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strength. He was often described as a consummate salesman, someone who quickly put others at ease.

Conway rubbed elbows at the Band of Angels, an organized group of individual investors. In 1997 he struck out on his own, pillaging his Rolodex to raise a $4 million fund to invest at $200,000 a pop. But as he met more investors with good ideas, it didn't seem like enough money. In late 1998 he started over with Angel Investors, raising $30 million in what seemed like no time.

CONWAY WAS SURFING A RISING WAVE of incredible returns for companies that went public with no profits and speculative ideas, a wave epitomized by the November 1998 IPO of TheGlobe.com, a profitless enterprise run by two photogenic recent college graduates providing free homepages and chats on the Web. TheGlobe.com shares rose from $9 to $97 the first day, spurred by day trading and chat-room hype. That day may have been the nadir of rationality, the bottom of a slide that had begun with the 1995 IPO of Netscape. Netscape's main product was also free, the most popular Web browser, but at least it was a major innovation.

With TheGlobe and its ilk, the traditional due diligence performed by angel investors and venture-capital firms became completely passé. With ridiculous companies making billionaires out of entrepreneurs and those lucky enough to get in early, it didn't matter whether there was a sound idea at the core or not. The rational thing to do was get into as many companies as possible as soon as possible, wait for the IPO, then sell and make a bundle. Just like the economics of the record industry, you needed only one monster hit to make up for a hundred no-shows.

Such lack of scrutiny made for some appalling companies. While there are now hundreds of examples, it is worth recalling a few for the sake of context. There was Pixelon, which claimed to have a new system for transmitting video over the Web. In fact, the firm's top-secret locked boxes guarded off-the-shelf goods bought from other companies. Michael Fenne, the entrepreneur behind Pixelon Inc., raised $30 million from investors, none of whom bothered to get a routine records check, which would have shown that Fenne was not what he claimed. He was actually one David Stanley, a fugitive from a Virginia embezzlement charge.

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