Chapter 7
Angel Investors
Essential Idea: Get Funding from High Net Worth Individuals
In 1982, Andy Bechtolsheim cofounded the computer company Sun Microsystems. Sun was an almost instant success, earning more than $1 billion in sales by 1988. In 1995, Bechtolsheim left Sun and founded Granite Systems. A year later, Cisco Systems acquired Granite for $220 million. An already rich man, Bechtolsheim was suddenly much richer.
In 1996, Larry Page and Sergey Brin were PhD students at Stanford and had started working on a research project that analyzed the mathematical underpinnings of the Internet. Specifically, they wanted to look at how to categorize the usefulness of websites using, among other things, the number and quality of sites that linked to a particular page. Using mathematical algorithms, Page and Brin soon saw that the pages that had the most sites linking to them on a given subject were among the most relevant in a search engine query; after all, if a lot of sites linked to a page, that page must be useful, right? This was a revolutionary insight at the time. Page and Brin then decided to use this information to create their own search engine, using, at first, the Stanford website. The URL? Google.stanford.edu.
The URL Google.com was not registered until the next year, 1997, and the company did not even incorporate until 1998. Even then, it did so only because it had to. The reason was that Page and Brin met Andy Bechtolsheim in 1998, gave him a demonstration of Google, ...
