It had already been a week since John Leighton arrived in Silicon Valley.
With the financing plan submitted and nothing left to do but wait, he had used the time to explore the area properly, unlike his first visit which had been spent almost entirely indoors.
Each day he met with Jerry Yang and the others to go over the financing situation and track which investment firms had responded to the proposal.
It had been a full week by any measure.
…
The phone rang.
John Leighton took the Motorola 8900 flip phone from Zach’s hand and answered.
He held it for a moment and felt the weight of it.
Half a pound, at least.
Having spent years with the slim, light devices of a later era, using this was a genuine adjustment.
This was still the latest model available, released earlier that year.
He had bought it two days ago, because operating in Silicon Valley without a phone was simply impractical.
Since then, Zach had become quietly obsessed with it.
He carried it everywhere and treated it with the reverence of someone who understood he was holding something historically significant.
He was not entirely wrong.
This was the world’s first commercially available flip phone.
In terms of what it represented, it was worth keeping.
It was also, at over a thousand dollars before call charges, a symbol of a certain kind of success.
Most people could not afford it.
In later years, this device would become a collector’s item.
For now, it was a brick that made phone calls and impressed people.
“Hello.
Saint John Leighton speaking.”
“John Leighton.
It’s Jerry Yang.
Have you had enough sightseeing?
It’s time to come in.
The financing negotiations are starting.”
“How does it look?
Has everything been confirmed?”
“Yes.
The initial valuation has filtered out the smaller firms and individual investors.
We’re down to the serious players.
I’ll explain properly when you’re here.
Negotiations begin then.”
“I’ll be right over.”
He ended the call, gathered Zach, and they drove to the Yahoo offices.
…
When John Leighton and Zach arrived, the office was busy in the way it always was, everyone absorbed in something.
John Leighton was, as usual, the most idle person in the room, which was part of why he was sometimes reluctant to come in.
There was something uncomfortable about standing around doing nothing while everyone around you was working hard.
“Your Highness, the Holy Son has arrived.
Any adventures or romantic encounters out there in Silicon Valley?” David Filo called over from across the room, grinning.
“David, I’m still a minor.
Keep talking like that and I’ll report you to Child Protection Services.”
“How do I keep forgetting you’re fifteen?
Honestly, the law should make an exception for a specific category of minor.
Geniuses.
People like the Holy Son should not be legally classified alongside ordinary children.
Does anyone disagree?”
The room laughed.
The mood inside Yahoo was visibly good, the kind of energy that builds when something significant is clearly about to happen.
…
“John Leighton.
Good, you’re here.” Jerry Yang stood up from his desk and came over.
He gathered David Filo and Tim, and the four of them went into the small conference room.
“Let’s use the time well.
Tim, walk us through the confirmed list one more time.”
“Confirmed attendees this afternoon: representatives from Draper Fisher Jurvetson, Intel Capital, Kleiner Perkins Caufield and Byers, IDG, Sequoia Capital, and America Online.”
“That is a serious group.” John Leighton said, smiling.
“It is.
I think what we’re about to do is going to become a piece of Silicon Valley history.” Tim said it with genuine feeling.
He was right to feel that way.
Internet venture capital at this point in 1995 looked nothing like what it would become.
Most investments were measured in the low millions, sometimes in the hundreds of thousands.
Financing rounds of the scale Yahoo was proposing simply did not exist yet in this space.
What was about to happen in that room would set a new standard.
…
John Leighton thought through each firm as Tim had named them.
They had a long reach and a strong track record.
Intel Capital was the strategic investment arm of Intel itself.
Being backed by Intel in Silicon Valley was about as powerful a signal as you could send.
The resources and network that came with it were immense.
Kleiner Perkins and Sequoia Capital had been known since the seventies as the twin pillars of Silicon Valley venture capital.
Between them they had shaped the trajectory of the technology industry for decades.
Having both in the room was not a small thing.
IDG, the International Data Group, was headquartered in Boston and operated one of the largest venture capital networks in the country.
The institutional weight behind it was considerable.
America Online was one of the largest internet service providers in the United States, and its financial resources were in a different category from most.
John Leighton knew that AOL would eventually merge with Time Warner to form one of the largest media and technology conglomerates in American history.
The founder and CEO was one of the genuine business legends of the era.
For AOL to be sitting across the table from Yahoo said something significant about how Yahoo was being perceived.
What John Leighton had not fully appreciated until now was just how much of this attention was directly attributable to him.
Yahoo’s profit model had become a benchmark.
Competitors were already studying it and preparing to adapt their own approaches.
In the month and a half since the revamped portal launched, Yahoo had captured the attention of virtually every serious player in the internet industry.
…
In John Leighton’s original timeline, at this point in early 1995, Jerry Yang and David Filo were still working out of a small room in the Stanford engineering building.
Sequoia Capital’s investment of one million dollars, which came in April of that year in exchange for twenty five percent of the company, had been the breakthrough that allowed them to leave campus.
Masayoshi Son’s two million dollar investment later that same year had added another five percent dilution.
It wasn’t until just before Yahoo’s listing in 1996 that Son proposed a hundred million dollar investment, eventually accumulating thirty five percent of the company’s shares.
At the time of listing, Yahoo’s market value had broken eight hundred million dollars on the first day.
The Yahoo sitting in this garage in March of 1995 was already performing at a level comparable to the pre-listing Yahoo of 1996.
The gap was more than a year, and it showed in the room that was about to fill with some of the most powerful investment capital in America.
This was what a functioning profit model, introduced a year and a half ahead of schedule, actually looked like in practice.
…
The group settled on their approach for the afternoon.
Jerry Yang and Tim would lead the conversation.
Zach would handle the legal dimension.
John Leighton and David would support from the sides, stepping in where needed.
The five of them would face the investors together.
John Leighton leaned back in his chair and thought about the people who would be walking through the door in a few hours.