Chapter 267: Club

"I didn’t know last night," she said. "I figured it out at six forty-five this morning."

"You were working at six forty-five," he said.

"I’m always working at six forty-five," she said. "That’s not new information."

He looked at his coffee.

"What are the additional thoughts," he said.

She walked him through them. Clean and precise, the specific quality of someone who had spent the early morning properly with the material and had arrived at three things worth discussing before the Fischer call.

He listened and asked two questions and she answered both and then they worked through the scenario three assumptions with the easy directness that had developed across three weeks of doing exactly this.

By seven twenty-eight they had covered everything.

"Ready," she said.

"Ready," he said.

A brief pause.

"Sean," she said.

"Yeah."

"The cap table analysis," she said. "Marcus and Derek built this."

"Yes," he said.

"They’re campus investment club students," she said.

"Graduate students," he said. "One of them has been tracking sector volume patterns for months for his own analysis. The other built a regulatory compliance model that quantifies an advantage the market hasn’t priced yet."

"How old are they," she said.

"Marcus is twenty-two," he said. "Derek is twenty-three."

A pause. "And they built this."

"Yes," he said.

"The third scenario assumptions," she said. "The ones you answered yesterday. Where did those come from."

"The club meeting Thursday," he said. "Someone asked a question that reframed the assumption. I updated the analysis Friday morning."

"Who asked the question," she said.

"Mia," he said.

"The research assistant at Elena Voss’s office," she said.

"Yes," he said.

"She’s nineteen," said Clara.

"Yes," he said.

A longer pause. "You have a very specific group of people around you."

"Yes," he said.

"I’ve been thinking about that since Friday," she said. "Since the restaurant. The people you build things with." She paused. "They’re all genuinely good at specific things and you found them and gave them something real to apply those things to."

"They found themselves," he said.

"Sean," she said.

"Yes."

"Don’t do the distributing the credit thing," she said. "We’ve discussed this."

He almost smiled.

"Okay," he said.

"Okay," she said. "Fischer in two minutes."

—----------------

Laurent Fischer joined the call at seven thirty-one.

One minute late, which from a London-based fund manager at seven thirty AM local time for him meant he’d been ready since seven twenty and had decided one minute past the hour was the professional call.

His voice was the same as the first call. Measured and unhurried, the quality of someone who had been in enough significant rooms that significant rooms had stopped requiring anything particular from him.

"Good morning," he said. "Ms. Weston. Mr. Miller."

"Mr. Fischer," said Clara.

"Laurent is fine," he said. "We’re going to be talking regularly. Formality becomes inefficient."

"Clara," she said. "And Sean."

"Good," said Fischer. "I’ve reviewed the cap table analysis that came through Friday evening. I have questions."

"Go ahead," said Clara.

He asked four questions in sequence. All going to the specific assumptions worth examining, the same quality of question she’d asked Sean on Sunday and that Mia had asked at the investment club Thursday. The pattern of someone who read things completely before speaking about them.

Clara answered the first two.

Sean answered the third, which went to the sector dynamics underlying the second scenario.

Fischer was quiet for a moment after Sean’s answer.

"The regulatory compliance advantage," said Fischer. "Your analysis prices it as a passive advantage that becomes active in eighteen months. I think that timeline is conservative."

"Why," said Sean.

"Two of the jurisdictions in your model have accelerated their implementation schedules in the last three weeks," said Fischer. "The compliance requirement that your model puts at eighteen months is running at twelve in those markets. Which means Vertex’s advantage activates earlier and against more competitors simultaneously than your second scenario assumes."

Sean looked at the cap table analysis open on his laptop.

He thought about Derek’s regulatory model. About the specific data Derek had used for the timeline assumptions.

"The implementation schedule change," he said. "When did that become public."

"Last Thursday," said Fischer. "Late in the day. It won’t be in your data."

Clara was already typing.

"If the timeline compresses to twelve months," she said. "The second scenario numbers move significantly."

"By my calculation," said Fischer, "approximately thirty-one percent upward on the compliance-related revenue projection."

Sean looked at the whiteboard.

He picked up his phone and texted Derek.

Regulatory implementation schedule for jurisdictions two and four. Check the update from last Thursday. Call me when you have it.

Derek replied in three minutes. Already looking. Give me twenty.

"Laurent," said Clara. "If the timeline compresses to twelve months and the revenue projection moves the way you’re describing. How does that change your view of the round size."

A pause.

The specific pause of someone who had been waiting for exactly this question and was now deciding how precisely to answer it.

"It suggests the round size in your analysis is conservative," said Fischer. "The company with a twelve-month compliance advantage in multiple jurisdictions simultaneously is worth more than the company with an eighteen-month sequential advantage. The cap table should reflect that."

"What size are you thinking," said Clara.

Fischer told them.

The number was larger than the parameters the board had discussed Wednesday.

Clara wrote something on her notepad.

Sean looked at the number.

"That size changes the dilution calculation significantly for the founders," said Clara.

"Yes," said Fischer. "Which is why the terms need to be structured carefully. I’m not proposing a number that dilutes the founders beyond the point where they’re driving the company. I’m proposing a number that reflects what the company is actually worth in the compressed timeline scenario."

"You’ve already modeled the term structure," said Sean.

A brief pause. "Yes," said Fischer. "I have some thoughts. I’d like to share them with Clara first, in writing, before we discuss them on a call. So there’s time to consider them properly rather than react to them in real time."

"That’s the right way to do it," said Clara.