It was pretty miserable. Basically, the angel investors played chicken with us. They knew we couldn't get money from anyone else, since we didn't even know for sure if we owned our software. So they proposed to do a cramdown round where they would refinance the company, I believe, at a pre-money valuation of zero—meaning all the common stockholders were completely wiped out. To keep us around, since they kind of needed us to write the software, they were going to give us options. So we called their bluff. We said, "If you do that, we're leaving."

Livingston: You and your cofounders said you were leaving?

Graham: Yeah, all the technical guys. So when it came down to that, they compromised and we ended up doing a funding round at a low, but reasonable, valuation—$12 million, I think. We got bought only a couple months after that round closed. But we had to do the round because we were in debt at that point.