Three rounds, a silver bullet, and the end of Hare's tenure
This is Jonathan Hare's account, with its provenance shown. The person or organization named has not yet claimed or corrected it.
Led three rounds into Consilient, totalling roughly $30 million. Michael Spence was a partner and took the Vice Chairman title at Consilient.
Jonathan Hare distinguishes two things sharing a name: Oak Hill Capital, the public-markets side where Myron Scholes and Jamie Alexander worked and on which Mark Wolfson was primarily focused; and Oak Hill Venture Partners, whose team drove the Consilient decisions. With the public markets cratering in 2001, the senior figures were occupied elsewhere.
Hare's account of the firm's unusual model: partners could invest in whatever they liked, borrowing from Robert Bass on full-recourse notes — so they carried genuine downside exposure, unlike a conventional fund taking a 2% management fee and 20–25% of the upside without personal risk.
A later record (S-073) adds the structure's design rationale in Hare's telling, and the page carries it alongside the account of how the structure behaved: the $5 million uncapped convertible converted at Oak Hill's option — PIPE-like rather than venture-standard — deliberately built so that a strategic financing with an inflated face valuation could not hand Oak Hill a forced conversion at a bad price, while leaving Hare free to raise from diverse ecosystem sources. Incentives carefully aligned for the world as designed; the record's standing observation is what the same instrument became in the world as it arrived.
Each entry below carries its own provenance — the source, and how it was processed. That is the condition on which this graph can be extended by anyone without degrading.
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.
Oak Hill offered $5m as a convertible note at a $15m valuation, which would have heavily diluted the common shareholders. Hare blocked it by lending the company $1.5m himself, in a note senior to Oak Hill's existing $5m from the previous year — funded by a margin loan from DB Alex Brown against Evolve stock still under lock-up.
He raised roughly another $1.5m from a dozen angels, employees and friends, offering personal guarantees to move quickly. The burn rate was close to $1m a month. Those are the guarantees that were called after September 11th, and that he honored.
His assessment of the Oak Hill offer, recorded as his opinion: opportunistic and predatory.
Conley told the assembled hundred-plus staff he would pitch every venture firm in the valley. Three months later, with Hare's bridge running out, he returned with no term sheets and a plan to lay off almost everyone and restart.
Hare returned with a signed, committed $10m preferred round at a $50m valuation on a weighted-average proportional ratchet — standard Series B terms. He was no longer chief executive and could not sign it. By his account Dave Brown went back to the investor and insisted on a full ratchet instead: the downside of a convertible note with the upside capped at $50m.
Hare protested in writing, warning of legal exposure while an executive with a conflicting personal incentive remained in the chair. His legal analysis is his own and no court has ruled on any of it.
Consilient subsequently went bankrupt, and the capital structure and the conduct of the 2001 financing were examined in the litigation that followed — by counsel on more than one side.
That matters for this record. The conflict Hare describes is not primarily an allegation about anyone's motives; it is a property of the capital structure. A holder of an uncapped convertible note with no floor, plus anti-dilution protection, participation rights, and the contractual ability to install the chief executive, is better off at a lower valuation — regardless of who holds it or what they intend. That is checkable from documents rather than from anyone's memory.
There is no single root. This is one view of the graph, from this node — what you see depends on where you enter and what you are looking for.
Vice Chairman of Consilient, and the introduction into Cisco
Open →held the rightA clause he signed, and the reason there was nothing he could do
Open →its junior partner, who became CEOTwenty-nine, and in over his head in the worst spring in a generation
Open →the financing that would have made the round unnecessaryA $10m lead investment in crowdsourced solutions — in 2001
Open →the structural argument about its modelBass's model fixes the Spence problem. Then it creates a second one.
Open →Everything above is a distillation. The primary source is published in full, so that any claim on this page can be walked back to what was actually said — and where the two differ, the source governs.
The account this page was distilled from, preserved as dictated.
Read the source →Primary source · S-024The account this page was distilled from, preserved as dictated.
Read the source →Primary source · S-073The account this page was distilled from, preserved as dictated.
Read the source →This entry is deliberately incomplete. The gaps below are the things only certain people can settle — and settling one is a contribution like any other: recorded, timestamped and attributed to whoever made it.
Correct anything wrong, add what only you know, or claim this entry as your own. Write to evidence@qpncatalyst.io and Jonathan directly (both are on the button) — a timestamped confirmation comes back with your submission attached, as your own independent record. No account, no permission, no institutional standing required.
Public contributions earn Publicity Premium; bringing others who were there earns Cascade Premium. Everything is valued retrospectively as outcomes verify, so nothing has to be priced up front.
Correct this entry → Add a story, photo or link → Browse the graph →