I listened as he laid out his proposal. Some of it was enough to make the toughest accountant's eyes glaze over. There was stuff about S corporations and C corporations and capital gains taxes and distributions and shares, and God only knows what else. After about an hour and a half, I made the time-out sign. "Okay, so we can do this, have it be legal, not go to jail, and make a few bucks. Let's go back to the questions I posed a couple of weeks ago."
He nodded. "Okay, correct me if I'm wrong, but the percentage of shares would be based on the amounts we have invested. If I have $49 million and you have $1 million, then I have 98% of the votes, right?", I asked.
"Right." He tried to expound on this but I just waved him off.
"Okay. So it doesn't matter what our titles are. You can call yourself the Queen of the May, but I still get 98% of the vote, right."
He grinned at that. "Right!"
"Okay, ground rule two - everybody coughs up some dough. Did you have a figure in mind?"
At this, Jake got a little more nervous. He was almost stammering, as he said, "Well, I wasn't sure what you had in mind, but I would imagine we can all come up with about $100,000." He almost said this as a question. I simply gave him a half smile and made a thumbing gesture, indicating 'Up!' "$150,000?"
I smiled again. "Let's make it simple. I want to see a real commitment from anybody involved in this, and setting this up will take some cash. If you want in, let's make the buy-in an even $250,000, a flat quarter million."
That woke them up, but nobody ran screaming from the room. Well, Jake Junior looked like he was about to puke. John and Jake Senior slowly nodded, Missy nodded even slower. Jake Junior started sweating. His father had to put his hand on his arm and say, lowly, "Don't worry, we'll handle this."
Missy asked, "What did you mean by setting this up would take cash?"
"Well, if we are going to do this for real, make the Buckman Group a real company and not just a business card and a mail drop, we'll need an office, some desks, furniture, computers, a bunch of stuff. Stuff like a real company."
She nodded in understanding. "Anything else? You had three rules."
"Well, it sort of goes with the real company, idea. No man can serve two masters, that sort of thing. You can't work for other people, too."
She nodded easily. "That won't be a problem for me. To be blunt about it, you are far and away my largest client. They already tried to take you away from me last year, remember?"
I vaguely remembered getting a phone call from somebody at the investment firm's Private Investment Group (PIG, nice acronym!) last year, suggesting how they would be better suited to handle my accounts, rather than a mere broker. I had turned them down, and then called Missy to ask what was going on.
Missy continued, "My bet is that I can save you enough on commissions to cover any salary I might get, as well as what I'll lose out elsewhere. The capital upside is worth it in any case. I'm in."
John was a touch slower to respond. "I have enough savings that I can convert some of it to cash. However, I do have a problem with suddenly dropping all my other clients. I can certainly agree to not take any more on, but I will need time to unravel the rest of my practice."
Jake Senior agreed with John, although he had a partnership to transfer clients to, and would need to unravel the partnership. His son looked like he was swallowing a turd; he didn't have clients beyond the accounting partnership, and wasn't a partner, and he had nowhere near a quarter-million dollars to invest.
I nodded in understanding. "Okay, here's a counterproposal. John, you and Jake have two years to unwind everything outside of the Buckman Group. Missy and Jake Junior, you can start immediately. Your shares vest immediately; theirs vest 50% now, 50% in two years, or whenever they are fully with the Buckman Group."
Jake and John nodded slowly at this, and I could see the gears working in their minds. I kept on. "Here's something I've been thinking about. I think that $49 million figure for me is probably accurate?" Jake Senior nodded and shrugged. "Okay, that makes the $1 million buy-in equal to 2%. Let's make things sporting, and give everybody here an incentive to do this right, and not just ride along. Over the next five years, we will automatically increase that 2% to 10% with a stock option program. Does that sound interesting?"
There was dead silence at the table. Everybody was running numbers in their head, but the gist was simple. They cough up a quarter million now; they make many, many millions down the road.
"Sign me up!", breathed Jake Junior quietly. Missy gulped and swallowed, and nodded wordlessly. Jake Senior nodded.
Only John said anything, "So in five years..."
I smiled at him. "So, we do this for real. What happens if we grow this company to $1 billion in assets? You guys are splitting 10%, or $100 million. That makes you each worth $25 million. Are you in?"
Suddenly it was my old friend sweating. "Sweet Jesus!", he muttered.
Jake Junior smiled broadly. "I'll start doing the paperwork!"
John muttered, "Unbelievable!", and then he put a hand on young Jake's arm. "Okay, start your paperwork, but until we do this, I am still legally Carl's lawyer, and so are you. This violates about a zillion ethics rules if we don't get a third party to vet the paperwork."
"Agreed.", said Jake Senior.
Missy solved the problem. "I know some guys who know some guys. I'll get somebody from New York to review it all, an outside source." The others all agreed with this, and we broke apart. In the meantime, we would continue going as we had been, and the others would start making their plans for coming up with the buy-in.
In the meantime, something interesting happened. I was contacted by the State Department! It seemed that the Bahamian government wanted to give me an award or a plaque or something for helping their police catch that gang of robbers. They wanted me to come down to Washington to receive the award. I told them I'd let them know.
They had contacted me through John, who I had listed as my contact back when I was talking to Assistant Superintendant Javier. He asked me what I was going to do.
"Ignore it, I think. I have zero interest in going to Washington.", I told him.
He gave me a disappointed look and shook his head. "Don't be silly. If you ever want to go back to the Bahamas and not be persona non grata, you go down to D.C. and make nice. You should know better than that!"
"John, this is all blown way out of proportion to what really happened."
"So what? You go down, you make nice, you come home. Everybody is happy. Take Marilyn. Smile. Do I have to do all your thinking for you?"
I just rolled my eyes. "Yes, Dad, I'll behave."
I called back the under-under-under-assistant who had called me and arranged a date to come down the next week. Then I called my wife. She was kind of excited about it, and hung up on me and called Tessa. Tessa and Tusker would watch Charlie for a night, and we would go down and spend a night in Washington. I wasn't all that thrilled by the concept. Washington was built in the middle of a malarial swamp following a tug-of-war between Maryland and Virginia; Virginia won, and the capital was carved out of Maryland. It would be very warm and humid the day we stayed.