After the internal meeting concluded, everyone took a little time to prepare.
By lunch the Yahoo garage had gone unusually quiet, the kind of quiet that settles over a place when everyone in it understands that something significant is about to happen.
Even John Leighton felt it.
Jerry Yang and the others were visibly nervous, and that was understandable.
Two months ago they had been students.
Now they were about to sit across from some of the most powerful figures in American business.
Claiming to feel nothing would have been dishonest.
John Leighton himself, for all that he knew how the story was supposed to go, was not entirely immune either.
In his previous life he had been an ordinary person.
The individuals about to walk through the door were not ordinary people.
It would have been strange to feel nothing at all.
…
The upcoming financing had already captured the attention of the entire venture capital world and much of Silicon Valley.
Since Yahoo’s decision to pursue outside investment had become known, the company had become the dominant topic of conversation across the industry.
The numbers behind that attention were not hard to understand.
Registered members had passed two million.
Daily cumulative clicks were approaching ten million.
Every serious competitor on the internet had seen their traffic decline sharply since Yahoo’s revamped portal launched.
Yahoo had not just entered the market.
It had reshaped it.
Because of John Leighton’s early involvement, Yahoo’s development had run at least a year ahead of where it had been in his previous life, possibly more.
This was the most significant thing the butterfly had done to the world so far.
A few days earlier, Yahoo’s quoted valuation of five hundred million dollars had spread through every corner of the venture capital community and Silicon Valley.
The reaction, broadly, was that Jerry Yang and his team had lost their minds.
Five hundred million dollars.
For a company that had existed for two months, had fewer than twenty employees, and was operating out of a garage of just over a hundred square meters.
At this point in time, five hundred million dollars was not a weakened currency figure.
It was real money.
Many publicly listed companies did not carry that market capitalisation.
The idea that a garage startup was placing that number on itself struck most outside observers as somewhere between audacious and delusional.
Because of that, a significant portion of Silicon Valley had shown up today not out of admiration but out of curiosity.
…
At half past one in the afternoon, a line of cars pulled up outside the Yahoo garage.
The company stirred.
The original plan had been to hold the negotiations at a hotel or similar venue.
The investor representatives had proposed coming to Yahoo directly instead, saying they wanted to see the operation for themselves.
Jerry Yang had arranged for all non-essential staff to come out and receive them.
John Leighton walked out beside Jerry Yang and looked at the group emerging from the vehicles.
He recognised Michael Moritz immediately.
The others took a moment.
The introductions that followed produced a quiet, spreading shock through the Yahoo team as each name landed.
Don Valentine, founder of Sequoia Capital, had come personally, alongside Michael Moritz.
John Doerr, founder of Kleiner Perkins Caufield and Byers, was there.
Steve Case, Chairman of America Online, had made the trip.
Tim Draper, founder of Draper Fisher Jurvetson, stood among them.
Patrick McGovern, Chairman of International Data Group, the parent company of IDG Capital, was present.
And Andy Grove, President of Intel, had come to represent Intel Capital’s interests in person.
Each of them had brought people with them.
The garage forecourt was full.
…
What had just assembled in front of the Yahoo building was, by any reasonable assessment, one of the most concentrated gatherings of American business power that had ever come together to look at a single early stage company.
Ordinary venture capital deals, regardless of the dollar amounts involved, did not attract people at this level.
What had drawn them was not the money.
It was the idea.
The content plus traffic plus advertising model that Yahoo had introduced was not just a business plan.
It was the first coherent answer anyone had given to the question of how the internet could actually make money.
Every person standing on that forecourt had looked at that model and seen something that changed how they understood the future of their own industries.
That was why they had come themselves rather than sending deputies.
Once everyone had introduced themselves, the Yahoo team stood there for a moment in a state of collective quiet surprise.
Even John Leighton, who had known intellectually that the financing would attract serious interest, had not quite anticipated this specific room.
…
“Even the Holy Son looks surprised.” Michael Moritz appeared at John Leighton’s side, smiling.
“Michael.
Why are all these people actually here?
“Nothing dramatic.
Everyone was curious.
It happened to align.
I was a little startled myself when I saw who else had come.” Moritz said it lightly, though his expression suggested he was enjoying the moment.
In truth, John Leighton had been underestimating Yahoo’s position.
The company had done something that almost never happened in business.
It had created a new category and defined how that category worked before anyone else had a chance to.
Apple had done that with the personal computer.
Now Yahoo had done it with the internet portal and the free content advertising model.
That kind of pioneering carried a weight that the venture capital world recognised and responded to regardless of how young the company was or how small the garage.
Yahoo had opened the door to internet profitability.
Every person standing on that forecourt understood what that meant for everything they were building.
…
John Leighton caught the eyes of Jerry Yang, David Filo, and Tim across the crowd and gave a slight tilt of his head.
The three of them followed him a few steps to the side.
“Gentlemen.
I think we have been underestimating ourselves.
Look at who came today.
These are not people who travel for opportunities they consider marginal.
Whatever they see in Yahoo is worth more to them than the trip.
So when we sit down in that room, we hold the five hundred million dollar valuation.
If we move at all, we move carefully and not far.
They came to us.
Let’s not forget that.”
The three of them looked at each other.
Something shifted in the room.
The nerves were still there, but underneath them now was something steadier.
Jerry Yang nodded.
David Filo nodded.
Tim straightened slightly.
They turned back toward their guests with new eyes, exchanged a brief collective smile, and went to welcome the heaviest gathering of business power that had ever stood outside a Silicon Valley garage.