Chapter 56: Northstar

Victor Hale didn’t immediately sit down.

He simply stood beside the glass wall of the conference room, one hand resting loosely against the back of a chair.

Damian remained near the doorway.

"What do you mean?" he asked.

Victor finally looked at him.

"The company you’re negotiating to buy."

Damian waited.

"You’ve reviewed the revenue."

"Yes."

"Customers?"

"Yes."

"Debt?"

"Some."

"Technology?"

"I’ve had a consultant review it."

Victor nodded slowly.

"Then you’ve done more than most people who come through here."

Damian pulled out the chair and sat.

"But?"

Victor sat across from him.

"But you’ve been looking at the company like you’re buying a software business."

Damian frowned slightly.

"Isn’t that what I’m doing?"

"Not entirely."

Victor folded his hands on the table.

"You’re buying a company with shareholders, contractual obligations, existing agreements, employees, customers, intellectual property, and a relationship with Northstar that you haven’t fully understood yet."

Damian leaned back.

"Michael told me Northstar has a minority financial interest."

"He did."

"And a board seat."

"Yes."

"Protective rights."

Victor nodded.

"Over certain major decisions."

Damian stared at him for a moment.

"That sounds important."

"It is."

"Why wasn’t it in the information I received?"

Victor’s expression barely changed.

"That’s a question you should ask Michael."

"I did."

"And?"

"He said Northstar helped the company when things got difficult."

Victor gave a small nod.

"That is true."

"So what’s the part I’m missing?"

Victor leaned back.

"The investment agreement."

Damian’s expression changed slightly.

"What about it?"

"There are conditions attached to the shares Northstar owns."

Damian was quiet.

Victor continued.

"If Michael sells his shares, you don’t simply walk in and become the unrestricted owner of everything he currently controls."

Damian’s fingers tapped once against the table.

"Because of Northstar."

"Because of the agreement."

That distinction mattered.

Damian noticed it.

"So what happens if I buy Michael’s shares?"

"That depends on the transaction structure."

"Meaning?"

"Northstar has approval rights over certain changes in ownership and control."

Damian stared at him.

"So I need your approval."

"For certain aspects of the transaction, yes."

"Would you approve it?"

Victor smiled faintly.

"You’re asking the wrong question."

Damian raised an eyebrow.

"What should I be asking?"

"Why would Northstar approve it?"

That shut Damian up for a second.

Victor wasn’t threatening him.

That was almost more interesting.

There was no dramatic warning in his voice. No attempt to intimidate him.

He was simply explaining the situation.

Damian leaned forward.

"Fine. Why would Northstar approve it?"

Victor studied him for a moment before answering.

"Because we don’t automatically oppose changes in ownership."

"That’s reassuring."

"It wasn’t meant to reassure you."

Damian almost smiled.

"Okay."

Victor continued.

"Northstar invested in the company because we believed it had potential. Michael built the product. Customers came. Revenue followed."

"And then it stalled."

"Yes."

"And now Michael wants out."

"Yes."

"And Northstar doesn’t want to lose its investment."

Victor nodded.

"Exactly."

Damian looked through the glass wall toward the city below.

Traffic moved between the buildings far beneath them.

"So what does Northstar want?"

Victor didn’t answer immediately.

"That depends on what you’re planning to do with the company."

Damian turned back.

"Why?"

"Because if you’re planning to buy it, keep everything exactly as it is, collect the existing revenue and eventually sell it again, that’s one conversation."

"And if I’m not?"

"Then it’s another."

Damian narrowed his eyes slightly.

"I haven’t even decided if I’m buying it yet."

Victor smiled.

"Good."

"Good?"

"You should not have decided yet."

Damian sat back.

That was the first thing Victor had said that actually sounded like advice.

"Then let’s make this simple," Damian said. "Tell me what I’m dealing with."

Victor reached for a folder on the table.

He pushed it across.

Damian opened it.

Several pages were highlighted.

Northstar’s original investment.

Board rights.

Shareholder agreements.

Transfer restrictions.

Certain decisions requiring approval.

Damian scanned the pages.

His eyes stopped.

"There’s more."

Victor nodded.

"There usually is."

Damian continued reading.

The company wasn’t simply Michael’s anymore.

Northstar had invested years ago under terms that gave it protections if ownership changed significantly.

There were also clauses concerning intellectual property, debt, and certain strategic decisions.

Nothing immediately screamed disaster.

But it was complicated.

Very complicated.

Damian closed the folder.

"So if I buy Michael’s shares without dealing with this first..."

"You could own a large portion of a company without having the level of control you think you’re purchasing."

Damian exhaled.

"That’s annoying."

Victor actually laughed.

"That’s your reaction?"

"What do you want me to say?"

"Most people become nervous."

"I’ve spent the last few weeks finding problems with this company."

Victor nodded.

"Fair."

Damian tapped the folder.

"How much does Northstar own?"

"Seven percent."

Damian paused.

Seven percent.

Not enough to control the company.

But enough, combined with contractual rights, to complicate things.

"And the board seat?"

"Non-executive."

"Who holds it?"

"I do."

Damian looked at him.

"So you’re the person I have to convince."

"No."

Victor’s answer came immediately.

"I’m the person explaining what you need to understand."

Damian studied him.

"Who makes the final decision?"

"Northstar’s investment committee."

"Then why are you here?"

"Because they don’t meet with everyone."

Damian smiled slightly.

"That’s a nice way of saying you’re screening me."

Victor didn’t deny it.

"I suppose it is."

Damian closed the folder again.

"Alright."

Victor waited.

"You’ve looked into me?"

"Of course."

"Anything interesting?"

"Enough."

Damian gave him a look.

"That tells me absolutely nothing."

"It wasn’t supposed to tell you anything."

For the first time since entering the building, Damian laughed.

"Fair enough."

Victor leaned forward.

"Your investment in Westbridge caught our attention."

Damian’s smile disappeared slightly.

"Why?"

"Because you’re young."

Damian waited.

"And?"

"You invested when the company was considerably smaller."

"Yeah."

"You became involved beyond simply providing capital."

Damian didn’t answer.

"You’ve also recently increased your position."

Damian looked at him carefully.

"You’ve been watching Westbridge?"

"We watch the market."

"That sounds vague."

"It is."

Damian leaned back.

"Are you interested in Westbridge?"

"That’s not today’s discussion."

"Fair."

Victor tapped the acquisition folder.

"Today’s discussion is whether you understand what you’re trying to buy."

Damian looked down at the papers again.

He did now.

At least more than he had thirty minutes ago.

"This changes the valuation."

Victor nodded.

"Potentially."

"Because of the restrictions."

"Among other things."

"And Michael knows this."

"Yes."

"He still offered me the company for $2.1 million."

Victor’s expression remained neutral.

"Michael is motivated to sell."

"That much I figured."

"He wants to move on."

"And Northstar?"

"We want our investment protected."

Damian thought for a moment.

"What happens if I walk away?"

"Nothing."

"Northstar keeps its seven percent."

"Yes."

"Michael keeps the company."

"Yes."

"And eventually?"

Victor shrugged.

"That depends on Michael."

Damian looked around the room.

He had walked into this building thinking he was negotiating over price.

Now he realized price might not even be the hardest part.

He pulled out his phone.

"Can I take these documents?"

"Copies."

"Obviously."

Victor slid a second folder toward him.

"This contains the relevant agreements."

Damian took it.

"I’m going to have my lawyer review everything."

"You should."

"I’m also going to have Maya look at the intellectual property side."

"Good."

"Marcus will review the financial obligations."

"Good."

Damian stood.

Victor remained seated.

"You’re taking this seriously."

Damian looked at him.

"I have five million dollars."

Victor said nothing.

Damian continued.

"I’m not trying to turn five million into four because I got excited about buying a company."

Victor’s expression shifted slightly.

Not quite a smile.

More like approval that he didn’t want to show.

"That’s a sensible way to look at it."

"I’ve made enough mistakes already."

"Have you?"

Damian thought about it.

"Probably."

Victor stood and extended his hand.

"Then don’t make this one."

Damian shook it.

As he turned toward the door, Victor spoke again.

"One more thing."

Damian stopped.

"If you continue with this acquisition, don’t negotiate only with Michael."

Damian turned around.

"Who else should I be talking to?"

Victor’s expression became more serious.

"The customers."

"I already have."

"Good."

"The employees too?"

"Yes."

Damian nodded.

"Anyone else?"

Victor paused.

"The person who originally built the software with Michael."

Damian frowned.

"Michael built it."

"He founded the company."

"That isn’t what I asked."

Victor’s silence answered enough.

Damian stared at him.

"Who?"

Victor looked toward the window.

"Her name is Rachel Morgan."

Damian waited.

"What does she have to do with the company?"

Victor looked back at him.

"More than Michael has probably told you."

Damian’s grip tightened slightly around the folder.

Another problem.

Of course.

He almost laughed.

"Does she still work there?"

"No."

"Does she still own anything?"

Victor didn’t answer immediately.

"That’s something your legal team should determine."

Damian nodded slowly.

"Right."

He opened the door.

"Thanks for the warning."

Victor’s voice followed him.

"It wasn’t a warning."

Damian glanced back.

"What was it?"

Victor’s expression remained calm.

"Due diligence."

Damian smiled.

"Fair enough."

He stepped into the hallway.

The elevator doors opened a few seconds later.

As he stepped inside, Damian looked down at the folder in his hand.

Northstar.

Seven percent.

Approval rights.

Transfer restrictions.

Rachel Morgan.

He had started with a company that looked cheap because it was struggling.

Then he discovered customer concentration.

Then outdated infrastructure.

Then Northstar.

Now a former co-founder he’d never heard about.

Damian pressed the button for the lobby.

The elevator doors closed.

"Definitely not buying it yet."

His phone buzzed.

A message from Emily.

Emily:

You busy?

Damian looked at it.

He smiled.

Damian:

Yeah, a little. Just finished a meeting.

Three dots appeared.

Then disappeared.

Then appeared again.

Emily:

Okay love. Just wanted to check on you.

Damian’s smile widened.

Damian:

I’m good. You okay?

A longer pause this time.

Emily:

Yeah. Just tired.

Damian stared at the message for a moment.

Something about the reply felt off.

Not enough to prove anything.

Just enough to notice.

Damian:

Get some rest then babe.

Emily:

I will. Love you.

Damian typed immediately.

Love you too.

He sent it.

The elevator reached the lobby.

Damian slipped his phone into his pocket and walked outside.

The city was already getting busy.

He stopped near the curb and looked at the folder again.

The acquisition wasn’t dead.

Not even close.

But it wasn’t the simple bargain he’d initially imagined either.

And that was fine.

He had learned something important.

A cheap company wasn’t necessarily a cheap opportunity.

Sometimes the expensive part wasn’t the price.

It was everything hiding behind it.

Damian looked at the folder one last time.

"Let’s find out what I’m actually buying."