Lift Off

An adapted excerpt from The Leap: A Memoir of Love and Madness in the Internet Gold Rush, Tom Ashbrook's chronicle of his transformation from newspaper journalist to Web entrepreneur.

By Inc. staff | 
 

Entrepreneur Tom Ashbrook leaps into the unknown

Tom Ashbrook chronicles his transformation from newspaper journalist to Web entrepreneur in his new book, The Leap: A Memoir of Love and Madness in the Internet Gold Rush. With cofounders Rolly Rouse and Shawn Becker, Ashbrook founded BuildingBlocks Interactive Corp., now HomePortfolio.com, an online home-design marketplace based in Newton, Mass. In this excerpt Ashbrook describes the partners' warp-speed introduction to small-business financing. --the editors

It felt like a touch-and-go shuttle launch.

First came the roar and smoke and flames -- of emotion and decision and tearing loose from life's old gravity. The moment when you wonder if the whole thing will break apart before it's even into the blue.

We signed an office lease, personally guaranteeing the rent, before the seed money was in. We had to. We had to keep moving. Up, up, or die. We went round and round with [potential seed-round investor] Rick Segal. BuildingBlocks was taking off, we said. This little company was hot as hell. We were absolutely confident we would raise at least another $1 million before the next six months was out. Did he want in at $500,000 for 10% now, or not?

We were the team. This was the deal. What did he say?

And then we prayed. Almost on our knees. Our little band of staff milled around Rolly's bungalow, charting plans, keeping their heads down, clinging on in hope. It's coming, Rolly and I told them. The money's coming. And our eyes would lock for a split second and widen with the sickening, private awareness that nothing was certain here except desire. It is coming, right? Somehow. Soon. Soon!

In legal terms this is a flat-out crapshoot, a big fat lottery ticket, and you've been warned.

This was a new kind of vulnerability for me. Complete vulnerability. For our immediate needs -- salary for the staff, computers to work on, telephone lines -- there was no time to find other backers. There was no distant headquarters to squeeze. We were it. This was it.

Our steadfast attorney, Gene Barton, wrestled the paperwork and worked the phone. Rolly's eyes were puffy, red-rimmed, resolute -- almost wild with the strain of holding the line. Salamander eyes, [Rolly's wife] Carole called them. We had all read the warning of risk that Gene had insisted start right on the front of the private-placement memorandum, the draft of the document that would solicit the money and seal the deal. The warning was right out there in capital letters, in hideous bold type. It was boilerplate for a deal like this, Gene said. Absolutely standard. But wicked cold. Stone-cold sober, no bullshit whatsoever, so that no investor -- nowhere, nohow -- could ever say he or she hadn't known.

You are stepping straight into the land of naked risk, it announced: The shares of common stock being offered hereby are speculative and involve a high degree of risk and substantial immediate dilution. The company is in the development stage, has a limited history of operations, with no revenue to date, and is subject to all the risks inherent in a business that is in the development stage.

And for anyone who still wasn't getting the picture, there was this charming ice pick of a postscript: Investors must be prepared to lose their entire investment in the company.

Got it? In legal terms this is a flat-out crapshoot, a big fat lottery ticket, and you've been warned.

The noises [from Segal] were good; they were strong. But there was no substitute for the money. The money in the bank. Our bank. Soon. Please, God, soon. Rolly was starting to cover a gap now. He fed in $2,000 to keep us going. "Out of the chute and dead in the water!" he would mutter as we pushed blindly ahead. The roar of the takeoff was shaking us wall to wall. Up, up. More fuel!

And then it was there. Half a million. In the bank.

We held the little bank slip carefully in our fingers, like it was the commutation of a death sentence. Breathing shallow. Reading it again and again.

"Your balance: $503,103."

We had closed our first money -- our seed round, in start-up speak. We were launched.

I sat alone that afternoon in our new, almost empty office, tucked into the top floor of a grand old Methodist church building, with six folding tables from Staples and 10 stackable chairs, and I thought how quiet it must be in the spaceship once the roar of the launch dies away.

We were up. We were out there. On our space shot.

Now we actually had to make it all happen. We had launched the leap. Now we had to make the landing.

And the real education began.

Ed [Anderson, a partner at North Bridge Venture Partners, in Waltham, Mass.] met with us early one October morning in his sleek offices near Route 128. Bill Geary, another partner in the firm, joined us. I knew this was just supposed to be an advisory meeting, but I liked these guys. As they talked, I began to imagine they had read our business plan and were overwhelmed with an urgent desire to invest in us.

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