
ARCH
5; S
AN
F
RANCISCO
, C
ALIFORNIA

“I know you don't like talking about money, but as the chief financial officer of this company, it's my responsibility to tell you that we have no choice but to raise more capital if you want to keep this vision alive,” Nick Winthrop said determinedly into the mirror. “I want to very firmly recommend we pursue a public offering.”

He stared at his bare-chested reflection and tried to visualize Josh's reaction.

“Now, I know you hate Wall Street,” he said, preempting the CEO's imaginary protests, “which is why I've gone ahead and prepared this PowerPoint deck outlining each firm's track record and filtering the top ten who ought to be invited to the bake-off.”

He couldn't say no to that. Even Josh Hart, the computer science wunderkind who had created Hook and seemed to take pride in his lack of business acumen, couldn't argue with Nick on this point. Which meant Nick just had to get Josh's sign-off on the IPO, and then Nick could quietly call the top investment bankers in the world and have them suck up to him for weeks, all for the right to have their name in the deal that would turn Nick's equity stake into eighty-five million dollars in cash and, more important, put him in a position to have the kind of global impact he deserved.

Nick had been reluctant to take the position at Hook. He had graduated from Stanford in 2004 and started his career at McKinsey & Company, the number-one-ranked management consulting firm in the world, where he'd excelled. He'd left after three years to join Dalton Henley Venture Partners, where he became the mentee of Phil Dalton, one of the most respected venture capitalists in Silicon Valley; Phil had written his recommendation to Harvard Business School, where Nick was a Baker Scholar, i.e., the cream of the cream of the crop in the business leadership community.

While at HBS, Nick wrote the business plan for ApplyYourself, which would completely disrupt the university application market by forecasting a user's likelihood to get into the various top programs around the country. The company would start with the Ivy League + Stanford, like Facebook had, then grow to all universities and, eventually, create prediction algorithms for the job market, too.

When Nick had shown the business plan to Phil Dalton, however, Phil had suggested Nick should instead apply to the open chief financial officer position at Hook. Nick had been devastated: he was ready to be an entrepreneur, not the CFO of a company started by someone younger than him who hadn't even gone to business school.

But when Nick had had his first success in failing (all good entrepreneurs had at least one failure) by not raising his one and a half million, he'd remembered that adaptability was another core component of entrepreneurial success, and so adjusted his definition of prestige to confidently accept the CFO role, along with a 0.5 percent equity stake in Hook.

When Hook had started to take off last spring, growing to over five hundred million users and capturing international media attention, Nick had had a profound moment of faith in the universe's plan for him.

That plan, he knew, would make him a person who had real impact on a global scale, and he could feel in his veins that he was on the precipice of becoming one of the world's great leaders.

Nick took a deep breath and collected himself, glancing down at his pecs admiringly. The CrossFit package he'd bought on Groupon last month was really paying off, equipping him to be at his best when magazines started photographing him for covers. He traced the line forming around his shoulder muscle with satisfaction and plopped to the ground to do ten push-ups, just for good measure.

It was six thirty in the morning, but Nick was wide awake as he punched the button on his Nespresso machine to make a
forte
, sprinkling organic cassia cinnamon into it in order to regulate his glucose levels, a trick he'd learned from
The 4-Hour Body
. He checked his iPhone to see if Grace had texted since he had last checked ten minutes ago, and told himself to relax when he saw she still hadn't: she was a hot girl and had a right to play it cool, and he was a cool guy who could roll with that.

Still, he wished he could tell her what a big deal he was about to make happen—to see her face when she realized what kind of guy she was dating. But the deal would have to stay strictly confidential until the S-1, a hundred-page legal document detailing the investment opportunity, was filed with the Securities and Exchange Commission, and that would take months. He made a note to book a table at Gary Danko every Friday in May to celebrate.

He finished the espresso and put the mug in the dishwasher, wiping the handle of the machine with a Lysol cleansing pad to remove his finger smudge from its stainless steel finish. He checked his iPhone one more time—nothing—and zipped his Dalton Henley–branded fleece vest as he headed out the door to make the short walk to Hook's headquarters.

This was his favorite hour of the workday: the engineers didn't clear out of the office until the early morning hours, and the HR staff didn't get in until around ten, so for now the pristine, just-constructed glass office on San Francisco's Embarcadero was all his own.

He held his hand to the state-of-the-art security sensor outside the building's entrance and took the elevator to the sixth floor. He crossed the main floor where the computer programmers sat; it was cluttered with stuffed animals and colorful plastic balls that had spilled from the ball pit in the corner. Next to it, a life-sized gorilla doubled for a helium machine, which the engineers used to fill managers' offices with balloons on their birthdays, and, more often, to get high.

Everything about this space made Nick anxious. Converting it into an acceptably professional workspace was the first thing he was going to do with the IPO proceeds. He didn't care what the engineers had to say about it.

He reached his corner office and relaxed, embracing the purity of his pristine personal space.

“Hey.”

Nick looked up, startled, at Josh's form in the doorway. “Oh, hi.” He took a moment to process. “What are you doing here?”

“I was coding,” Josh said. The bags under his eyes were dark and heavy and his head twitched, tilting ever so slightly to the right and straight again. “Lost track of time.”

“Nice.” Nick smiled affirmatively. Another lesson he'd learned from Phil Dalton was to always encourage engineers when they got lost in their coding.
You may not understand what they're doing, but great things come out of those late nights
, Phil had said, and Nick had written it in the Moleskine notebook he carried with him to write down wise advice.

“I need you for a meeting at eleven on Friday,” Josh announced, turning to leave.

“What for?”

Josh turned back and his head twitched again.

Nick had never figured out what set off the Hook founder's twitch, but he'd learned to ignore it. If anything, Josh's quirks just meant Hook would need a different face for all the press that was going to happen when the company went public, and Nick was humbly willing to accept that role. There was a tradition at HBS where all the MBAs put ten dollars in a pot to give to the first person in the class who got his pencil drawing on the cover of the
Wall Street Journal
, and Nick realized with confidence that it was going to be him. Take that, Stephen Hartley. Who's the coolest guy in school now?

“L.Cecil is coming in,” Josh said without further explanation.

“What?” Nick sat forward. “Why is L.Cecil—”

“They're taking us public,” Josh said. “And they're coming in Friday.”

“What are you talking ab—” Nick started, shaking his head. “You don't make those decisions, Josh. I'm Hook's chief financial officer and that is a financial decision.”

Josh stared at him. “It's my company.”

“It's
partly
your company.” They had talked about this before. “You have a responsibility to your invest—” He stopped himself, remembering that the IPO was what he wanted, and feeling like this was one of those times when he was fighting for the sake of winning, something he'd gotten negative feedback for in business school. He said slowly, calmly, “There's a process, Josh. And, as CFO, I should be in charge of that process.”

“I know,” Josh said, “I don't want anything more to do with it.”

“I mean, there is a process for
picking
a bank,” Nick said. “You have to do a bake-off and then banks pitch you and you select based on—”

“Why?” Josh's eyes bored into Nick's. Nick felt his face flush.

“Because—” he started. They couldn't just skip the bake-off. Banks had to suck up to them. “Even if you could, L.Cecil is a terrible choice. Have you seen the news? They're under investigation for trading—”

“I know,” Josh cut him off, his head twitching. “That's what makes them a good choice.”

“What?” Nick squinted. L.Cecil hadn't even made his list of bake-off participants. “How can you possibly think that?”

“They're desperate for business. They need us.” Josh stared at Nick; he was irritated that he had to explain his decision. “Always put yourself in the power seat, Nick. Don't they teach you that in business school?”

Nick's blood boiled. It was bad enough when Josh was arrogant about computer things, but business decisions were Nick's domain.

“Actually, at HBS we—” Nick protested.

“The guy I've hired has nothing to do with the scandal anyway.”

“What do you mean ‘the guy' you hired? You don't just—”

“Todd Kent. I met him two years ago at CES,” Josh said. “He's running the whole thing.”

Nick's voice caught in his throat. “Todd Kent? Todd Kent is the coverage banker you picked?”

“Do you know him?” Josh studied Nick's face.

“We went to school together.” Nick's head started to pound. “Undergrad, not business school. He didn't go to business school. I'm sure he couldn't have gotten in.” He said it automatically, spitefully.

Josh smirked. “Good. You can catch up at the meeting.”

Nick watched a ball from the mess outside roll into his office as Josh left. He picked it up and crushed it in his hand before hurling it back at the empty room.

TODD

W
EDNESDAY
, M
ARCH
5; N
EW
Y
ORK
, N
EW
Y
ORK

“You screw this up and we're fucked.” Larry's neck was pulsing like a pit bull's.

“I know, man. I totally get it.”

“I'm not talking
you
fucked. I could give a shit about your year-end.” Larry's voice loosened a tiny bit at the power he had over Todd's bonus, but then wound up again when he remembered getting cut out of a deal in favor of his junior employee. “I'm talking about
me
getting fucked—about this group—about this division—fuck, this whole fucking bank.” Larry paused to take a breath before starting in again. “Jesus fucking Christ. These fucking Silicon Valley fucking idiots.” Todd was silent. “Get out of my office before I cut off your cock.”

Todd concealed a laugh as he shut the door. Poor guy.

By the time Todd had gotten to the twenty-seventh floor this morning, where he sat with the rest of the Technology, Media & Telecom group, he was confident that Larry had to be cut out of the Hook IPO. Josh was right: Todd Kent was the man to lead this underwriting, not just because he was a great banker, but because he carried the cachet the app company needed to really convince the markets of its fourteen-billion-dollar valuation. No matter how much experience Larry had leading deals, he was old and going through a divorce resulting from his wife's discovery of his porn addiction. Definitely not the brand Hook was going for.

Todd walked proudly across the floor, carrying a confident smirk so that everyone who turned—and everyone did turn—knew that Todd had come out on top of whatever was behind the muffled shouting they'd just overheard in Larry's office.

“What'd you do to set him off?” Kal Taggar, the other senior VP in the group, asked without looking up as Todd took a seat at his cubicle in the block of six.

“You know Hook?”

“Obviously. Why?” he said to his computer screen, where he was filling in his NCAA tournament bracket.

“They're going public.” Todd paused, anticipating Kal's reaction to the punch line. “And Josh Hart wants me to lead the deal.”

Kal turned in his seat, his jaw hanging. “What do you mean, Josh Hart wants you to ‘lead the deal'?”

“I mean he wants me to be in charge of it—no bake-off, I pick the team. Only caveat is no ‘slick dicks,'” Todd said in air quotes.

“You mean no Larry?” Kal laughed. Todd nodded. “Holy shit,” Kal said with a mix of resentment and respect. “You fucking bastard.”

Todd grinned. His phone rang and he picked it up merrily. “Todd Kent.”

He sat up a little straighter when he heard the voice on the other end.

“Todd, it's Harvey.” There was only one Harvey in L.Cecil: Harvey Tate. The seventy-year-old executive had once led the most important investment banking deals on Wall Street.
Had once led
being the operative words. Under the banner of a senior vice chairman title, he now spent his time dispensing clichéd wisdom and taking credit for deals he had nothing to do with from his massive corner office on the forty-second floor.