Ben Gilbert: belief

Transcript context

…Has to be. Nice. Spring 2005, Accel comes in, leads a series A, $12.7 million at a $98 million post money valuation. That’s crazy in and of itself for the time, and though still being okay with Mark having board control. Which, one thing at the angel round maybe that’s still pretty crazy but whatever. This is angel round, but no, a real venture capital firm, real series A, 2005, (a) $100 million valuation, (b) being okay with that, that was wild. Oh, also (c) getting less than 20% of the company. Rule of thumb venture investing back in the day was you need at least 20% of the company, ideally more like 25% or 30%. Yes. Kevin Efrusy, who ran down the deal and did the diligence at Accel and Jim Breyer who was the partner and took the board seat, this is one of the all time great venture investments, so it’s worth talking about some of the deal mechanics. It was the very first post dot-com institutional venture capital deal where the founder maintained control. Certainly the norm was as soon as a VC gets involved, it is a VC-controlled board and company. The other thing that’s worth noting is this is a company getting a $98 million valuation. Now, the silly land that we live in now, we’re like this happens all the time. This didn’t happen and we were only just coming out of the dot-com era. Eyeballs and clicks had just had four years of demonization from everyone, from the press to the public to limited partners. In fact, Accel had limited partners drop out of this fund who were LPs previously, including your beloved Princeton, including Harvard, I mean big, and I think Stanford was one of the only ones that really stuck with them for this $400 million fund. They’re looking at this realizing this might be one of the greatest companies of all time, and we are going to have to do the type of deal that everyone got raked over the coals for five years ago in the mania for doing. No one is doing this type of deal in this environment, but it’s Facebook so we’re going to do it. I think the level of risk and reputation risk that they took on this cannot be underscored enough. Totally. I was trying to think of, were there any other deals like this, that you could even point to as comparable from the past? The only one I can think of was the Google series A, which was $25 million at a $100 million post money valuation, split between Michael Moritz from Sequoia and John Doerr from Kleiner Perkins.…

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