Chapter 13: Pre-planning for the Internet
Zeta-Jones interacts with her new friends.
noon.
Santa Clara, California.
Santa Clara is one of the more important cities in the now famous Silicon Valley.
Like other places in Silicon Valley, there are many startups here.
"Jerry, do you think the new investors will be dictating to us?"
David Filo looked a little nervous, and the worries in his heart prevented him from relaxing.
He asked Jerry Yang, who was standing next to him in a neat suit with a serious expression.
"David, I know what you're worried about, but I think as long as he's a little more sensible, we shouldn't have too many personnel changes."
Jerry Yang saw David Filo's worry, and he was nervous too.
Their company was founded last year and received $5 million in angel investment from Sequoia Capital.
So far, four million of the five million dollars has been spent.
As for the output...
Not to mention the veterans from the early days of the Internet.
Even those Internet companies in twenty or thirty years.
Most of them rely on burning money like crazy to maintain their presence in the early stages.
Only a few Internet companies can burn through money to produce output or even make a profit.
But the situation now is different from what it will be in the future.
In the future, so many Internet companies will be able to spend money with a clear conscience.
That’s because in the early days, many Internet companies achieved success through hard work.
Burned returns for investors.
With these brilliant predecessors, the latecomers can spend money crazily with peace of mind.
But now it is 1995, and the world's first Internet stock will not be listed for another month.
Everyone is still skeptical about whether it can be successfully launched on the market.
Every day there are financial experts, newspapers and media coming out to raise questions.
These startups in Silicon Valley.
Even if they want to tell a story, even if they have the ability to tell a story in a fantastic way.
There is no template yet, and nothing to brag about.
Only the two founders of Yahoo would feel nervous when they heard that Sequoia Capital was bringing in new investors.
“Here I come.”
David Ferro saw several cars driving towards them and warned everyone.
The car slowly stopped and a group of people got out first.
These people, Jerry Young and David Filo, are no strangers.
These people are in charge of the negotiations in the past few days. The leader, Wendy Aris, is a very tough negotiating opponent.
Next, a young man in a T-shirt and jeans got out of the car, looked up and looked around at the surrounding environment and the location of the company.
An old five-story building with peeling walls gives it a dilapidated feeling.
"It should be this young man. He is so young. He can be so willful when he has money!"
David Filo had all kinds of thoughts in his mind, but his feet did not stop at all. He hurried forward to shake hands with Milo and say hello.
Jerry Young followed closely behind David Ferro, and they were also surprised by Milo's youth.
After Wendy's introduction, the two sides shook hands and had a brief exchange.
Under the leadership of David Filo, many people entered Yahoo one after another.
Yahoo's office space is quite spacious, but there are not many staff members.
Milo learned that Yahoo now has more than fifty employees.
With more than fifty people sharing a five-story building, the space available to each person is naturally very spacious, which is indeed a bit luxurious.
At this time, all the employees of Yahoo, like the two founders, were a little nervous.
These earliest veterans of the Internet industry have not yet developed the same level of comfort that their successors have in spending money.
An investment of five million dollars was spent most of it in one year.
But the company has not made a single cent of profit so far.
It is also obvious to the naked eye that Yahoo will not see the possibility of making a profit for a long time in the future.
There are many companies like them in Silicon Valley now.
Many businesses ran out of food and went bankrupt after their money ran out.
Yahoo must bring in new funding.
The other party is an angel investor of Yahoo, who entered the market through the introduction of Sequoia Capital.
Whether it is the two founders, David Filo and Jerry Young, or other employees of the company.
Everyone is eager for investors' dollars, otherwise it will be difficult for the company to survive this year.
The atmosphere in the conference room was a bit depressing. Milo didn't say anything. He was somewhat bored as he flipped through the information, plans and various proposals that Yahoo had prepared for investors.
How to put it? From the perspective of people at that time, it seemed a bit far-fetched.
But as a veteran, Milo knew that Yahoo would decline and go bankrupt in the future.
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But in the next five years, it is the undisputed representative of the global Internet.
At its peak, the market value reached more than 120 billion US dollars.
After confirming that the Yahoo in front of you is the real Yahoo.
He didn't wait for the two Internet veterans to give a long speech bragging about himself to attract investment.
Wait for Wendy to lead the audit team to complete the final accounting.
As long as there are no problems, Milo will sign the contract and pay the money.
He will invest the same $5 million as Sequoia Capital.
By then, he and Sequoia Capital will jointly hold 70% of Yahoo's shares.
The two founders hold the remaining 30%.
However, this company is suffering from heavy losses and currently has no output at all.
The small company with only fifty people in the whole company will have a nominal market value of 14 million US dollars.
A few minutes later, Wendy pushed the door open and walked in.
He nodded at Milo to indicate that everything was alright.
"Then sign it." Milo said to the two founders with a smile.
Jerry Young and David Ferro breathed a sigh of relief.
At the same time, I was a little confused.
So simple? They didn’t even say a word, just read the documents and signed directly? When the two of them were soliciting investment from Sequoia Capital last year.
It took nearly three months.
Sequoia conducted various audits on them, and the two men went to Sand Hill Road to lobby almost every day.
Finally, we got investment from Sequoia Capital.
They felt that facing Milo this time would not be as difficult as last time.
After all, Sequoia Capital has already invested in it.
But they didn't expect that things would be so easy and simple.
The conversation lasted less than ten sentences, and the young Yahoo got investment again.
"…This, this is too simple?"
At the company gate, I watched the other party’s convoy leave.
Jerry Yang said to David with some doubt about his life.
It took less than an hour in total, including the welcoming and farewell greetings.
Although we had been in contact for several days before, it was so easy to sign the contract.
The two founders of Yahoo are still a little confused.
Compared to Jerry Young, David Filo is white and has more information and channels to learn about the content.
After thinking for a while, he said to Jerry Yang, "Five million dollars is a lot for us, but maybe not for him. I heard that our new investor is related to the Boston consortium."
"Boston Consortium!" Jerry Yang was surprised.
David Filo nodded affirmatively.
This is what he heard from Sequoia Capital.
(End of this chapter)