Shattered Dreams   

One journalist's adventure in cyberspace began with a promise of ample stock options and visions of serious wealth. The ending, only months later, wasn't quite so happy.

I BLAME MYSELF, REALLY. I knew the so-called New Economy is full of entrepreneurs who promise things they can't or won't deliver. But when I left print journalism for dotcom quasi-journalism, I didn't ask enough of the right questions. Or if I did, I rationalized the answers to perpetuate the illusion that I was making the right choice. (I do the same thing with women.)

In February, after more than three years with Red Herring magazine, I became the one thing that as a journalist I'd always loathed--a startup guy. I joined a San Francisco-based company that was creating a sort of publicly traded mutual fund that would invest in private, venture-funded technology companies. Similar funds already exist, but this was the first to open its doors to nonaccredited, everyday investors.

I actually declined the company's initial offer. Its executives wanted me to run their Web site, but this was a glorified marketing job, and I wanted to remain in journalism. But then they re-recruited me to create a fully independent spinoff Web site to cover venture capital news and analysis. It would "translate" existing news and provide accessible, original content, educating everyday investors in ways established media don't.

I was intrigued. I was interviewing elsewhere for staff writer jobs, but this would make me editor in chief of a consumer site. The rationalization began. As I sat, flattered, listening to the company's chairman and CEO pitch me, I imagined my future self: a hero to the masses, the one who'd finally clarified this VC esoterica for the oppressed minions. And I'd be wealthy to boot.

My delusions were stoked by the zeal of the salesmen before me. The company's chairman has the subtlety--and physique--of a cannonball, possessing the unwavering self-assuredness of someone smart enough to have become a neurosurgeon, but who had scrapped it all to go into finance (which he had). The CEO is tall, gangly and young, with the sincere earnestness of a missionary on his first assignment (which, essentially, he was).

The CEO airily said creating revenues for the spinoff site would be incidental, since the company would reap plenty of income from its investment management business. He amiably claimed that either I could choose to not write about the parent company at all, or I could criticize it--put the boot into it, as we said at the Herring.

The chairman was the closer. He hooked me with his final offer--a 15 percent pay cut from my Herring salary (business technology journalists are paid ridiculously well) balanced by an eye-popping 55,000 stock options in the parent company, plus a 10 percent ownership stake in my Web site, which would become a separate entity once the parent company reached certain very attainable benchmarks. My employment contract allowed the company to abandon the project, but the chairman assured me that it was a go. So I signed.

If I'd been interviewing the company for a story, I'd have viewed their pitch as insanity or stupidity. What viable company so blithely eschews revenues and production costs for any of its projects? Even in this ridiculous economy, their plan for the spinoff site was half-baked, at best. But, blinded by their romancing of me, I bit.

I started as employee No. 22. I was to spend the first few months fleshing out the company's existing Web site--a static, boring mess--then hire another editor to run it so I could focus on the spinoff site. Simultaneously, I'd set up the new site, to be called the Inkubator (get it?). We also agreed that I should recruit a business manager. With the chairman's blessing, I began pitching the Inkubator to my best connections, other journalists.

Like so many startups, mine was young, hip and unshakably enthusiastic. It had the foosball table, the Friday afternoon barbecues and the funky building in San Francisco's trendy SOMA district. The company didn't have stupid, meaningless titles like "chief environment envisioner" or any of those moronic, Human Resources 101 team-building rituals that get so much press. I'd rather sandpaper my eyebrows than look foolish on purpose, and I wouldn't have joined if they weren't smart, serious people.

Even so, I never quite fit in. Slightly older than most of them (I'm 33), working mostly alone, instinctively skeptical of startups' cheery faith, and generally curmudgeonly and unapproachable, it just was not quite "me." I'm much more suited to crabby editorial meetings.

At first, my bosses were generally absent, off for weeks at a time on a fundraising road show. The office was in a holding pattern; the leaders' return, cash in hand, would ignite some very hectic activity. We were like anxious GIs, resting before the big push up the hill.

The delay had other ramifications for me. Because the company was bringing this high-risk venture capital investment opportunity to the nonrich--who are regarded by the government as less savvy and dangerously dupable--it faced heavy scrutiny from the Securities and Exchange Commission, which monitors all its communications with the public. During the road show, the SEC advocated a "quiet period," so only the most basic nonpromotional information about the company could be released. This is similar to the quiet period before a company goes public. Because my company was raising money for a fund whose performance could be swayed by publicity, the SEC prefers companies to remain silent until the money is gathered and the fund is approved for public sale. Because of this, I decided, with our legal department's blessing, to hold new content until the quiet period expired in late April.

Meanwhile, I pursued site editor candidates and pitched the Inkubator to writers, editors, possible contributors and potential business managers. Occasionally I'd daydream about money, doing the math that made my options package total out to more than $2 million, in a best-case scenario. (Anyone who says they don't do the math at least once in a while is a liar.)

We originally had pegged a mid-May site launch for Inkubator. That eventually was moved to late May, then to late June or early July. My bosses wanted to spin out the Inkubator after the company emerged from the quiet period and garnered the increased brand recognition that would come with the publicity that undoubtedly would greet the fund's availability. This made sense, and it gave me more time to get organized.

But I should have recognized the karmic significance of March 29. That day, my car, parked in the alley behind the company's building, was broken into and relieved of about $2,000 worth of stereo equipment and CDs. Ignoring the harbinger, I wooed a young reporter to be my first Inkubator hire. Soon after I e-mailed her an offer in early April, she enthusiastically accepted.

I told her not to give notice at her current job until I sent a formal offer letter. I e-mailed the chairman and CEO, asking if they needed to sign off on the offer letter before I sent it. The CEO's reply didn't answer that question; instead, he suggested we meet the next day, "to discuss our content strategy."

I arrived at the meeting greeted by the chairman and chief operating officer. The CEO didn't attend, though he was in the building. (His e-mail from the previous day was the last contact I had with him about any aspect of the Web sites.) The other two were diplomatic but expressed disappointment with the lack of new content on the site. I explained that this was primarily due to confusion over quiet period legal issues.

But their tone had changed. When I began discussing the Inkubator, a noticeable chill fell over the room. They were suddenly reluctant to trigger my project, saying that they'd like to see how the company's new and improved main site looked before pulling the trigger on the Inkubator. They wanted me to, in effect, audition for it by proving myself on the company's marketing site. That's a little like asking a housepainter to try out for a job by making and selling paint.

I asked if I could send the formal offer letter to the reporter. The chairman said before I hired any writers, I needed to bring in a business manager and create a business plan for the Inkubator's first year or so. Logical, yes, but this was the first time they'd said the business manager hire must come first. One of the things that had made the project so appealing was their apparent unconcern over financing, but I had mistaken entrepreneurial doubletalk for a guarantee.

I said I couldn't recruit a business manager without a firm launch date for the site, and they agreed to have a meeting about that "soon." Afterward, I told the reporter I'd get back to her in a few days.

I e-mailed the chairman and COO the next day, saying I needed to tell the reporter something by that Friday. Then, feeling indignant, I launched into a mild harangue, saying that content-only Web sites bleed money; that mine would be no exception, at least for a few years; and that to have any hope of profits, the company must commit significant resources to the site's staffing and promotion. I concluded by questioning whether they truly supported the project.

With the click of the send button, I seemed to have transformed myself in the eyes of the administration into something akin to a disappeared Argentine. Or maybe Jerry Maguire. I'd committed the startup company's cardinal sin: expressing doubt. I'd dared to wonder whether the emperor was wearing any clothes. (Or, in this case, whether he was willing to pay for mine.)

The fallout was immediate. The chairman, who until then chatted with me regularly, now avoided me like I had the Ebola virus. The COO took me aside and confessed his long-held skepticism about the Inkubator's financial prospects. But he said he'd talk to the chairman about having the launch date meeting ASAP.

The end of the week passed. The following Monday, I e-mailed the reporter, regrettably withdrawing the offer because the project was suddenly in doubt. She was understandably irate, calling me unprofessional, which I couldn't deny. I was tempted to stomp upstairs and quit, but like a cuckold naively hoping something might change, I didn't.

What followed was more than a simple shunning. Frost started to form around my desk. The chairman began unilaterally assigning content development projects to other staffers without notifying me. As the company's content editor, I should have at least been aware of these, if not spearheading them.

My only extensive interaction with the chairman was at a technology conference a few weeks later. As the only ones there from our company, we were forced into several awkward conversations. Trapped, he made a few oblique references to "needing to talk about timetables."

I didn't force the issue because by this time, I was equal parts seething and incredulous. My anger was not really at the apparent abandonment of the project; creating a content-only site, especially in the wake of April's market correction, was perilous. The enraging thing was that they were ignoring me, then acting as if I didn't realize it. For several subsequent weeks, I expected to be fired almost daily. Finally, I realized that for all their entrepreneurial zeal and irrepressible drive, they didn't have the fortitude to do something that confrontational. Rather than can me, they seemed to be hoping I'd just get bored or angry and leave.

Back in the office, I began another job search. My work still got completed, and new content still got posted. But smarting like a jilted lover, I kept a strictly 9-to-5 schedule and occupied my idle time not with venture capital research, but with things like soliciting freelance work, doing crossword puzzles and jotting down my ideas for National Football League realignment once Houston joins the league in 2002.

Feeling my 10 percent stake of nothing--i.e., the Inkubator--slip away, I pored over my original employment contract, looking for anything that might help. The contract was sloppy and ambiguous, at best: It said the company was under no obligation to launch the Inkubator, but later said "when" the site launched, etc., etc. The best gaffe was where it said the company agreed to pay me a monthly income of $80,000, which of course is 12 times what I'd actually been getting.

With me organizing the recruitment, the company hired a new Web site editor in June. This was supposed to free me up to run the Inkubator. But more than a week into the new editor's tenure, nothing had changed. Since my bosses had never set a launch date, I had no business manager and no business plan. Even worse, the news was full of content site failings.

The chairman probably would have let me coast, continuing to draw a paycheck for doing next to nothing. But the ongoing freeze-out and lack of resolution made me paranoid and stir-crazy, like Jack Nicholson in "The Shining." If I didn't get some answers, pronto, the ax was coming out. (Figuratively, of course; I only look homicidal.)

Tired of waiting for them to break up with me, I broke up with them. After the chairman postponed a meeting with me twice and attempted to delay a third time, I finally got him to talk to me, eight weeks to the day after he promised to set a launch date. I told him the Inkubator clearly was dead, but that I understood business is business.

He seemed relieved. He offered to supply me with a reference and agreed to pay me a fair settlement. My hoped-for stock options windfall had amounted to a sum that would help me pay a few bills; doing the math wasn't much fun anymore.

I knew my project was a risky venture; I just didn't think it would turn south so quickly. But logic takes a vacation when one is smitten.