An investment banking presentation without numbers is like a Chippendales show without fleshy pecs.

Kana Communications


learned the hard way that when you come to meet the banking community, the bankers want you to expose the financials. (Especially when your stock is trading 75% below where it was two months ago.) You know, they want to see the quarterly revenue bar charts -- preferably jutting ever higher as the quarters go on. Breakdown of growth potential in your different product categories. Discussion of the markets you address.

Yes, it's painful. But you've gotta take it all off.

Instead, CEO Michael McCloskey gave the crowd at the Chase H&Q Tech Conference a strong rundown of Kana's online customer service applications and products. He was thorough: You can email your customers, chat with them and use voice over IP to talk to them via the Internet. You can upsell, manage incoming e-mails and update your sales force on leads.

Kana has sold to seven of the Internet's 10 most highly trafficked sites. It is looking at a $10 billion market waving $1 bills at its belt line. See, isn't that nice? That wasn't so hard! Phew, done. Nothing exposed. And now, for the Q&A segment.

Not so fast.

Before you could say the words "breakout session," the audience pounced on McCloskey. Onlookers from different sides of the dimly lit room barked out, "What about revenues?" And, "How about some financials!"

McCloskey was peppered with bellowed questions. "What's the earnings model?" shot one audience member.

"We're looking at Q4 2001 to be profitable," the CEO answered.

"Where did you get the $10 billion market figure," groused another.

"It came from four companies --




..." McCloskey ran down the list.

So much for getting away with what is usually brushed off with bemusement when it's on a PowerPoint slide. Kana was getting no slack at this point.

"What's the



relationship?" lobbed another audience member, wondering about Kana's dealings with the backer of


, an e-business applications company Kana acquired. "We issued a press release. They are very favorable and approved the deal."

Rankled investors were getting a little picky at this point.

McCloskey ended up going through Kana's international presence (75 employees); his average sell cycle (two to three months for applications, and three to six months for the platform products); and how Kana deals with revenue recognition (welcome to the legacy of


(MSTR) - Get Report


He broke down Kana's customer base -- 60% "global 2000" businesses last quarter vs. 65% Internet companies the quarter before. "We aren't going to see the same kind of growth," McCloskey explained about reeling in the bigger fish. "But they're absolutely bigger deals."

Now we were seeing some skin.

How would Kana retain employees with its depressed stock price? "People come to work for lots of reasons," countered the CEO. "We're such a fast-paced company, there are a lot of opportunities. Instead of looking at stock options, our employees look at it in a holistic sense."

And finally McCloskey got the dreaded "cost of capital" question. Does Kana have enough money? "A great company can raise capital. We don't want to, though. We have enough capital to last us more than next year. Right now it's not a big concern."

Finally the time was up, the sniping tones and shaking heads were hustled off to the bankers' breakout sessions. Next time, Kana might as well surrender to the money men, rather than feigning modesty. We all know what they pay big bucks to see.