In the wake of Yahoo’s successful financing, research into Yahoo’s internet model began spreading through institutions and individuals across the country and beyond.
John Leighton had underestimated the reach of wealth, particularly in a capital driven world like the West.
From this point forward, many things would begin to deviate from the history he remembered.
The butterfly had flapped its wings, and the first real storm was forming.
Somewhere at MIT, a young man with a face full of acne stared blankly at the Wall Street Journal.
In Japan, a short middle-aged man standing at roughly one and a half meters tall stared with equal blankness at his own copy of the news.
Neither of them knew yet exactly what they were feeling, but both of them felt it.
John Leighton, meanwhile, was in a very good mood.
He flipped through the newspapers casually, watching the world react from a comfortable distance.
The coverage was mostly variations on the same theme: astonishment at the four hundred million dollar valuation, wonder at how quickly internet wealth could accumulate, and a growing consensus that the internet was the next great concentration of opportunity.
The professionals in the media, he thought, were not entirely useless after all.
…
“So, Boy.
What are you planning to do next?”
“Honestly, Zach, we don’t need to do very much at all.
Jerry Yang and the team have everything in hand.
We go back to Los Angeles, and then we wait for Yahoo to grow.
Waiting to get rich.
Is there a better way to spend one’s time?
That might genuinely be our life going forward.” John Leighton said it with complete seriousness.
He had been thinking about this for a while.
As someone reborn with knowledge of the next twenty years, he had advantages no one else in the world possessed.
The question was how best to use them.
Running an internet company himself was an option, but he had thought it through carefully and set it aside.
The founders of the great companies of the coming era, Google, Amazon, Facebook, were exceptional people operating at a level that could not simply be replicated by someone who happened to know the future.
Knowing what would happen and knowing how to build it were two very different things.
Venture capital, on the other hand, was a different proposition entirely.
With enough capital and the knowledge of which companies were going to matter, the returns were essentially predetermined.
The most celebrated venture capitalists of the coming era would accumulate influence and wealth that rivalled or exceeded many of the founders they backed, often with far less public exposure and far fewer operational headaches.
That was the model worth following.
…
He laid it out for Zach plainly.
Zach straightened up almost immediately.
“You’re serious about this.”
“Think about what just happened.
My initial five hundred thousand dollars is now worth nearly a hundred million on paper.
After the next financing round or an IPO, that number multiplies several more times, possibly more than ten times.” John Leighton said it carefully, keeping the upper estimate conservative.
He did not want to tell Zach that Yahoo’s eventual peak market value would approach a hundred billion dollars.
That number would have made Zach question his sanity.
He had thought the current four hundred million dollar valuation was already beyond reason.
The idea that it might be several times too low was genuinely difficult to process.
…
“Alright.
You’ve been right about everything so far.
What exactly are you planning to do?”
Zach’s trust in John was absolute at this point.
The man, the boy, whatever he was, had turned him from a broke lawyer sleeping on a sofa into a millionaire in under three months.
If he said the next step was to build an investment company, then that was what they were going to do.
“Zach, your legal background is exactly what this requires.
The structure I have in mind is an investment company at the front, with the ability to launch funds through it.
Behind that, the holding structure should be built through offshore entities so that the capital flows are not easily traceable.
The details of how to set that up properly are your area, not mine.
What I care about most is security and discretion.
I do not want any of this becoming public knowledge.”
Zach stared at him.
“Where does a fifteen year old learn to think like this?
John.
You are fifteen years old.
Do you understand that?”
John Leighton shrugged with an expression of pure innocence and said he was a genius.
…
His thinking was straightforward, even if he kept the deeper logic to himself.
If his future holdings were ever fully exposed, the number would shock the world into silence and bring the kind of attention that created nothing but problems.
Security and discretion were not optional extras.
They were the foundation of everything.
The structure he envisioned was simple in outline.
Build a quiet profile through Yahoo first.
Then establish an investment vehicle, eventually something resembling a private investment bank.
Use venture capital funds to back the companies he knew from his previous life were going to matter.
Manage the tax exposure intelligently.
Stay out of the public eye as long as possible.
As for running a technology company himself, he had genuinely considered it and put the idea down.
He had read enough in his previous life to understand what running a large company actually involved.
Rooms full of world class business executives delivering reports in professional language he would largely not understand, competitors from every corner of the world, and a butterfly effect broad enough to erode the informational advantage that was his only real edge.
The thought was exhausting before it even began.
Being an investor required none of that.
He did not have to worry about the operational future of any single company.
He did not have to manage people. Find the original chapter at novelping.com.
He could move at whatever pace suited him and live whatever kind of life he chose.
And with the knowledge he carried, the outcome was essentially not in doubt.
There was no better position to be in.
…
“One practical question.
Where does the initial capital come from?”
“Zach, do you think we could use our Yahoo shares as collateral for a bank loan?
The shares aren’t publicly traded yet, so we would probably need a guarantor or a guarantee company to make it work.”
“That’s feasible.
Getting the guarantee arranged is the main obstacle.”
“Then that’s the plan.
As for the guarantor, I have some thoughts.
We’ll follow up with the investment firms from the Yahoo round in a few days.
One of them will be willing.”
He also needed to start researching which companies to target next.
It was still early 1995.
Several of the most important companies of the coming era were either just being founded or had not yet launched publicly.
He needed to get online and start mapping the landscape carefully.
Somewhere across Silicon Valley, a number of people felt an inexplicable chill pass through them without any obvious cause.
…
“Alright, Zach.
We’re done here.
Let’s head back to Los Angeles tomorrow.
I’ve missed it.”
“Whatever you say.”
“I’ll make sure you get to make a few decisions next time, Zach.
I promise.”
“Boy, I am your legal guardian.
You do understand that.”
“Understood, Mr.
Guardian.
Start packing.
We leave tomorrow.
And Zach, trust me on this.
The next place we live in Los Angeles will not be that apartment.”
“What are you thinking?
Malibu or Beverly Hills?”
Zach’s expression, already naturally dark, somehow managed to go darker still as John Leighton continued talking without waiting for an answer.