Information Technology Reference
In-Depth Information
Venture capital investments had usually been high risk and
therefore it was not unusual to expect that the outside share-
holders group would want some control over
KSI
's decision-
making process to protect its investment. To that end, there was
some hard work ahead of the group, since all corporate powers
resided with Kutt. He was the president and the only director
of the company. That gave him sole power over the company's
business operations, including the defining and assigning re-
sponsibilities to the officers of the company. He also owned a
large majority of
KSI
's common shares, which gave him full
control over the company's constitution and general policies,
such as the election of the company's officers and the setting up
of authorized capital for the corporation by creating common
shares. It was only inevitable that the outside shareholders
group would apply pressure on Kutt on a number of fronts to
erode his powers as well as his share-holding domination.
Increasing the number of
KSI
directors was not a difficult
issue. Kutt understood quite well that, in the long run, a cor-
poration such as
MCM
could not function properly with a one-
person board of directors. However, Kutt agreed not only to
an increase in the number of directors but also to the outside
shareholders' request that they should have the right to nomin-
ate one director of the company. During the 8 December 1972
shareholders' meeting, several by-laws were passed, the most
important of which increased the number of directors from one
to five, and increased the authorized capital of the corporation
by creating an additional 1,750,000 common shares without per
value to total 2,000,000.
In February 1973,
KSI
, renamed as Micro Computer Ma-
chines Inc., appointed two new directors, W.S. Robertson
and M.L. Davies, and in May the board welcomed its fourth
member, W.H. Thompson.
To pay its bills,
MCM
needed more money and was looking
for ways of raising $300,000 of additional capital at a minimum
