Zero point five, said one leader of a software company that had gone public a few years ago. ''What are you saying?'' the second, another founder-CEO of a public company, retorted ''Zero point three three!'' I was the supposedly knowledgeable onlooker in this conversation.

What was being compared was not their debt ratios, but the price one could buy revenues at in the market. These gents were inundated with sell offers from software services companies in the US and India-people who were ready to get rid of their businesses at, you guessed it, 0.5 or 0.33 times their annual turnover. The debate then went on to whether one needed to pay cash upfront, or if one could do an earn-out, almost getting the company for free.

	Tale Of A Ticking Turn
	Going By The Book
	A Brave New World

I was amused. One typically goes public to get funds to grow the company. The public supposedly invests in your leadership and your line of business. But take a look at one of our more celebrated new economy companies and its current state-and you may just be tempted to comment, like Hamlet did, that something is rotten in the state of Denmark-or, in this case, Mahim, Mumbai.

This firm was the torchbearer of the Indian net movement. Regardless of the wisdom of launching yet another English portal, it bashed on, raising money from investors across US and Asia, and going public on Nasdaq. With $50 million in the bag, one waited for the company to grow in its business. Grow it did, but curiously.

It used its stash of cash to go and buy, no, not another internet business, but a phone-card company in Chicago-one that sells cheap calls to penny-pinching American desis. In came about $12 million of revenues. Next, an ailing newspaper in the US. Out went another $10 million or so in cash, in came a similar amount in revenues. The once-anaemic dotcom now was reporting about $28 million of revenues: less than one-fourth of it from what it originally set out to do-be a portal for desis in the desh.

The action has since moved back to India, and the news is out. The company needs to buy revenues before March 31, 2002, to shore up its stock price. Suitors line up outside Mahim again, eager to sell. The target this time-it services companies. I spare one thought for the individual investor, confused at the Frankenstein's Monster-like company today. What is it? A telco-tabloid-tech-coolie-dotcom? And what does it buy next year-wada pao thelas and beauty parlours?

But I spare a sadder thought for the company itself-forced to go through these desperate measures, probably mandated by its institutional investors to do anything it can to avoid getting booted off the exchange. For those hoping to take their companies public some day, my first thought is simple: don't go public till you have a reliable business you believe the public can have faith in.

Second, even when you go public, don't give in to pressure to take your stock price to artificially high levels. If all you're worth is a stock price of Rs 15, don't say yes to the brokers who will offer to take it to Rs 150: be happy where you are. A ridiculously high price is not sustainable, and you'll take much, much longer to recuperate from that price drop.

It's not just rupees and dollars at stake here. Your reputation is in play. Your invisible investors may be pulling puppet strings to make you move the way they want you to. But once you fall in the public's eyes, nobody curses your vcs-it's your face that's black. Think about it. This company you run may not be the last one you want to start in your life. Preserve your reputation at all costs.

What does it take? An ability to say 'no' to your VCs and institutional investors. Stand in front of a mirror, practice it. They took the risk when they invested in you. Why should they get out at your expense? Your one long-term asset is your credibility. That's what the public really invests in. VCs come and go, hopefully you and your company will go on for a long, long time.

Mahesh Murthy, an angel investor, heads Passionfund. He earlier ran Channel V and, before that, helped launch Yahoo! and Amazon at a Valley-based interactive marketing firm. Reach him at Mahesh@passionfund.com.