Redwood Capital Corporation, owner/user of the domain RedCap.com, began operations in 1983. With a background in business development and tax oriented leases in a large, public leasing company, founder/owner Krist Jake felt he could apply his experience profitably in a small shop of his own. As things unfolded, an opportunity was uncovered that encouraged a focus on the users of Tandem Computers, Inc. equipment. That was in 1984, when Redwood pioneered the Tandem equipment aftermarket with a $100,000+ figure Non-Stop II system sale to Viking Freight in Santa Clara, CA (just a few miles from Tandem’s headquarters). Even though structured to minimize risk, this was still a rather bold, risky piece of business. Fortunately, it came out well for the participants, the seller, a Philadelphia-based Tandem user who had purchased more that it needed, Viking, and Redwood.
A light went on, and the founder began to concentrate on Tandem users (in current lingo, a “pivot”).
Tandem’s strong growth pattern over the next 10 or so years, along with hard work by Redwood’s loyal staff, meant more customers, transactions, and financial success for Redwood. While equipment buy-sell activity was the bread & butter, large lease and rental transactions put meat on the bone.
In the early 1990’s, by which time a handful of competitors had followed Redwood’s lead in the Tandem world, we noticed business was much more competitive than before. Tandem had opened its own pre-owned sales department, current Tandem equipment was hard to find in the user community, and sometimes independent competitors supplied users used equipment that we had been unaware of, a disturbing occurrence rarely experienced in earlier years.*
There were many choices for an extension of our platform, and Redwood’s founder and staff strategized to find consensus and enthusiasm for a second line of business. After reviewing the opportunities along with personal interests and preferences, the founder decided to exit the Tandem market and take a hard-earned sabbatical. He offered the Tandem activity to the staff to carry on, but each key member was ready for something new. The company downsized and, over the next year, the founder converted the firm’s equipment inventory to cash.
Over the next several years and through the first Internet bubble, Redwood Capital participated in the venture debt industry and Mr. Jake angel invested. In the start-up winter after the bubble, Mr. Jake took a new path as visionary, volunteer founder, and board president of the San Francisco Ocean Film Festival, which is now titled the International Ocean Film Festival. Now in its 15th year, SFOFF was the first ocean film festival – there are now several others in the same niche, a good thing for our planet’s oceans.
In parallel with the ocean film festival, Mr. Jake, through Redwood, began to acquire domains for resale or development, an activity that continues. He also began to consult to founders and their companies on a selective basis, a practice that continues.
*We later learned of contemporaneous unlawful activity involving Tandem equipment from a New York Times article.
For more on Tandem, see http://en.wikipedia.org/wiki/Tandem_Computers or the SEC’s Edgar database http://www.sec.gov/edgar/searchedgar/companysearch.html