Reborn in America, I am a legendary short seller on Wall Street.

Chapter 247 Progress Partners Fund (5.3k)

While the crowd was still reeling from the shock of the Eastman Kodak camera, Mr. Porter quietly took Eastman's place in the center of the stage.

“Mr. Eastman has demonstrated the tools for capturing the future,” Mr. Porter’s voice was not loud, but it cut into the most sensitive nerve of every wealthy person with the precision of a scalpel, “and I will provide you with the channels to invest in this future.”

The wealthy individuals were exchanging their opinions on this new technological product when they heard Mr. Porter mention "investment channels," and their attention was immediately drawn back to the center of the stage.

Mr. Porter surveyed the New York tycoons around him, revealing a perfect smile honed through years of professional training. To ensure that even those furthest away could hear him, Mr. Porter deliberately used his chest voice as an auxiliary sound.

While waiting for the crowd to calm down, Porter beckoned to George Eastman, borrowed his folding Kodak camera, and then placed a stack of fund contracts in his right hand side by side on the oak lectern.

"Kodak cameras are just the beginning. Behind them lies the continuous consumption of film, a vast network of developing services, and a brand new industry of recording images that is about to sweep the globe. Our 'Progress Partners Fund' will be exclusively anchored to Eastman Kodak and its upstream and downstream supply chains."

Mr. Potter calmly addressed the assembled tycoons, who then fell silent once more, all staring at him.

Taking advantage of this moment, Mr. Potter's assistant also brought up a huge blackboard.

Porter turned to the blackboard and wrote three lines of numbers in chalk:

Kodak's annual camera production is 3000 units; it is estimated to reach 20 units in 5 years.

Each machine consumes 12 rolls of film per year, requiring a total of 240 million rolls of film.
Profit margin per volume 60% → Annual compound return of fund ≥ 35%.

When I wrote down the 35% fund return rate, I don't know if it was because of excitement or because I used too much force, but the chalk broke.

Mr. Porter picked up the fragment, drew two white lines under "35%", and then said to everyone, "This is not a prediction, it's arithmetic. If the error exceeds 10%, I will personally make up the difference."

At this moment, in a style and atmosphere different from the Eastman roadshow, Mr. Porter began to use rigorous and detailed language and logic to explain how this new Wall Street business model of "mutual funds" actually invests.

This is actually the main event today. The reason these wealthy individuals were invited is because of their interest in investment funds. After all, in this "gilded age," making money isn't a particularly remarkable thing, but finding financial innovations like Kodak cameras, or a stable investment channel, is certainly a major concern for these billionaires.

Having worked in the industry for many years, Mr. Porter naturally has a deep understanding of the thoughts of these "clients." When explaining how the fund operates and how it invests, he can naturally focus on the two parts that they care about most: "safety" and "value appreciation."

After confirming that everyone could accept his basic introduction, Mr. Potter solemnly began to speak.
"Gentlemen, as we all know, we live in an era of rapid technological advancement and massive mergers and acquisitions. At this time, many companies like Eastman Kodak may not be able to obtain timely bond financing from Wall Street, but they have bright futures. Our 'Progress Partners Fund' aims to invest in these promising companies and grow alongside them..."

Mr. Porter looked around at everyone, smiled, and continued, "Think back to fifty years ago, when the railroads were just being laid out as a brand-new mode of transportation, they also needed huge amounts of financing. At that time, the only way was to use a group of prominent figures to get loans from banks, and as everyone knows, the banks only charged some loan interest; while the prominent figures who invested in the railroads made a fortune."
If I were to give another example, I would like to mention the Edison Electric Light Company. We all know that Edison himself was a great inventor, and his electric light—just like the one in the esteemed Mr. Astor's ballroom—greatly satisfied people's lighting needs. After such a company went public, it would naturally attract capital, and its stock price would soar…”

Porter cited two examples, one of which is already well-known, and the other is about to go public, with strong bullish sentiment on Wall Street. The wealthy people present here naturally understand this principle.

“By investing in our Progress Partners Fund, we will invest in these companies, which will add the power of progress to you and your wealth!” Mr. Porter concluded.

It was the same Vanderbilt family representative again, who straightened his back and questioned in a sarcastic tone,
"Since it's an investment, I can invest myself. Why should I go through your fund?"

The Vanderbilt family voiced the concerns of many. Upon hearing that funds charge management and custody fees, everyone naturally had the same question: We also have our own eyes and can find good investment projects, so why should we need you to overstep your bounds?

Mr. Potter had anticipated that someone would raise this question, so he smiled, raised his hat to the questioner in thanks, and then took out a piece of chain from under the podium.

The chain was tightly interlocked, each link fitting together very securely. Potter removed one link and replaced it with a distinctive, detachable brass buckle found on Kodak camera straps, continuing his explanation...

“Traditional capital is like an iron chain—strong but prone to rust. Our fund, on the other hand, is like snap-on capital.”

Potter then demonstrated how quickly he locked the buckle into the chain, then easily removed it, before saying...
"According to Wall Street's past investment practices, if you invest in a company like Kodak, you're locking in camera patents; if you invest in railroads, you're unlocking a transportation network. The biggest problem here isn't your vision, but the time cost... What if you want to withdraw your investment halfway through? Before the company goes public, you might sell it for your original investment plus a few percentage points of interest, but you know perfectly well that the company's profits and stock price could double after it goes public!"

Mr. Porter's words sparked a noisy discussion among the crowd. Clearly, the wealthy individual was indeed encountering a similar problem when making investments: the liquidity of equity investments is extremely poor, and if the company is not listed on the NYSE, the investment often has to be sold at a discount.

However, for important figures, the funds they sometimes need in a short period of time are extremely large. This need for "monetization" outweighs any so-called "rate of return" and "long-term" temptations for those investors.

Mr. Porter and the crowd quieted down a bit, and he continued with a smile, "...If you invest in our Progressive Partners Fund, and if you need to withdraw your investment temporarily, you can simply press the button and leave at any time. The flow of capital is as free as breathing."

As he spoke, Mr. Porter, holding a piece of chalk, gave everyone a precise explanation of how to buy and redeem funds. He explained the redemption process, especially fund units, in great detail. He later added that...

"We can also put the fund shares on the open market for people to trade. You can trade the fund's shares like you would trade bonds. This way, you can withdraw cash whenever you need it, and buy it back whenever you like the fund."

At this moment, even the most discerning members of the Vanderbilt family fell silent, silently comparing the benefits of their own investments with those of investing through funds.

Mr. Porter pressed on, saying, “As for the safety of the fund, you can rest assured, because our fund will be managed by Morgan Trust Bank. That is to say, the fund’s account is with Morgan Bank, and our account is also with Morgan Bank. Every transaction will be supervised by Morgan Bank to ensure that we will not abscond with the money… Rest assured, this money can only be used for investment and cannot be withdrawn for our own extravagance. Every transaction record on the fund can withstand scrutiny.”

The crowd began to murmur amongst themselves again. In fact, many in the audience came to this fund roadshow with the intention of causing trouble. New York's wealthy are rife with sleazy and discordant relationships, and knowing the Astor family's connection to this fund, the Vanderbilt family also harbored some thoughts of discrediting the product.

But after Mr. Porter's introduction, the inherent rationality of making money prevailed among the wealthy, and everyone began to seriously examine the benefits of this so-called "mutual fund".

Indeed, as Mr. Porter said, it allows for investment while avoiding the biggest pain point of long-term investment—liquidity.

Both were roadshows, but if Eastman Kodak emphasized "innovation" and was driven by emotion, then Saul Porter was purely rational, emphasizing "profitability, liquidity, and security." The biggest similarity between the two roadshows was that they both addressed people's "pain points."

After everyone's discussion subsided, Mr. Porter revealed the ultimate goal of this fundraising: the fund management would invest an additional $30, and the rest would be raised through fundraising!
“However,” Porter’s tone shifted, becoming cold, “this fundraising is only open to the guests present, and there are limited spots available. What we need is not blind funding, but visionary partners.”

During the free discussion time following the presentations and talks, the ballroom transformed into a miniature Wall Street.

Small cliques quickly formed, and heated debates ensued.

"That Porter kid, he talks bigger than Morgan," a man wearing a silk scarf said, swirling his wine glass. "Who knows if it's just another scam?"

“But that camera is real,” the woman next to him retorted, her eyes burning with passion. “My brother works in chemistry in Germany, and he’s been paying attention to Kodak for a while now. He says this film technology is revolutionary.”

In a corner, a senior manager from Rockefeller Standard Oil was relentlessly pursuing Eastman, trying to extract more technical details and patent information. Eastman, however, skillfully maneuvered, revealing too much while keeping Eastman intrigued.

Porter was completely surrounded, and questions came at him like bullets.

"Mr. Porter, how can you guarantee that Kodak won't be copied and crushed by larger companies?"

"What is the fund's exit mechanism? Are we supposed to wait ten years?" "If an economic panic occurs, such as the rumored outflow of gold, how will your fund hedge against risks?"

Porter handled the situation with ease, each of his answers acknowledging the risks while demonstrating greater confidence and more sophisticated avoidance strategies. He even casually mentioned that he had reached preliminary investment agreements with several prominent European families, cleverly leveraging the competitive spirit and sense of crisis among these newly wealthy Americans.

King Astor IV also entered the ballroom, moving among the most important guests. This foundation roadshow, held on his own estate, felt so much like he was personally endorsing the fund, like the final weight tipping the scales.

Like George Eastman and Saul Porter, Astor also avoids discussing technology when addressing the public, focusing instead on trends, historical opportunities, and the responsibilities of "our generation"...

Twenty minutes later, the final and most important moment of the subscription finally arrived.

Mr. Porter returned to the podium, held the blank fund subscription agreement in his hand, looked around at the crowd, and said...
"Gentlemen! Subscription to the Progressive Partners Fund is now open. I am confident that with your wisdom and foresight, you will choose the right investment amount for you!"

The dance hall fell into a brief silence as everyone waited for someone else to go up first.

Larry had already walked up to King Astor IV, arms crossed, and was smiling at him.

King Astor IV smiled wryly, knowing the other party wanted him to start. He shook his head helplessly, then walked to the podium first, took a fund subscription agreement, and then expressed his opinion to Mr. Potter, and indeed to everyone else.
"The Astor family invested $20... for you, the Progressive Partner Fund!"

Unexpectedly, no sooner had King Astor IV finished speaking than his mother stepped forward and corrected him, "No! The Astor family has invested $30, and I personally am willing to invest an additional $10!"

Astor IV looked at his mother, smiled, nodded to Mr. Potter, and said, "Alright! $30 it is!" As he spoke, he picked up the first subscription contract, signed the number and his name.

A commotion immediately broke out in the crowd, with murmurs rising and falling.

The Astor family's investment decision was like throwing an ice cube into boiling water, immediately astonishing the wealthy attendees.

It's important to understand that this so-called "fund" is a relatively new concept, and it invests in emerging industries with significant risks. Even the wealthy have to consider whether their money will go down the drain.

At that time, even a top-tier wealthy family would not spend more than $50 a year on investments or bond purchases. The Astor family's move almost reached the upper limit of what all wealthy people could invest.

The group began to look at each other, worried that not investing would damage their family's prestige, but also feeling that if the investment was too small, they would be laughed at.

Some people were only planning to invest a few thousand dollars to watch the show, but now that they see the Astor family investing $30, they feel that they can choose not to invest today, but if they do invest, they will be ridiculed if it is less than $3.

The group was once again plunged into hesitation and confusion.

It was the Vanderbilt family representative, the gentleman who had previously been the one to disagree, who stepped forward and, after carefully reviewing the thick stack of partnership agreements drafted by top lawyers, was the first to sign his name at the end.

“On behalf of the Vanderbilt family, I also invested $30!”

After speaking, he picked up the subscription agreement, looked at it, and then handed it to Saul Porter as if he were tipping a hotel waiter.

This move was like toppling the first domino.

Following that, several other wealthy individuals who had been observing also stepped forward.

The scratching sound of the pen gliding across fine parchment was more beautiful than any music at that moment. Mr. Potter watched all this calmly, only his hands, clenched tightly behind his back with slightly white knuckles, betrayed the turmoil within him.

In less than five minutes, the Progressive Partners Fund easily surpassed its base target of $80.

This sends a signal to the wealthy: the project itself is solid and has gained the approval of the core circle.

In another 15 minutes, all the wealthy individuals who could go on stage had done so, and the total amount raised by the "Progressive Partners Fund" had exceeded $130 million, reaching $134.8 million, which is a common amount for public offerings on Wall Street.

But for a brand new concept, a newly established fund, and funds raised privately, this is already an enormous amount!

As the last wealthy patron left the stage, Mr. Porter's face trembled slightly with excitement as he held the stack of purchase agreements signed by New York City's tycoons.

If we take into account Larry and his own follow-on investments, this round of funding has already reached $166 million, enough to easily buy several startups similar to Eastman Kodak.

Mr. Potter glanced at Larry in the audience, his expression a mixture of joy and restraint, as if afraid his expression would betray his inner delight.

Larry, hidden in the crowd, laughed without restraint.

Just when everyone thought the fundraising was over, a key partner at JPMorgan suddenly stood up and said loudly to Saul Porter, and also to the other wealthy people present, "Mr. Morgan cannot attend in person. Logically, as the custodian of the fund, Morgan Bank should not have any special interest in the fund, but... Mr. Morgan says he has particular trust in the fund's actual holders..."

As he spoke, his gaze slowly swept over Larry Livingston, who was hiding in the crowd, and he continued, "...So, Mr. Morgan is personally willing to invest $50! For our great era! For the future of the American consumer revolution."

After the senior partner finished speaking, the dance floor erupted in frenzy...

Mr. Morgan is personally willing to invest $50?!
While this sum may not be a huge amount for the super-rich, it is unprecedented for Wall Street's asset allocation, because even for banks investing in super-stable bonds like U.S. Treasury bonds, a single investment is only $50.

Investing $50 in a high-risk mutual fund demonstrates just how much trust JPMorgan has in this fund!

Could it be that Saul Porter, this popular sales manager, really possessed such great ability and earned the approval of Mr. Morgan?

Everyone's attention was focused on Mr. Potter on the podium, but only the senior partner sent by Mr. Morgan casually glanced at Larry.

Larry nodded knowingly. He had seen this man before in Mr. Morgan's private library. He was probably the head of the senior partners at Morgan Bank, named George Perkins.

The atmosphere in the ballroom became frenzied. After Mr. Morgan's senior partner signed the contract with "subscription of $50" and his own name, these New York City tycoons could already imagine how tomorrow's newspapers would portray this unprecedented private equity fund.

It was an explosive, Wall Street-shaking fundraising!
The noise in the ballroom was comparable to all the previous dances held here...

Just then, an old man's voice suddenly rang out, "Sorry... I'm late!"

　I'll continue updating tonight, but it'll be past midnight, so everyone should go to sleep.

　　
　
(End of this chapter)