Avici's Coming Out Party
What's it like to be a hotshot Web entrepreneur? Who are these people striking it rich on the Internet? 48 Hours decided to find out. Last summer Correspondent Erin Moriarty tracked the co-founder of a Massachusetts company taking the very risky gamble of going public.
At first glance, Larry Dennison seems like the typical computer engineer at work. "I'm typically here between 11 and 12 hours a day," he said. "And I do an awful lot of work from home."
His wife, Judy Dennison resembles thousands of other mothers with four very lively children, with sore throats to worry about and a menagerie of pets.
What makes Larry and Judy Dennison different from most people is that they could strike it very rich. That's because Larry Dennison's Avici Systems is about to go public. That's when the public can for the first time buy stock in a new company.
An initial public offering or IPO also marks when the new company's stock can start to be worth something. An IPO can turn any employee, who already owns stock in the company, into a millionaire, almost overnight.
Said Judy Dennison: "It's like our lottery ticket. You know not too many people get this opportunity to sort of take the chance and maybe succeed."
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Avici's 7-foot, high-tech box is what some people predict will transform the Internet and in the process put Larry Dennison and his Massachusetts company on the map.
When Dennison and two friends first came up with an idea for a company, there were no employees, no money and no product. Since then, in just four years, Avici has grown.
Now there are more than 300 employees, and all of them own a piece of the company.
Said Sally Graves, one of the first 50 employees hired by Avici, "The thing that I think about is, I could pay off my kids' education.
"Or, you know, I could maybe pay off my house," said Graves, a mother of two.
That hope is what has kept Graves and her co-workers at the office through dinner every night for nearly three years.
"You do hopthat you're going to be one of those millionaires," said Graves' husband Steve, who cooks dinner alone. "We looked at Avici, and we said Avici is a good company, it's got a good product. You've got to bet the bank, you know?"
So what exactly is Avici's magic box? It directs information - even complicated information, like video - across the Internet and into home computers at a super speed. "Faster than just about anybody else out there can do it," boasted Larry Dennison.
But Larry Dennison and the other employees were to find out what the rest of the world thinks of their invention when the company went public this past summer.
"From the day the company was founded they've been thinking about this day; they've been planning for it," said David Yedwab, an analyst who studies high-tech companies like Avici. "Finally ready to say to the world, 'Here we are. Here's our coming out party. We're it.'"
Web entrepreneur Jeff Osborne is virtually retired at age 41, all because he got in on the ground floor with an Internet start-up company. "Since I'm doing investing in small companies, though, if people ask, I say I'm a venture capitalist," he quipped.
And about how many hours a day does that require? "None to 12," he said, laughing.
"First job out of college, I worked for a small technology company in Santa Barbara. Age 29, founder cashed out, 28 million bucks," Osborne explained. "And I said, 'That's what I want to do.'"
After working for several failed start-ups, Osborne was hired as a sales manager at a company called UUNet in 1993. The company went public two years later.
How much is he worth? "Pretty well into eight figures," he says.
What has all that money meant to him? Toys, for one thing.
"Everybody wants a bigger boat. We're building a bigger boat now; (the) question is just how much bigger," Osborne said.
He and his wife live in a house on 28 acres in Virginia. There's also a house in Maine and one in Florida, plus houses and cars for parents and siblings, and college educations for nieces and nephews.
"This is really fun," Osborne enthused. "Wealth in America is an excellent option. I highly recommend this to anyone."
So Avici's public offering could turn the Dennisons into millionaires. "Maybe, yeah," said Judy Dennison. "My kids will definitely go to college. That would be nice. Hope it happens."
But it might not happen. Since the stock market plunged a few months ago, a lot of IPOs have flopped.
"This is going to be the day that proves it," said analyst Yedwab of the IPO. "Was it worth everything they invested in it?"
Click here to find out: Was Avici's IPO a success or a bust?