John Leighton watched the faces around the table with quiet amusement.
The silence had stretched long enough to confirm that he had genuinely stunned them.
“What’s the matter, everyone?
Did I say something frightening?”
David Filo was the first to find his voice, pushing back from the table and standing up.
“You never make a sound until you make a splash.
We were sitting here debating whether a hundred million was too optimistic, thinking we were already reaching, and then you walk in and make us feel like we’ve been thinking small our entire lives.” He shook his head, laughing despite himself.
“I didn’t think I could still surprise you, David.”
“You always surprise us.
Every single time.” He glanced at Jerry Yang and the others and shrugged, as if to say, what did you expect.
“Alright.
What does everyone think of the proposal?” Jerry Yang took the room back and looked around the table.
“These shares were given to me.
I don’t pretend to understand the internet business.
Whatever you all decide, I’ll follow.” Zach said it simply, with a shrug, and meant every word.
Everyone in the room understood the implication.
He was there because John Leighton had put him there.
His vote was not really in question.
“Tim.
You’re the general manager.
What’s your read?” Jerry Yang turned to him.
Tim took a breath.
“Jerry, everyone.
We misjudged the scope of what we’re building.
The internet has no ceiling, and anyone who moves first keeps the advantage.
We looked at the domestic market and called it a complete picture.
It wasn’t.
The global market exists, and if we can capture meaningful share of the global portal space, our previous valuation becomes irrelevant.
That oversight is on me as general manager, and I want to acknowledge it directly.
With that said, I agree with the direction.
I would suggest we frame it as a range rather than a fixed figure.
Something between three hundred and five hundred million.
It gives us room to negotiate while setting a credible floor.”
“Then we’re essentially in agreement.
Tim, walk us through what’s come in so far.”
“Currently there are four firms with concrete offers on the table, including Sequoia Capital and America Online.
The range runs from thirty million to just under a hundred million.
Nothing has broken the hundred million mark yet.
Most are still in observation mode, waiting to see how we respond.
It’s fair to say we have the attention of a significant portion of the investment market right now.”
“We don’t actually need a large number of investors,” John Leighton said.
“A few serious ones with real capital and real networks will serve us better than a crowd.
Quality over volume.”
Tim nodded in agreement.
What John Leighton didn’t know, and had no way of knowing, was that because of his involvement Yahoo’s trajectory had already diverged significantly from what it had been in his previous life.
The valuation, the timing, the profile of the company, all of it was running ahead of where it had been historically.
“Tim, here is what needs to happen.
Prepare a global development plan with a detailed capital requirement attached.
Then we respond to every firm and individual that has contacted us.
Our valuation is five hundred million.
We intend to raise approximately one hundred million.
Those who are interested can come to the table and we discuss specifics.
When they see the global strategy laid out, I think the interest will be substantial.”
Jerry Yang spoke it like a decision already made, anchoring directly to John Leighton’s number without hesitation.
“I’ll begin immediately.” Tim stood and left the conference room.
The energy in the room had shifted completely.
Every face around the table was lit up.
“If we pull this off, we create a new Silicon Valley legend.” Jerry Yang said it with the quiet certainty of someone who already believed it.
The core content of the meeting was effectively concluded.
The four original shareholders remained as Tim’s footsteps faded down the hallway.
…
“One more thing while it’s just us.
Given the direction we’re heading, listing and further financing rounds are inevitable.
We need to establish a framework for employee equity incentives before that happens.
People in the company already know financing discussions are underway, and there has been considerable internal conversation about it.
We need a plan ready to settle that before it becomes a distraction.”
“Personally, I think it’s premature to formalize anything right now,” John Leighton said.
“The company is still small.
The structure will look very different after the next financing round.
My suggestion is that we commit to launching an equity incentive plan before any IPO, make that commitment clearly to the team, and in the meantime put together a rough framework so people understand what to expect.
Something like setting aside ten percent of shares, with a defined split between management and general staff.
It doesn’t need to be final.
It just needs to exist so people can see the intention.”
“I agree.
We have too few people right now for a formal plan to mean much.
But the commitment and the outline, that’s reasonable.” David echoed.
It was settled without much debate.
“Now.
Who do we think is actually going to come to the table as our partners?” John Leighton asked, leaning back slightly.
“I’ll pass on that one.
Jerry, you tell us.” David excused himself immediately.
Jerry Yang thought for a moment.
“Based on our size and the scale of financing we’re talking about, most smaller players are effectively out of the picture already.
We’re looking at the major venture capital firms and some significant fund capital.
And it won’t just be Silicon Valley money.
The numbers we’re talking about will have drawn attention on Wall Street as well.
Sequoia is already in contact.
But I wouldn’t be surprised if some Wall Street funds come in alongside them, or even form a consortium if the individual positions feel too large for a single firm.”
“That’s reassuring to hear.
Alright then.
Since we’re aligned, I’ll leave the negotiations in your hands.”
Jerry Yang and David Filo both turned to look at him.
“You want us, just the two of us, to sit across from those people?”
“I’m fifteen.
Would you like me to explain to a room full of Wall Street investors why a teenager is at the negotiating table?
That’s a distraction none of us need.
Besides, you both know exactly what the position is.
You don’t need me in the room for that.”
“That is an absolutely terrible justification and you know it.”
“Worst case, after the financing closes, I will personally arrange a celebration.
A proper one.”
“You need to be there, John.
You’re an original shareholder.
Even if you say nothing, your presence matters.” Jerry Yang said it firmly, and David nodded alongside him.
John Leighton considered it for a moment, then agreed.
He would attend.
But they would lead.
They had the authority to negotiate and decide, and he trusted them with it completely.
That trust, both Jerry Yang and David Filo felt it land.
It was not a small thing.
This was their financial future being discussed, and John Leighton had handed them the wheel without a second thought.
They had assumed he would want to be closely involved in every detail.
The reality of how much he trusted them was not something either of them had fully anticipated.
With the serious business concluded, the four of them settled into easy conversation, the kind that had no agenda and no time limit.
Occasional bursts of laughter floated out through the conference room walls, leaving the rest of the Yahoo staff in the hallway genuinely puzzled about what could possibly be that funny.