“I’m here to see Dr. Carmichael,” Georgina announced to no one in particular. A woman wearing a white coat motioned her towards an office at the back of the laboratory. Through the office's open door Georgina saw a man who appeared to be in his mid-thirties looking intently at a computer screen. When she knocked on the door he turned his head towards her; his grey-blue eyes looked directly into hers.
“You must be Georgina Graham,” he said, rising from his chair. “I’m Nate Carmichael. Did you have any trouble finding us?”
“None at all,” Georgina replied. “Thanks for putting my name on a parking space. Nice touch.”
“Take it as my opening salvo in our negotiations,” Nate said. “Let me show you around ZIFIX.”
As he gave her a tour of the laboratories Nate introduced Georgina to every member of his small staff, mentioning each employee’s unique contribution to the enterprise and pointing out, twice, that every one of them had been with him from the beginning. After the tour Nate took Georgina to a small break room where they got coffee and sat down at a metal table, across from one another.
Without prompting Nate began to talk about how he came to found ZIFIX. He had started his research career, he told her, in the laboratory of a scientist who had published a torrent of papers on a particular type of activity within cells that he believed promoted cancer. Nate suspected that the major function of trainees such as himself in this man’s laboratory was to produce results that supported this one idea. When some of Nate’s experimental results cast doubt on this theory, his mentor dismissed his findings as “aberrations” and refused to let him submit them for publication. Later, Nate established his own research laboratory at the medical school and followed up on his earlier “failed” experiments. He quickly identified a molecule that blocked the transformation of cells into cancer. But he had trouble getting grant money to fund his new project. Frustrated, he decided to raise money privately and launch a startup to continue the research.
“How did you come to call the company ZIFIX?” Georgina asked.
“The molecule is called ZIFI,” he explained. “I added the ‘X’ for sex appeal.”
Georgina was taken aback by Nate’s answer but let it pass. “How do you plan to turn what you know about ZIFI into a product that you can sell?” she asked.
“When ZIFI is increased inside the cell it stops cancer growth in its tracks. Most treatments work by attacking something inside the cancer cell, but there are harsh side effects because normal cells are damaged too. What’s different about my approach is that I’ve designed a compound that stimulates an increase in ZIFI production in cancer cells but not in normal cells. The compound triggers the cancer cells to die but not the normal cells. So, the cancer is cured with no side effects.”
“Sounds promising, but getting a drug to market can take a long time,” Georgina said. “How far are you from testing it out in people?”
“I’m still working with cell lines,” Nate said. “I’ve got some mouse studies planned for next year.”
“I see,” Georgina said. The analysts’ reports that she had read the prior evening had warned that most cancer treatments that work in cell lines do not work when they are tested in mice, and, of the few that do work in mice, most fail to work in humans. “I have all the information that I need for now,” she said. “Thanks for the tour.”
Nate walked her to her car. “I’m hoping to get this deal done as soon as possible,” he said. “Any idea about a time frame?”
“It’s up to Mr. Rios,” Georgina said. “I’ll be in touch with you as soon as I hear something from him.” After Nate went back inside, Georgina called Mark. He had good news. The consultant had given a much more favorable estimate than anyone had expected for the market value of the ZIFIX patent. In the consultant’s opinion, several pharmaceutical houses would be interested in buying the rights. Georgina felt a surge of anticipation. There was more money to be made than she had expected. Mark gave her the figure that he had in mind for the valuation of ZIFIX; Georgina immediately called Wahl and relayed it to him. Wahl said that he would get back to her before the end of the day with a decision about the price that Rios Capital would be willing to offer for the startup.
As Georgina drove back to the Inn she thought about Nate. His introductions of his staff had shown her that he knew personal details about every person who worked for him. He had made a point of sharing credit with them for whatever progress they had made, while asserting that the problems that they were experiencing were solely his fault. Georgina concluded that Carmichael might be a refreshing exception to the rule that startup founders were narcissistic jerks. And there was something else. Nate obviously believed that his discovery would make a difference in people’s lives, and this belief had propelled him to do something bold in setting up his own company.
Georgina’s initial impression of Nate as overeager and perhaps desperate was being replaced by a more nuanced assessment of him as a man caught up in the romance of his own discovery. Mark referred to this type of entrepreneur as “road kill.” He regarded such people as dreamers who were easily fleeced—by him—of whatever assets they had managed to acquire. But Georgina believed that visionaries, as she preferred to call them, had much to offer, provided they were properly managed. After all, wasn’t turning the entrepreneur’s vision into reality what investment bankers were supposed to do?
Later that afternoon Wahl gave Georgina the green light on the deal. Even knowing the cutthroat reputation of his firm, Georgina was shocked at how much below market value Rios had decided to offer for the startup. Wahl told her that the offer would be valid only until 10 o’clock the next morning, at which time Rios would meet with them in his office to sign the documents. Georgina updated Mark, who said that he would set up the financing and have the legal papers sent to her by early the next morning. Georgina then telephoned Nate and invited him to dinner at the Inn that evening, saying only that she wanted to continue their discussion. By not sharing that she planned to present an offer for his company, Georgina could maintain the element of surprise that she believed was important to force Nate's speedy capitulation. Shortly after setting up the dinner with Nate, Georgina got a text message from Nick:
got the job will talk tonight luv u
Lauren Wahl was not a woman who tolerated being kept waiting. She was unhappily cooling her heels in the crowded parking lot at Rancho Secreto High School. The fact that the day had turned blisteringly hot made the situation all the more maddening; even with the car's air conditioning turned up to the maximum, the car was far too warm for her liking. Brett had already climbed into the back seat. Typically it was Christopher who was the first to arrive at the car, but he had not yet appeared. Lauren strained to locate him among the teenagers streaming down the ramp that led from the school to the parking lot.
Why did Philip insist on sending their sons to Rancho High? she fumed. She had repeatedly brought the advantages of a private school education to her husband’s attention, but he continued his worn-out argument that it was best for the boys to mingle with people from diverse backgrounds. Lauren found this egalitarian concept patently ridiculous. However, mindful of her husband’s threat the prior evening to quit his job at Rios Capital, she knew better than to raise the issue of private schooling, or anything else involving money, at this time. But Phillip would give in to her eventually, she knew. She would bide her time, wait for him to cool off, and then up the pressure. It always worked.
Her attention drifted to two teenagers standing together at the top of the ramp. She realized that one of the teenagers was Christopher and the other, a girl she did not recognize. Her son’s attitude towards the girl, the way he tipped his head forward as he talked with her, made Lauren instantly alert. She turned to the back seat and casually asked Brett if he knew the girl who was talking to this brother. Brett leaned forward between the front seats to get a better look; seeing Sonia Rousseau, he told his mother that she was new to the school and that her father w
as a horse trainer who worked for Mr. Rios.
Lauren watched as Christopher waved goodbye to the girl and made his way towards the car. She decided that she would not say anything to Christopher directly about this new girl, but there was no way that she was going to permit her son to become involved with the daughter of someone who worked at Rios' barn. Tonight, she would find an opportunity to remind her husband of his high rank at Rios Capital. Then she would suggest to him that he advise Christopher to avoid friendships with the children of people who work for Rios. That should do the trick, she thought.
Nate was waiting for her outside the entrance to the Inn's dining room. “I was afraid that the wind had blown you away,” he said.
“Sorry I’m late,” Georgina apologized. She had been in the hotel’s business center, finalizing the offer letter that she now carried in her purse. “What’s up with the weather anyway?”
“It’s called a Santa Ana,” Nate explained. “Usually the wind comes from the ocean, but several times a year it reverses and comes in from the desert instead. It can get very hot and windy for a few days.”
“Good timing on my part,” Georgina said. The maitre d’ escorted them to at a table for two by the window. They made small talk and then, at Georgina’s suggestion, Nate began to elaborate on his plans for developing his company. Georgina listened attentively, occasionally asking questions. Her plan was to enjoy the meal, gain Nate’s confidence and then make her move over coffee. But, as they were finishing their entrees, Nate said something that surprised her.
“I’m not the right person to lead the company forward,” he said. “What ZIFIX needs at this point is someone with a track record in bringing a biotech product to market. The problem is, I don’t have the money to bring in someone like that.”
Georgina was dumbfounded. She had assumed that Nate would resist giving up any power at the startup, but perhaps he was not blinded by ego as founders so often were. He appeared to see more clearly than she had at first understood that he lacked the necessary business expertise to make his young company a success. Georgina decided that that this was the right moment to present the offer. Telling Nate that she was in a position to help him bring in the talent that ZIFIX needed to grow, Georgina reached into her purse for letter and handed it to him.
As he read, Nate appeared shaken. “There must be some mistake,” he said. “This offer is for 100% of the company. Wahl told me that Rios Capital was interested in making an investment, maybe buying 20% of the company. Wahl never said anything about Rios Capital buying me out.”
Wahl’s deception shocked Georgina. She had come to the dinner prepared to justify the valuation of ZIFIX to a willing seller, not to carry out a double cross. Why had Wahl not warned her that Nate did not expect to sell his company outright? But, mindful of what was at stake for her and her career, Georgina let her professional instincts kick in. She forged ahead, informing Nate bluntly that the offer was valid only until 10 o’clock the next morning, and that it was the only offer that Rios Capital was going to make.
“I’ve been set up,” Nate protested, his lower lip quivering. “This isn’t what I was led to believe was being negotiated. I won’t do this.”
“How do you plan to make payroll next month?” Georgina asked pointedly. Nate had no answer. “Look, you and I both know that you’re going to be completely out of cash very shortly. This way, at least you get something. It’s making the best of a bad situation, and it may turn out better than you expect right now.”
“Once Rios Capital owns 100% of ZIFIX, where would that leave me?” Nate complained bitterly. “They could sell it to a bigger outfit.”
Oh, Rios will sell it, Georgina thought. “They might sell it, that’s possible,” she allowed. “But being sold to a larger biotech company would be good for ZIFIX. Think of it. A larger enterprise can invest more, and it would have the seasoned pros that know how to develop the product and sell it. Any company that bought ZIFIX would certainly want to retain you, because you are key to moving the science forward.”
Nate sat still for an uncomfortably long period. He read and reread the letter. Finally he looked out the window into what was now complete darkness. When he turned back to Georgina, his face was contorted. “I’ll level with you,” he said. “This hurts.”
“I’m sorry,” Georgina replied. “But don’t forget, this is how your employees get to continue working on the project. If you do nothing, they are going to be unemployed very soon.”
“I guess we both know how this ends,” Nate said. In fact Georgina did not know what Nate was going to do. She felt a moment of intense anxiety. Was he going to walk, leaving her to explain to Mark how she had blown the deal? Then Nate extended his hand across the table. “Deal,” he said wearily.
“Deal,” Georgina replied, relief washing over her like warm rain. She shook Nate’s hand. “You’ve made the right decision. You won’t regret it.”
“I hope not,” Nate said, looking unsure. “Would it be OK with you if I headed out now?”
“I’ll stay to settle the bill,” Georgina said. She handed Nate a card. “Here’s the address for tomorrow morning.” Nate put the card in his pocket and left the dining room without saying goodbye. Georgina remained seated at the table with her unfinished dinner in front of her. When the waiter discreetly inquired whether she wished to order dessert, she requested the check. After paying, she returned to her room and called Mark.
He denied knowing anything about Wahl misleading Carmichael, but he was unperturbed by her revelation. Rios was, he said, well known for stretching the boundaries in his business dealings. He reminded Georgina that she was responsible only for her own representations to Carmichael, and not Wahl’s. When Georgina confessed that she had never before felt so conflicted, Mark advised her to get over it and close the deal. He ordered her to call Wahl with the news. Reluctantly, Georgina complied. She said nothing to Wahl about his ruse.
Her evening's work concluded, Georgina called Nick. They had not spoken since he sent the text message about getting the job in D.C. Nick insisted on hearing about her California adventure before giving her the details of the offer. Georgina was grateful for the opportunity to vent. Nick was one of the few people who could put himself in her place. They had worked together in Mark’s group for one year, her first and his last, and during that time they had developed a cordial working relationship but had not become social friends. When Georgina returned to New York after business school, she had reached out to Nick for advice about Mark’s proposal for her to rejoin the group. Over drinks at a bar near the Stock Exchange they had hashed out the pros and cons of being in Mark’s orbit, and then they had decided to continue the discussion at Nick’s apartment. They had been a couple ever since.
Georgina told Nick that she felt like a pig at the trough for going along with Rios Capital's shakedown of Nate Carmichael. Nick gently reminded her that her obligation was solely to her client, and that client was Alejandro Rios. If the deal smelled, it was Rios who had stunk it up, not her. And if the good Dr. Carmichael didn’t have enough business sense to know the value of his company, Nick said, then he should have hired an investment banker to advise him.
Chapter Seven