Hackoff.com – Chapter Seven

I just finished Chapter Seven of Tom Evslin’s Hackoff.com, a murder mystery that takes place in the Internet bubble and aftermath.

This chapter takes the reader through the practice of doing a secondary offering.  A secondary offering is a public offering of shares in a company that usually takes place around six months after the IPO.  There are two primary purposes of doing a secondary, the first is raising more capital for the company, and second allowing the insiders (management and VCs) sell a portion of their stock in an orderly manner.

Tom does a good job illustrating how all of this works.  His narrative on the negotiation between the VCs and the management over allocating the secondary is particularly enjoyable reading (particularly having lived through that exact negotation with Tom).

But the best part of this chapter is Tom’s description of doing a secondary while the market for his stock is collapsing.  Tom lived through that particular hell and he tells the story well.

Regardless of whether you plan to read the whole book, Chapter Seven is a great read and can easily stand on its own as a wonderful lesson on secondary offerings.