I wouldn't worry too much about THW and this speculated cash shortage. In fact, to prove a point, I called and asked for the Chairman today and managed to ask him some questions. All without pissing him off.
Here is the result of the call:
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I have been told that as the Chairman of the company he is confident that there is no immediate or long term cash problem as the company is in better shape than ever before.
If there was, which he said there isn't from the company's viewpoint, that he has cash on hand to invest if it is needed by THW and that he has always had fast access to investment cash from his many industry contacts and friends and relatives (very rich relatives) if THW were ever in an need situation.
He said that THW has always been bootstrapped financed and he felt it was important that Brian Leeners as President and CEO move the company forward on this bootstrapped budget the same way they always have. He said that a private placement was planned for last year, but they decided to go without it so they could properly position themselves for the right time.
He said to me that he believes too much big dollar investment too early can be the kiss of death for smaller technology companies and this has been the case for many other companies that received major VC capital over the past 3 years. He said he told Leeners to move THW forward on limited financial resources to feel the pain of success. It teaches valuable lessons in a highly competitive industry. If they succeed on a limited budget wher others fail on a big budget, the proper investment opportunity will come along and it will be properly used when they have the critical mass of award winning products to grow.
When asked if there was a cash problem as speculated, he asked where I was back in the summer of 1997.
He said the only time for any investor to have ever been concerned was when there was a problem back in the summer of 1997. He said it was when they had real problems with the former President and McCallum made a decision back then that he wouldn't use his own cash to pay this former President to leave with the demand of a big comp payout package. He made it clear to the former President that the company would have to operate on its own or fail and that he had a choice. It didn't fail in 1997 and he said the company is miles and miles ahead today from where it was back then, and they now have Leeners as President and CEO. This was all planned by McCallum since early 1997.
He said he believes, as does Leeners, that this bootstrapping method has proved to the major investors in the US that the company and founders of THW can and will continue investing back into the company and will develop top tools with very little cash. When critcal mass hits, it will hit because it is time.
He confirmed that Totally Hip will be in San Jose on Wednesday and that he and another THW representative will be meeting with and presenting the THW investment opportunity to over 40 Silicon Valley financial firms (Institutions and Venture Capitalists)that have been brought together by Apple Computer for this major invitation only event.
He also confirmed that they have turned down some US based investment scenarios recently because he and Leeners both agreed that it wasn't in the best interest of all shareholders and that other investment plans are in the process.
When asked about Macromedia. He said, don't you read or follow the rumor mill press. MacCentral said it best. No deal. THW will continue with its QuickTime tool strategy.
He believes that Totally Hip is really moving forward since January with LiveStage and WebPainter 3 and that new products will be released soon which will also help. He said events in the not too distant future will see Totally Hip in the major limelight.
My guess is NAB (April 17-19) where I hear that Apple will announce QuickTime 4, their streaming version of QuickTime.
He said that this exposure to get THW in front of the Silicon Valley investment community has been planned by people at Apple for some time and THW's award winning QuickTime tools and rich media focus is the real reason they are attending.
He confirmed that Apple is a huge promoter and backer of Totally Hip and LiveStage and they want to see Totally Hip gain major financial backing at this event.
Since the Chairman is doing the presenting, you can imagine that he is working hard with Leeners to pull together a major financing so that the THW team can fulfil their full plans for QuickTime based tools.
And don't count Apple out for possible investment. I asked if this was possible, he wouldn't comment. Why?
My guess is that Apple may be more interested than anyone admits to. It makes sense for Apple to invest in or acquire Totally Hip because of their QT expertise. Apple picked up Final Cut video editing tool from Macromedia because it was important to Apple. If LiveStage is important to Apple, Apple will not let anything happen to Totally Hip. And I hear Apple was very pleased to hear that Totally Hip wasn't interested to be acquired by Macromedia.
Wait until after Wednesday. My guess is that THW will never have to worry again about bootstrap cash resources in the near future. This Wednesday's event in San Jose has been the audience they have always needed and wanted. |
