Late 2000 to late 2001: the SG Cowen offer, the wedding-circuit introductions, MR-DIBS confidence — and the note Hare blocked when the sky fell
In late Fall 2000, Consilient held a committed $15 million preferred financing at a $135 million pre-money valuation — $150 million post, the reconciliation that settles the record's three competing figures, with more term sheets circling. One year later the reference price on the same company was a $15 million valuation on a convertible note Hare judged predatory — and blocked with his own money, borrowed against locked-up stock. The two prices bracket the bubble exactly, and the lesson between them is the one the architecture is built on: redundancy inside a correlated environment is not redundancy, and capital that reprices with the weather cannot hold a coordination layer.
The trail exists so that people who were there can reconstruct their own memories, recognize what they helped incubate, and add to or correct the record — or forward the few pages that belong to someone they know.
By late 2000 the customer evidence was real and plural: Intel, AIG and Cisco as revenue; a $10 million pipeline at BP alone; partnerships in motion with CommerceOne, Ariba, SAP, Siebel, PeopleSoft, Oracle, ABB and General Electric; buzz across the top consulting firms and integrators. Evolve — my first startup — had gone public in August, lead-managed by Frank Quattrone's team at CSFB after every top bank competed for it: by my count one of the last three technology IPOs before the bust, with everyone praying the bubble would hold. John Doerr had assured the era it was impossible to overhype the Internet, and my verdict on that line, twenty-six years on, is on Doerr's page with its sting intact.
I ran the situation through the test I had built writing nuclear-plant safety software at Impell: MR-DIBS — Multiple Redundant, Independent, Backup Systems. Multiple customers, multiple partnerships, multiple term sheets, multiple banks: pass. My own retrospective summary of the resulting state of mind is preserved verbatim in the source record — in the era's phrase, I became convinced my shit no longer stank, and that I could maneuver through anything, as I had at SPA, Blyth, Tesseract and Evolve. The record publishes the phrase because the whole episode is its refutation, and I filed it myself.
Société Générale's venture unit — SG Cowen in the US — was the first to firm: $15 million preferred at $135 million pre-money, in late Fall. The introduction had traveled through the social graph, not the professional one: Sheena Singh's Paris circle, adjacent to the two-week Indian wedding with its two hundred models, its assorted European nobility, and Bismarck's great-granddaughter in my traveling party — or possibly on the return from Budapest via the unscheduled Warsaw detour. The email archive holds the introducer's name, and the ask is filed. Meanwhile I worked the analyst rounds through friends at the top of the profession — Charles Phillips at Morgan Stanley, later co-President of Oracle, and Michael Mauboussin of CSFB, known first from the Santa Fe Institute — and was connected to Ray Lane, then President of Oracle, through SFI trustees. The dictation cuts off mid-sentence exactly there, and the record says so.
Under the conventional raise, I was building something the term sheets couldn't price: a pooled financing model in which enterprises would pool investments into a primordial many-sided structure — Exchange Networks and Resource Pools implemented with clever legal agreements, a generation before cryptographically verifiable ledgers could hold them: the Accelerator Network, prototyped in contract law. By my account only one person really understood the full transformation on offer: John Browne — who happened to run a company with a $130 billion market cap, $160 billion in revenue and $14 billion in profits, and who assigned Hayward and Leggate to help implement it. My rueful arithmetic, published as mine: I asked Browne for a $10 million lead — well under the man's discretionary threshold — and probably should have asked for far more. Under-asking the one counterparty who understood is its own entry in the lesson ledger.
The context for every decision that season was the comparison I could not stop running. Oak Hill Venture Partners was, in my blunt retrospective assessment — marked as mine — a no-name third-tier venture player: the small side-business of a $10 billion hedge fund run by Stanford professors, with Michael Spence and Myron Scholes respected as investors but not as venture capitalists. Meanwhile Vinod Khosla was demonstrating what a top-tier machine does. At Asera, which he co-founded with Bunny Weiss. And at FireDrop — renamed Zaplet — whose product was superficially Sitelets' twin and structurally its consumer-grade shadow, and which my DC and intelligence-community network described to me flatly as a cheap knock-off of Consilient's technology. Khosla found the team at a houseboat party, took a founder-level stake in a $5 million seed, drove a stepped-up Series A with Venrock, then a $90 million round at a $900 million valuation in which the lead 'set the price' while investing below pro-rata. My analysis of the mechanism, published as mine: top-tier leads aren't valuation-sensitive and aren't really pricing anything — they make a market in late-stage followers, and the press release, the runway and the recognizable names do the actual work. I had the better technology and the third-tier cap table, watched the lookalike raise nine figures on market-making, and contracted what I name in the source record as a severe case of KPCB envy — which is the precise state of mind in which a founder sets aside a closeable $135 million term sheet to chase a marquee name. The mechanism and the envy are the same fact, seen from two chairs. Zaplet's patents eventually sold for a low six-figure sum, which is the epilogue the mechanism doesn't put in the press release.
Then the correlated failure MR-DIBS had no column for: the bubble burst, budgets froze together, term sheets evaporated together, and September 11th finished what the spring had started. By 2000–01 the reference offer on the table was Oak Hill's: $5 million as a convertible note at a $15 million valuation — a price that would have crushed the common shareholders, and which my page-of-record assessment, marked as my opinion, calls opportunistic and predatory. I blocked it the only way available: lending the company $1.5 million myself, senior to Oak Hill's existing money, funded by a margin loan from DB Alex Brown against Evolve stock still under lock-up — and raising another $1.5 million from a dozen angels, employees and friends on my personal guarantees, against a burn near $1 million a month. Those are the guarantees that were called after September 11th, and that I honored. The full account is source record S-023; this episode exists to put the two prices in one frame.
$135 million to $15 million is not a story about one company's worth; both prices were quotes on the same underlying assets, twelve months apart, and neither was information about Consilient. That is the indictment: venture-style capital reprices with the weather, and a coordination layer — infrastructure whose value compounds over decades — cannot be held by capital whose conviction has a one-year half-life. The connection why venture capital cannot hold this traces the general argument; the Accelerator Network and the Liquidity Pool are the structural answer — pooled, patient, many-sided, with the commitment mechanics in the substrate rather than in anyone's nerve. And MR-DIBS survives, upgraded by its own failure: independence must be structural, not enumerated. Backups that share a sky are one backup.
A nuclear engineer's redundancy test, a wedding circuit that produced a $135 million term sheet, a founder who filed his own bubble-era arrogance verbatim, and a margin loan against locked-up stock to block a $15 million shakedown twelve months later. Same company, same year, both prices wrong — because the capital was quoting the weather. The architecture's financing layer exists so that the next builder of infrastructure never has to guarantee the payroll personally while the sky changes price.
Episodes are building blocks. The same material appears in more than one where it belongs in more than one, and every claim traces back to a primary source.
$15m preferred at $135m pre-money, firmed in late Fall 2000, from discussions begun on the BP trip. What happened to it is an open ask; what happened instead is source record S-023.
Open →In the graphMultiple Redundant, Independent, Backup Systems — developed at Impell for nuclear safety software, applied to everything since
Open →In the graphThe Paris friend whose circle produced the Société Générale introduction — and the sabbatical's social center of gravity
Open →In the graphOne of the Wall Street friendships of the Evolve era; the analyst rounds ran through him
Open →In the graphThe complexity community and Wall Street in one person — which is also this record's whole thesis about where the ideas travel
Open →In the graphThe legendary banker whose move from Morgan Stanley to CSFB decided the bake-off
Open →In the graphComplex-adaptive-systems enthusiast via the Aspen Institute; Oracle's technical champions connected the dots; the deal-clout Hare was looking for
Open →In the graphThe Aspen lunch, and passions that ran to sustainability
Open →In the graphThree rounds, a silver bullet, and the end of Hare's tenure
Open →In the graphNuclear safety systems — and a position outside orthodoxy
Open →In the graphA $10m lead investment in crowdsourced solutions — in 2001
Open →In the graphThe oil CEO who was actually an environmentalist: Beyond Petroleum, the fuel-strike week, and a vision Wall Street refused to fund
Open →In the graphThe geologist in line for the top job, met privately at Browne's request — and the safety application they worked on together carries the record's heaviest irony
Open →In the graphGroup CIO without an IT background: North Sea driller, president of the Baku operation, hilarious, and the best guide to BP a vendor ever had
Open →In the graphFireDrop, renamed; Khosla from a houseboat party; $900m paper valuation; merged into MetricStream 2004; patents sold for a low six figures
Open →In the graphSun's Java chief, hired as Zaplet's CEO in June 2000; a rivalry that never cost the relationship
Open →In the graphA friend at the seam of venture and intelligence; the sponsorship that made Hare a regular at In-Q-Tel
Open →The account this was distilled from, preserved as dictated — verbatim and immutable.
Read the source →In his own words · S-023The account this was distilled from, preserved as dictated — verbatim and immutable.
Read the source →In his own words · S-063The account this was distilled from, preserved as dictated — verbatim and immutable.
Read the source →In his own words · S-073The account this was distilled from, preserved as dictated — verbatim and immutable.
Read the source →The record and the architecture are not separate arguments. Each of these mechanisms exists because of something in this episode, and each is what the episode turned out to require.
The episode is the story. The explainers are the mechanism — what problem it solves, how, and where it would fail.
The mechanism in full, with the condition that would defeat it.
Open the explainer →Quantum RecognitionThe mechanism in full, with the condition that would defeat it.
Open the explainer →Consilient Innovators NetworkThe mechanism in full, with the condition that would defeat it.
Open the explainer →Quantum Privacy NetworkThe mechanism in full, with the condition that would defeat it.
Open the explainer →These are specific and addressed to named people. If you are one of them, or know one, a single reply closes an item that has been open for twenty-five years.
Write to evidence@qpncatalyst.io. A timestamped confirmation comes back with your submission attached, as your own independent record — and the correction is published with your name on it.
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