[Chapter 13: Michael Moritz's Visit]
"So, Mr. Moritz, what brings you here today?"
"Yes, I'll get straight to the point. Have you two ever thought about selling your Yahoo shares? My company is willing to invest directly and purchase the shares you hold. What do you think about that?"
"What?" Zach exclaimed, caught off guard and excited.
"Wow, Mr. Johnson, are you surprised?"
"Oh, it's nothing," Zach said, glancing at John Leighton, who looked calm and gave him a subtle look to stay composed. Zach thought to himself, 'I'm not even as good as a child like John. But John's not an ordinary kid -- he's a monster, so it's okay.'
Clearly, Yahoo's growth was catching the attention of major investors.
"Yes, if you are willing to sell, my company is prepared to pay a premium. We can value Yahoo at $100 million, which means your shares would be worth about $25 million. Congratulations, your initial investment has already yielded significant returns in just two months," Michael Moritz said with a hint of envy in his voice as he looked at the two.
From what he knew, they had only invested about $500,000, and the value had increased fifty-fold in two months -- that was unbelievable.
At this point, Michael Moritz's entire net worth was less than theirs. In the world of finance, envy was inevitable. Of course, this wasn't the legendary venture capitalist he would become later.
What Moritz didn't know was that Zach was probably just thrilled to learn his shares had become valuable, while John already understood that Yahoo's valuation was easily over $100 million. The final number would depend on future negotiations.
"I'm sorry, Michael, but we're not planning to sell our shares. We all believe in Yahoo's future," John said, calm and resolute.
"What? Do you think the valuation is too low?" Moritz asked, somewhat shocked.
"No, it's not about the valuation. Mr. Moritz, since you came here, I assume you know that the major shareholders had a meeting at Yahoo this morning.
Yahoo has a comprehensive funding and growth plan. Sequoia Capital should be expecting our financing proposal soon. We look forward to good news from you.
So, we're not interested in selling our shares. Moving forward, Yahoo's growth will depend on strong support from Sequoia Capital and yourself."
Seeing John's confident and determined gaze, Michael Moritz realized there was no chance of acquiring their shares.
"That's unfortunate. Well, I hope we can collaborate more in the future." As a future successful businessman, Moritz gave up the idea of buying their shares and expressed willingness to cooperate.
"Of course. As I said before, we need funding to grow. We rely on support from Sequoia Capital and you," John replied, signaling his openness to venture financing.
"Speaking of which, I really regret missing the chance to join earlier. I went to Stanford hoping to find Jerry Yang and David Filo, but I was too late -- they already had angel investors. I wanted to approach you guys back then but missed the window. Looks like I'll have to wait until the next round of financing."
"Well, that's lucky for me. Didn't expect you, Mr. Moritz, to be bullish on Yahoo. It seems our goals are closer than ever."
"Absolutely. Yahoo's success is obvious. Most importantly, it has a viable business model.
Anyone who follows the internet knows that since the revamped Yahoo launched, it has skyrocketed."
"That's thanks to the internet environment and the hard work of Jerry and David."
"..."
Michael Moritz looked at the serious young man spouting nonsense and was speechless.
"All right, so the nickname 'Saint' inside Yahoo isn't entirely undeserved. You don't look like a 15-year-old."
"I guess so. A lot of people say that. Usually, a 15-year-old wouldn't risk their entire savings like this," John shrugged casually.
"Well, you are a lucky kid, Saint John. I won't keep you any longer. See you at the next funding round," Michael Moritz said, and with mutual gestures, he left their room.
----
After sending him off, Zach burst into laughter, clearly realizing the value of his 5% stake.
"John, thank you!" Zach suddenly looked serious and said to John.
"Come on, Zach. No need for that between us -- you are my legal guardian," John joked.
"Yeah, of all the things I'm grateful for, meeting you tops the list. Look at me -- I've become a millionaire."
"Well, Zach, millionaire is just the start. Next, you'll be a multimillionaire, maybe even a billionaire," John said confidently.
John wasn't exaggerating -- based on Yahoo's later public offering and growth, Zach's 5% stake, even when diluted, would be worth hundreds of millions.
"All right, I hope so. Should we celebrate, Mr. Multimillionaire?" Zach joked.
"Well, Zach, how can we celebrate? This is just a valuation. We can't cash out yet. Our bank accounts still look pretty empty. So don't get your hopes up. Until we see actual money, it doesn't count."
"Yeah, that's true. We're probably the poorest millionaires around," Zach said lightly, realizing the reality.
Clearly, all celebration plans were washed away by John's realistic reminder -- no matter how high the valuation, unless you cash out, it's just numbers on paper.
...
Zach settled down, but John's mind was elsewhere. He had been thinking about how to claim his share of the internet boom.
Even though they had invested in Yahoo, it wouldn't go public until 1996. He didn't want to miss out on the opportunities in the meantime.
1995 was a turbulent year for the internet -- Netscape had just gone public, and Amazon was about to launch. If he could get involved, he'd be laughing even in his dreams.
Michael Moritz's visit sparked an idea and a glimmer of hope in John.
He thought, 'Sequoia Capital and Michael Moritz -- I hope you don't disappoint me. This year's funding might have to depend on you.'
At that moment, for reasons unknown, Sequoia Capital founders Don Valentine and Michael Moritz shivered involuntarily.
*****
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