David Rosenthal: evaluation

Transcript context

…There is no money that exists for non-governmental tech businesses. Yeah. Venture capital was like you were going on an adventure in some capital somewhere. Nobody knew what that meant. The eight of them get in touch with a man named Arthur Rock, who was an investment banker from the East Coast. He agrees to help them out. He scours the technology universe at the time, looking for somebody willing to fund these guys, and ends up connecting them with a guy named Sherman Fairchild back in Long Island, New York, who is the owner of Fairchild Camera and Instrument Corporation. Sherman also happens to be the largest shareholder in IBM, which is why he's interested in this. He agrees to loan these eight plucky pirates $1½ million in exchange for the right to buy the whole company for $3 million which he does. Venture capital firms have come a long way since then. It's a heck of a deal. In this environment, the power is back on the investor side, I would say. I still don't think anybody would take that deal. It's actually interesting. Think about that deal for a second. You loaned $1½ million and they have the right to buy it for $3 million. Let's say it happens over six months. I don't know how long it actually took. They wouldn't have taken any equity, right? It was truly a loan?…

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