The 27-point agenda covered every phase of the offering. Gates said the company was contemplating a $40-million deal. Microsoft would raise $30 million by selling two million shares at an assumed price of around $15. Existing shareholders, bound by Gates’s informal rule that nobody should unload more than 10% of his holdings, would collect the other $10 million for 600,000 or so shares. The underwriters, as is customary in initial public offerings, would be granted the option to sell more shares. If they exercised an option for 300,000 additional shares of stock held by the company, almost 12% of Microsoft’s stock would end up in public hands, enough to create the liquid market the company wanted.

Gates had thought longest about the price. Guided by Goldman, he felt the market would accord a higher price-earnings multiple to Microsoft than to other personal computer software companies like Lotus and Ashton-Tate, which have narrower product lines. On the other hand, he figured the market would give Microsoft a lower multiple than companies that create software for mainframe computers because they generally have longer track records and more predictable revenues. A price of roughly $15, more than ten times estimated earnings for fiscal 1986, would put Microsoft’s multiple right between those of personal software companies and mainframers.