Ben Gilbert: belief

Transcript context

…It was also reported by The Washington Post after the IPO of eBay that Benchmark had also structured equity backed loans to Pierre and Jeff in the amount of $750,000 each as a way to prevent them, essentially, give them an incentive not to take the acquisition offer from Knight Ridder, because they're sitting there. They're like, oh, my God, this is life-changing money. Right. It's effectively a secondary. It's structured as this equity-backed loan. But basically, you can take away if this Washington Post article is true, a total of $1.5 million was paid to Pierre and Jeff to say, hey, make yourselves comfortable, this is a secondary effect. I have also heard from a podcast where another Benchmark partner at the time said that three of the six were used as a secondary, 50% of the investment round. Of course, we have also heard that there was no secondary and that doesn't exist at all. I think there was at least something. There's enough smoke here around the equity-backed loans that was reported not only by the Washington Post, but then was an SEC filings that, in addition to the equity investment that Benchmark made, there was also some equity-backed loans to give them the ability to whatever they made on the appreciation of the shares that they got as a part of the direct investment, they also had a nice, nice, nice return from the founders deciding to take some money off the table. All of this is highly untraditional, highly non-consensus. They're the only term sheet. They're willing to probably do at least some of this, what would come to be known as a secondary transaction, that then later everybody would wake up and realize, like, oh, this is a great use case for this. Allow the entrepreneurs to take some money off the table so they don't sell the company for $50 million. Instead, let everybody make $50 billion, but nobody else is willing to do it at this time. They were the only VC term sheet and the only ones willing to structure a deal like this.…

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