"What?"
Stephen Sollenberg's eyes bulged. "Boss, did you just say you're giving us shares and planning to take Waterworld Animation public? Is that true?"
At this moment, whether it was Stephen Sollenberg or David Messer and the rest of the Waterworld Animation executives, every breath came heavier, adrenaline spiking.
Stock grants?
Going public?
These were matters that hit them right in the wallet—no one could stay calm.
Kyle grinned. "A year ago I promised that if Waterworld Animation performed well, I'd grant shares to each of you—maybe even give some away for free. That offer still stands."
Everyone nodded emphatically.
"And remember, the day we founded Waterworld Animation I told you: our target is Pixar. An IPO is only the first small step," Kyle urged.
"..."
No one spoke, but their clenched fists betrayed their excitement.
Look, guys!
In 1995 Pixar's IPO didn't just yank Jobs out of the gutter—it crowned six new ten-Millionaires, thirteen Millionaires, and handed hundreds of ordinary employees shares worth hundreds of thousands of dollars.
To anyone in animation, Pixar's legend is the dream everyone chases.
"Our company can go public too?"
"I could actually be a shareholder of Waterworld Animation?"
"I'm going to get rich?"
Stephen Sollenberg, David Messer, and the rest felt dizzy with excitement.
Kyle's words had come out of nowhere—completely blindsided them.
"And it's not just Waterworld Animation Company. Every subsidiary under Golden Dawn Entertainment Group—Page Pictures, SpongeBob House, Golden Dawn Music, Golden Dawn Publishing… in the near future, as long as you contribute, I won't be stingy with options."
"Remember—this is my, Kyle Page's, promise to you."
Can dreams put food on the table?
No.
Only solid benefits keep talent.
Without options, top-tier people simply won't stay.
David Messer used to be at Pixar; because of seniority he got less than a hundred grand in shares when Pixar listed. When Kyle waved a better offer, he jumped ship.
Why?
Money, pure and simple.
Kyle won't deny there's also passion involved—but people still have to eat and pay rent.
He's always believed: "Not everyone gets shares or options, but if you've got the skills, I won't be cheap."
Of course, the slice he's handing out this time isn't huge.
Fifteen percent.
Kyle will release 15 percent of Waterworld Animation's shares in one go.
Twelve percent is earmarked for the IPO stock grant.
Note: it's a grant.
Meaning—they have to buy it.
They won't lose out, though.
"We're totally fine with that,"
Stephen Sollenberg laughed. "Look at Pixar: employees paid for their allocated shares, the company listed, and every one of them multiplied their money several times over."
In 1995 Pixar let employees buy pre-IPO shares at seven dollars; on the first trading day the price closed at thirty-one on NASDAQ—more than quadrupled.
Pixar's John Lasseter, Andrew Stanton, the whole gang—everyone cashed in big time!
The remaining three percent of that fifteen is off-limits for the grant.
Kyle will use those three percent for gifts and rewards to people who've done something extraordinary for Waterworld Animation—think CEO Victor, Television Group's Donna, and other top execs…
The next day, while the whole studio was still drunk on talk of shares and going public, Kyle sat with Paul Goodman, Anna, and the rest of the assistants hashing out the nitty-gritty.
"Boss, two things are critical for a U.S. listing,"
"First, three straight years of audited profits and a minimum asset base."
"For us that's a non-issue."
Paul Goodman rattled it off confidently.
Kyle nodded. "Exactly—profitability has never been a problem for Waterworld Animation."
With spongebob squarepants and peppa pig as twin cash cows plus the recent box-office smash Finding Nemo,
the past three years' books look spectacular.
"Second, we need at least three hundred shareholders."
"Since you're putting twelve percent up for the IPO grant and three percent into executive options, we can hit that three-hundred mark with smart allocation."
"As for the IPO price per share and the opening valuation, we'll need the pros—we can't guess."
Paul Goodman said it solemnly.
Anna, chief advisor to the private finance team, added, "Citigroup, Goldman Sachs, Morgan—any of the big houses will bite the moment you call."
"Absolutely."
Kyle smirked. "Those guys have noses like bloodhounds. The rumor's barely out and my phone's already ringing off the hook."
Meanwhile some of the IPO shares will be released for public float.
The group—Kyle, Paul Goodman, Anna—kept going, nailing down lock-up periods, transfer restrictions…
Options and employee-purchased grants don't vest the day you buy them; there's a cliff and a schedule.
Buy your slice today, flip it tomorrow, then walk? No way Kyle's eating that loss.
Nobody's a sucker.
So, like every company on Earth, we'll slap on the usual lock-ups.
Shares and options go only to those who earn them.
Take Paul Goodman, senior counsel. He's been around forever, but he's replaceable—so no options for him.
CEO Victor's a different story.
He's been Kyle's right-hand man for years; if he doesn't get options, no one will dare claim they deserve them.
"Even a tightwad like me knows you've to pay your generals!" Kyle boasted, though it pinched.
Once a firm grows big enough, equity for key staff is inevitable.
Still, a miser stays a miser.
Kyle sulked for days, consoled himself with lavish meals and prettier company, then finally got over it.
Waterworld Animation's IPO will take time.
Kyle isn't worried—unlike Pixar's cash-starved pre-IPO days,
Waterworld Animation is rolling in money.