Loading...
January 16, 2025 • 1hr 5min
The Crazy Story of Google’s 7 Angel Investors
My First Million
In this episode, Sam Parr and Shaan Puri dive deep into the stories of seven strangers who made some of the greatest investments of all time by being early investors in Google. Through these stories, they explore the nature of angel investing, Silicon Valley culture, and how proximity and reputation can lead to outsized returns.
The Crazy Story of Google’s 7 Angel Investors
0:00
-0:00
Key Takeaways
- The story of Google's early investors demonstrates how much of Silicon Valley success comes down to serendipity and being in proximity to the action
- The "Ron Conway Principle" shows that building a strong reputation through generosity and helping others leads to better deal flow and opportunities
- The best startup investors (Ron Conway, Y Combinator) make investment decisions in under 10 minutes based on founder quality rather than extensive due diligence
- Proximity is power - being physically close to the action and key players dramatically increases opportunities through serendipitous encounters
- Early stage tech investing is about finding the rare breakout companies that become worth $100B+ rather than trying to make "reasonable" investment decisions
Introduction
In this episode, Sam Parr and Shaan Puri dive deep into the stories of seven strangers who made some of the greatest investments of all time by being early investors in Google. Through these stories, they explore the nature of angel investing, Silicon Valley culture, and how proximity and reputation can lead to outsized returns.
Topics Discussed
Andy Bechtolsheim - The First Check (0:00)
The story begins with Andy Bechtolsheim, one of the founders of Sun Microsystems, who wrote the first check to Google:
- Larry and Sergey emailed Andy about their new search engine idea using PageRank
- After an 8am parking lot demo, Andy immediately wrote a $100,000 check
- The check was written to "Google Inc" before the company was even incorporated
- Invested at a $10M valuation without even discussing terms
- "This is the best idea I've ever seen" - Andy Bechtolsheim
David Cheriton - The Billionaire Professor (7:10)
Andy told his friend David Cheriton, a Stanford professor and successful entrepreneur, about Google:
- Known as "The Quiet Billionaire" and one of the most frugal billionaires
- Invested $100-150k in the same early round as Andy
- Still rides his bike everywhere and lives modestly despite his wealth
- "I kind of hate the idea of living like a billionaire...something's wrong with people who live in houses with 13 bathrooms" - David Cheriton
Ron Conway - The Super Angel (10:10)
Ron Conway heard about Google at a holiday party from David Cheriton and became instrumental in their fundraising:
- Known for his "yellow legal pad" and always asking "How can I help?"
- Started angel investing after selling his company Altos Computing
- Investment philosophy:
- Only takes referred deals (5 pitches per day)
- Makes decisions within 5 minutes of meeting founders
- Looks for "insane 24/7 desire to work"
- Helped broker the deal between Google and VCs Sequoia and Kleiner Perkins
- "Companies are binary - either a huge win or zero. I just let the market figure out the valuation" - Ron Conway
Alfred Lin - The Zappos Connection (29:20)
Alfred Lin's story demonstrates Ron Conway's approach to helping founders:
- Conway helped save Lin's company with a crucial introduction despite barely knowing him
- The company later sold for $800M
- "Ron didn't know us from Adam and he saved our a*s" - Alfred Lin
Shaquille O'Neal - The Accidental Investor (35:00)
Shaq's Google investment came through a chance encounter:
- Met Ron Conway while playing with his grandkids in a hotel lobby
- Conway invited him to invest in Google
- Turned "a couple hundred grand" into over $100M
- Didn't even realize the scale of his return until reading about it in the newspaper
Susan Wojcicki - The Garage Owner (37:20)
Susan Wojcicki's connection to Google came through renting out her garage:
- Her sister Ann was dating Sergey Brin
- Rented her garage to Google for $1,700/month
- Became employee #16 at Google
- Later became CEO of YouTube after advocating for its acquisition
- Her sister Ann went on to found 23andMe
Pejman Nozad - The Rug Dealer (38:50)
While not a Google investor, Pejman's story illustrates Silicon Valley serendipity:
- Started as a rug salesman in Palo Alto
- Built relationships with tech founders who bought rugs
- Used rug profits to invest in startups
- Invested in successful companies like Dropbox and AppLovin
- Strategy: Would visit founders' homes to sell rugs, learning more about them personally
Jeff Bezos - The Competitor Investment (46:20)
Amazon's founder also invested in Google:
- Invested $250,000 early in Google
- Similar to Microsoft investing in Apple
- Shows how even competitors sometimes invest in each other
Lessons on Tech Investing (54:50)
The episode concludes with key insights about technology investing:
- Don't think in absolute numbers - focus on relative growth potential
- Power law returns mean a few massive winners matter more than many modest successes
- Over-thinking can lead to missed opportunities
- "The more I think, the worse my returns will get" - Shaan Puri
- Keys to success:
- Make quick decisions based on founder quality
- Stay close to the action (proximity is power)
- Build a strong reputation through generosity
- Focus on massive market opportunities
Conclusion
The stories of Google's early investors demonstrate how success in Silicon Valley often comes down to a combination of luck, proximity to the action, and building strong relationships through generosity. The episode highlights how the best tech investors focus less on detailed analysis and more on quickly identifying exceptional founders and massive market opportunities. The "Ron Conway Principle" of helping others without expectation of return proves to be a powerful strategy for building the relationships and reputation that lead to exceptional investment opportunities.