Chapter 17: Verbal Agreement
As the two founders spoke more and more about the detail of their company plans, the eyes of the big investors in the room couldn't help but become brighter.
After all, these like-minded people are here this day because they are also optimistic about the future of the internet and wanted to focus on this emerging industry.
Currently, the biggest and most successful of them was Yahoo, and their immense curiosity led them right to this room.
If they can invest now and ride on the biggest ship with the highest potential, their future returns will be very optimistic.
Also, it is a normal thing for them to add Yahoo to their portfolio to have some diversity. If Yahoo were to succeed, they would also receive global acknowledgment for the first ones to 'discover' Yahoo.
"Our goal is to raise $80 million for 20% of equity. As long as we have the funds to realize our global strategy, Yahoo will be a world-class enterprise."
The two founders didn't bother hiding their plans and showed the representatives all their global strategy. Everyone will get to know about it in the upcoming months anyway.
They believed that these people would have a clear idea of what they plan on doing.
After all, these elites are not normal people. They have seen many things, and as venture capitalists, they do business all around the globe. They have more experience and more insight and can immediately ascertain the feasibility of their plan.
This is why they are here.
Once they become attracted to something and have a lot of money.
What comes next is very simple.
...
The next day, the second round of scheduled conference commenced.
At this time, the venture capital representatives have already reviewed the available documents and had done their own confirmations to make their decisions.
This day's purpose was to ask questions about the company, some extra details that they needed to know.
For example, specific employees and their purpose, some unexplainable expenses, and several legalities related to the company.
This is very simple. Yahoo is a legitimate business, and they never once tampered with data on their company sheets.
Yahoo still has pride in leading over other internet companies. There's no purpose in faking documents.
Their patents and copyrights are even more secured. If there are data about internet companies that filed the most patent, Yahoo should be placed on top of the list.
Every single innovative function and design was patented. They are like Apple in their early years.
David knows how important some of these designs are. There is no way he would leave them for others.
Apple was one of the companies that took the most advantage of this. Most of their designs are 'Apple designs.' You would not find them on other phones.
And their operating system is even stricter that they had successfully created a unique operating system. Just one look at the item, and you would know that it's an Apple product.
David especially focused on patents to bring down a huge chunk of their competitors. Many applications were blocked intentionally to give roadblocks after roadblocks to other companies.
"That will be it for today. Thank you for your participation."
David and the others shook hands with John Doerr and the rest of the representatives before sending them away.
Looking at their backs disappearing at the corner, they happily went back to the conference room.
"How is it? Did we close it?"
"Maybe tomorrow will be the last day. There's nothing more to discuss, and I'm sure they don't have this much free time either."
David laughed together with others. This can be called a successful day. Ahh, the more they dig into the company, the more convinced they will be.
He is certain that they won't be able to look away now.
...
The next day.
"Haha, well, you guys can be said to be very lucky. We essentially agree to your funding plan."
John Doerr laughed as he spoke about their decision. Hearing his words, David and the others finally exhaled, feeling more relaxed.
John Doerr has been one of their targets for this funding aside from Sequoia Capital. After all, he is one of the top technology venture capitalists in the world.
In 2017, he was recognized as the 40th richest tech billionaire and ranked as the 105th richest person in the United States and the 303rd richest person in the world, with a net worth of over $7.5 billion.
Through the years, John Doerr has backed some of the world's most successful entrepreneurs, including Larry Page and Sergey Brin of Google and Jeff Bezos of Amazon.
"However, there's still a disagreement on the funding ratio. You can look at this document to learn about the details. Hopefully, we can quickly come to an agreement. Once the funding is successful, we promise to give full support on Yahoo's global development plan."
Not long after, John Doerr and the others bid their goodbyes and walked out of the conference room to go back to their hotels.
"Well, let's discuss it here."
After making sure that they were finally gone, David quickly distributed the papers left to them.
The two founders and the others in the conference room quickly looked through the files. In fact, this funding can basically be said to be successful.
"Finally, it's done. Tomorrow will be the last day. I can't deal with this anymore."
"Haha, in fact, I think they are the ones getting more impatient. After all, they are busier than us."
They all laughed together, remembering the negotiation process in the last few days. The venture capitalist representatives seemed to get more and more interested and engaged each time. It was obvious that they had already been hooked.
"You guys, what do you think? There are only two key issues here, the valuation and the share ratio."
After reading through the file, David easily understood what they wanted. This is nothing more than just a simple process of bargaining.
They wanted to lower the valuation to $300 million just like they had expected and wanted to have a combined 35% of shares in exchange.
"$300 million is too low, and the share ratio is too much. I think that we can definitely fight for $400 million because it's already a fair value, but for the shares, how much should we let go?"
David shook his head at the offer. These people are really so cheap. It was already a bargain for them, but they still want an extra discount. This is just shameless.
"We can't give out too much in this financing. What if we might need another one in the future? At that time, we are basically eaten alive, and we won't be able to do anything about it."
"Obviously, you can see that this is not about the company's valuation at all. They are actually targeting the share ratio. We definitely need to put the safety measures we have discussed to protect our interests."
In the future, many inexperienced entrepreneurs fell into these traps and were forced to leave their own companies.
As long as there are specific conditions, they can easily ensure that their own interest will be protected even after going public.
Many of these people are more decisive and purposeful than the rest and set various conditions in the financing process.
These would include Mark Zuckerberg holding a huge chunk of Facebook's voting rights to control it effectively.
Google, Amazon, and Rupert Murdoch's control of News Corp., having about 39% of the company votes when his Murdoch Trust Fund only owns about 17% of the equity.
All of these people are powerful in their own ways.
The founders of these companies set smart conditions in the financing process to hold their companies firmly in their hands or limit them to a small group of people.
Even if their shares would be diluted or sold, they would still have a powerful sway in the company.
David's proposal essentially follows the example of these companies.
"Yes, you're right. Let's do it like that then."
After David's words fell, the two founders and others also easily agreed. They felt that it is really a great idea.
They are also business people that are out for their own interest, after all.
Once all of them agreed, they quickly talk about the specifics of voting rights and the conditions they will put forward in tomorrow's meeting.
CREATORS' THOUGHTS 
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