He's after the same effect, in other words, that he felt on the fateful day in 1996 when he tore open the letter commanding him to buy a martial-arts video. "I basically was impressed with how well the letter was written," he says. "I figured if a company can write this good a letter, the video is probably decent. Given what happened, I feel sorry I never bought one."
What happened was this: the very day he composed his own version of the letter, Getson asked his secretary and a couple of customer-service reps to work late, assembling investment packages that would accompany the communiquÉ, which also included a self-addressed prepaid Federal Express envelope. The packages went out just before the FedEx office closed that Tuesday night. It gave recipients a deadline of week's end. He knew it wasn't a wildly popular move. Jobe and Raymond "made arguments against it that made me think, but I knew this was the right thing to do," says Getson.
Priding himself on his understanding of "how persuasion works and how investment decisions are made," Getson used in his composition what he regarded as some of the most effective direct-mail techniques, including scarcity ("Opportunity expires Friday"), exclusivity ("Here is your copy of the letter I sent to key investors"), and reciprocity ("Your support and trust helped us get here. You should be rewarded"). The ultimate effect, says Jobe, "wasn't distasteful, really. It was just more direct than the way I'd seen it done before." (For more excerpts, see "You May Have Already Invested $10 Million!" below.) Before mailing the letter (prospective investors had earlier received the required private-placement documents) Getson asked his lawyer to review it, though he was certain that he "didn't violate any laws," he says. "We just said, 'It's first come, first served. We'll simply send the money back when the offering is oversubscribed.' "
Which it was--by Friday. "No legal fees, no broker commissions, no complaints," says Getson. "Why would anyone have anything bad to say about it?" Indeed, Edward Rosen, who chairs LORE, notes that while "investors may get impatient with the fact that the company keeps needing more capital, I don't hear from them about his fund-raising technique. The guy is good." Not everyone, however, agrees that Getson's behavior has much to do with investors' willingness to show him the moola. "The arrogant attitude didn't accomplish a thing," grumbles Raymond. "They accepted that Marvin and I were impressed with Howard and the product, and that's why they threw their oars in the water with us."
That water, as the venture-capital community was soon to learn, is patrolled by what Jacob Getson describes as "a self-propelled atomic shark" named Howard. By the end of 1996, with his company's revenues at $5 million, Howard Getson began approaching institutional investors. His act, amazingly enough, didn't change. "Don't think I didn't use the same technique with them," he says. "I just did it more subtly." In some cases, apparently, not subtly enough. "He's gone through several institutions, and I know that he ticked one of them off so much that they won't talk to him," notes Raymond.
Not the Benton Cos., though. The venture-capital outfit, based near IntellAgent's headquarters, communicated plenty with Getson, who fired off seven memos to partner David Radman. "At each stage, I tried to think of the critical hurdles and how I could use words to get them past those," says Getson. He also used different methods to send each letter: fax, E-mail, courier. "I didn't notice any carrier pigeons, but I'm sure that would have been number eight," says Radman. In a memo titled "Why Death No Longer Scares Me," Getson toured IntellAgent's history, stressing its proven ability to adapt. (In 1992, when his company had revenues of $100,000, he wrote, "The focus of the business began to change because my family needed to eat.") In "Dancing with Piranhas," Getson explained why good industry analysts sometimes say bad things about IntellAgent. ("They are not trying to find an up-and-coming technology; they are trying to find a safe technology," he says.) Throughout the memos, he sprinkled strategically placed terms such as "sensitive information" and "insider's guide" to convey the aura of exclusivity. "Nothing he did was over the top," says Radman. "I am an information junkie, so every additional piece was an incremental benefit."
Radman's sense of Getson as "very, very intelligent and well versed" mirrored his view of the company's software. Radman notes that beyond standard sales-force-automation applications--keeping a large direct-sales operation well-connected, for example--IntellAgent's software can be adapted in a variety of ways: franchisors can use it to communicate with franchisees; headquarters can keep information flowing to and from distributors. That kind of flexibility should sharpen IntellAgent's competitive edge, predicts industry analyst Chris Pavlic, in a field where, over the past 18 months, competitors like Siebel Systems, Aurum Software, and Clarify Inc. have all gained access to big money, either through a well-heeled acquirer or via a public offering. "Management has taken a nice grassroots approach, and Howard's very up-front in telling you what the actual story is," adds Pavlic, director of industry applications at Aberdeen Group, a market-research firm. "With the market starting to mature, there is going to be some consolidation." Clearly, IntellAgent has become better positioned since Benton opted to invest $2 million last fall, bringing the percentage of the company owned by outsiders to 44%. Raymond, who introduced Getson to the venture capitalists, describes Benton as "a little looser than the rest."
