Information Technology Reference
In-Depth Information
little confidence that a small company operating in Mont-
real could successfully stake out a place in the computer
market. Just weeks after refusing
AES
access to lease
financing, the Royal Bank walked in with a receiver and
took over the management from Dorsey, threatening to
force bankruptcy upon him.
Out of financial desperation, Dorsey decided to look for venture
capital and found a potential investor by the name of Innocean
Investments, owned by the Canada Development Corporation
and a group of banks. According to Thomas, Innocean behaved
more like a “vulture capitalist, waiting for its wounded prey to
die before swooping down for an easy meal.” In an interview
for Thomas' book, Dorsey said that he was convinced that “In-
nocean just waited for us to go broke so that they could buy at
a bargain basement price instead of coming in earlier when the
company was still viable.” And indeed, when things got really
bad at
AES
, Innocean became suddenly interested in investing
enough funds in
AES
to cover the company's debt to the Royal
Bank. Dorsey was offered no share in the ownership or manage-
ment of
AES
. “Innocean called me in on a Friday and they had
a whole thing for me to sign right away,” explained Dorsey to
Thomas. “It gave me zero equity. Even though the banks were
pressuring me to make a deal at any cost, and probably could
have forced me to do it, I just said. 'No deal.'”
After Innocean offered Dorsey 25 per cent equity in the com-
pany, he signed. Like Kutt, he became the nominal president,
shadowed by a Bruce Wallace-like appointed manager. Eventu-
ally, things got so bad at
AES
that Dorsey was paid $135,000 to
quit the company. “Innocean wanted Dorsey to sign a promise
that he would not start a competing business,” wrote Thomas,
but Dorsey refused. “I said that if I wasn't good enough to run
AES
they shouldn't be afraid of me when they had Xerox,
IBM
,
and everybody else to contend with.” Soon after, in early 1975,
