J.P. Morgan

"from Benetton’s internal advertising agency, United Colors Communications, flew in to meet with us at J.P. Morgan. There had"

"It was a good time to start planning what would be our biggest funding round to date. The delays to our launch, coupled with our incredible growth rate, meant we needed another $20 million to get us through the next two months. For the first time, we weren’t worried about whether we’d get the money. Ever since the media had pounced on our story a month earlier, Chris Bataillard of J.P. Morgan had been inundated with calls from potential investors. “This is going to be very straightforward,’ he told us. One of the first things we had to decide was a new valuation for the company. As always, this was a bit of a guessing game. Since we were still a.company without sales or profits, it came down to one question — what were people prepared to pay? Because of the buzz around us and the internet in general, we decided to double our pre- money valuation to $150 million and see what happened."

"Once we had finished the letter, Edward, Jay and I stayed on to discuss exactly what our restructuring ‘scenario’ would entail. At some point a banker from J.P. Morgan’s New York office, Alexander Fuchs, who had been involved in putting together the private placement memorandum, stopped by and stayed most of the evening. This was the nearest bankers came to being doctors. I half expected him to be wearing a stethoscope. “You’ve got to get your burn rate right down,’ he advised, ‘and cut your staff by 50 per cent. This is your last chance to get your cost structure in shape.’ His point was that because of the five months’ delay in launching our site, we had a very high burn rate which our early revenues did not support. As it would take some time to ramp up revenues, it was vital in the interim to address this imbalance if we were to avoid scaring investors off."

"Three days later, on Monday, 17 January, we delivered our estimated cost reductions to the board. Over the next year our proposed cutbacks would save us $27 million. In total, 131 staff would lose their jobs. Besides Boom, most of the job cuts would be made by scaling down the customer service teams and streamlining the local offices. The figure represented over a quarter of boo.com’s total workforce. The meeting went better than we could have expected. The board approved our restructuring plan and also J.P. Morgan’s revised funding strategy: the bank now planned to raise $50 million from new and existing shareholders and then go straight to an IPO in the second quarter. We had come through yet another crisis, but it was impossible to feel happy. As the meeting broke up and our board members rushed off to catch their planes, I thought: This is the day that we lost our innocence."