From: acquiredfm
The early personal investments in Google by individuals like Ram Shriram and Jeff Bezos illustrate the profound financial opportunities available to early backers of transformative technology companies, as well as the impact of history and relationships in Silicon Valley. These investments, made under unique circumstances, yielded astronomical returns and significantly contributed to the personal wealth of the investors.
The Junglee Connection: A Catalyst for Investment
The story of early Google investment is intricately linked to Junglee, a comparison shopping site founded by three Stanford computer science PhDs and a business guy from Netscape, Ram Shriram [00:00:13]. Amazon acquired Junglee for approximately $150-175 million [00:00:29]. However, the acquisition was “ill-conceived from the get-go,” and the Junglee team, required to move to Seattle to avoid a tax nexus in California, quit within a few months and returned to Palo Alto [00:00:43].
Despite the failed acquisition, Ram Shriram maintained a friendly relationship with Jeff Bezos [00:02:12].
Ram Shriram’s Initial Investment
Back in Palo Alto, Ram Shriram, through his connections with the former Junglee co-founders, was introduced to two other Stanford computer science PhDs: Larry Page and Sergey Brin [00:01:21]. Recognizing the potential of their “Backrub” page rank concept, Shriram made the first investment in Google, contributing $250,000, and subsequently joined Google’s board [00:02:00].
Jeff Bezos’s Personal Entry into Google
Approximately six months after Shriram’s investment, Jeff Bezos, having heard about Google through his ongoing contact with Shriram, expressed interest in meeting Page and Brin [00:02:08]. Bezos and his then-wife MacKenzie flew to Silicon Valley and met with Page, Brin, and Shriram at Shriram’s home [00:02:36].
After the meeting, Bezos told Shriram he wanted to invest in Google as well [00:02:53]. Despite the seed round being closed and venture capital firms like Kleiner Perkins and Sequoia Capital already circling for a Series A, Bezos insisted on investing on the same terms as Shriram [00:02:56]. Shriram successfully lobbied Page and Brin to accept another $250,000 personal investment from Jeff and MacKenzie Bezos at the original seed price [00:03:16].
The subsequent Series A round for Google, split between John Doerr of Kleiner Perkins and Mike Moritz of Sequoia Capital, famously valued the company at 10 million or even lower [00:04:09].
Financial Impact and Returns
Google went public in 2004 with a market capitalization of $23 billion [00:05:10]. It is widely believed that Jeff and MacKenzie Bezos owned at least one percent of Google personally, even after dilution from the Series A, as Google did not raise another venture round before its IPO [00:04:22].
At the time of Google’s IPO, their shares would have been worth approximately $230 million, or a quarter-billion dollars [00:05:17]. Bezos has never publicly commented on whether he and MacKenzie sold their Google shares [00:04:48]. However, even if they held only until the IPO, this investment alone provided a substantial foundation for Bezos’s personal wealth, independent of his Amazon holdings [00:05:03]. Since its IPO, Google’s value has increased 65x over the next 18 years [00:05:29].
::info This early investment provided Jeff Bezos with significant capital for future ventures, including investing in other companies like Blue Origin, and becoming a large personal investor in venture funds like Benchmark, the main backer of eBay [00:05:46]. ::
The story of the early Google investments serves as a powerful example of the long-term value generated by early-stage venture capital investments and the unexpected ways professional relationships can lead to immense financial success [00:06:45].
“I feel like there’s a lesson there and the lesson is invest in Google.” [00:06:50]