Ed's Wizzo Wheeze

'According to my mate, how the wheeze works  is that, before the IPO, we make a bid for another company', adds Ed, 'preferably an all-share bid which means we'll have to re-jig our options provisions -and in muddle of the re-jig I'll have the 180 day scrubbed.'

'The snag is,' reflects Ed, 'I've got to persuade the VCs that the company needs this acquisition, and that it will increase the company's IPO value. Otherwise they'll smell a rat.'

A few days later, another entry in Ed's diary starts: 'The VCs are going for the acquisition. I've identified a small RF company with a cellular front end which would fit with our baseband modem and would mean we could get into Tier One telecoms customers which we can't do now with just the modem The CEO is keen to be bought out. Our bankers can arrange a share issue to finance the deal. All that's left to do is fix the board.'

'Today I presented to the board', writes Ed a few days later, 'one of the engineers from the company we're acquiring explained the fit between their technology and ours, and an outside industry analyst (paid by me) gave a presentation showing how the combination will expand our potential customer base. I also give them a copy of the bankers' proposals - which the CFO grabbed and read voraciously.'

'He must have been on a speed-reading course', added Ed, 'as the bit about my lock-up period is right at the end. The little bugger pipes up: "Under this agreement you get no lock-up period, while the rest of us have 180 days. Is that it?"'

'Well . . . . Yes . . .  That's about it," I reply.'

'"You're a scumbag, Ed," says the CFO, "you get the same deal for us or it's no deal."'

'There's a growl of assent.'

'Greedy bastards', Ed tells his diary, 'I'll have to go back to the bankers and get a deal for them all. Still, it'd only 74 days till the IPO, and then I'll be in gravy up to my eyeballs.'