David Rosenthal: prediction

Transcript context

…I think it was hard to find them because they didn’t put a sign outside their office, they weren’t answering emails, they weren’t answering phone calls. I think Jim finds their address and drives there. He’s the one you’re referring to that’s banging on the door and saying, “I really, really would like to talk to you.” Yeah, and he talks about he, Jan, and Brian used to work out of the Red Rock Café in downtown Mountain View—which I’ve been to many times, famous spot in Silicon Valley lore. Jim eventually gets to sit down with them and meets them at Red Rock, and just starts answering all of their questions and pitching them on why they should work together. So, they do an $8 million round at a slightly lower than an $80 million post money valuation. I believe Sequoia got somewhere between 10%–15% of the company for this investment. Again, crazy for this moment in time. But Jan talks about why they picked Sequoia and Jim. He says there are three reasons: (1) All of Sequoia’s past successes that we talked about in Sequoia part I, including Yahoo! and the brands associated with that, (2) personal chemistry with Jim, and then (3) this is really important (and it’s going to come back here in a second as we get into Facebook), he said it was really important that they didn’t meddle. He’s like, “The business is working. We were printing cash, we were clearly the market leader, we were growing super fast all around the world.” And he said, “Jim and Sequoia said to me, ‘Look, we’re not going to mess with you. Things are working here. If they’re not working, we talk about it. We will help you and do whatever you need, but you guys are doing a great job. ’” I think that’s so powerful in terms of what that sets up for a relationship between a founder and venture capitalist, but also clearly that was so important to Jan and Brian all throughout everything and foreshadows what’s about to come with Facebook here. Yeah, when others do start to exert control.…

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