Anti-portfolio: investment opportunities that we lost
Bessemer Venture Partners (BVP) is an American investment company operating worldwide. It was founded in 1911 as a family trust fund for the money of the investment company Bessemer Investment Company in the New York subdivision of the company Henry Phipps, co-founder of Carnegie Steel. The latter was founded at the end of the XIX century, and sold to US Steel at the beginning of XX. The sale became the largest deal of the beginning of the century, and made its founder Andrew Carnegie one of the richest people of his time.
In 1974, the trust fund ceased to be a purely family-owned and engaged in international investment. Today, the company manages $ 4.5 billion in total capital. Its offices are in Menlo Park, San Francisco, New York, Boston, as well as in Israel and India. Interestingly, on her web site, in addition to the portfolio, there is also an anti-portfolio, a list of the biggest missed opportunities that she is not ashamed to talk about.
Bessemer Venture Partners is perhaps the oldest investment company in the United States, rooted in the Carnegie Steel empire. During this long and interesting history, our company has been able to screw an unprecedented number of times, having missed chic investment opportunities.
Throughout our history, we have made various investments - in the company for the production of wigs, in the preparation of french fries, and in the railway in Hawaii. However, we decided not to make the investments listed below, although for each of them we had the opportunity - after which each of the listed companies flourished and became extremely successful.
The reasons for the failures varied. In some cases, out of generosity, we allowed another, younger investment company, which was not very lucky, to go ahead, and hoped that it would earn its billions of profits. In other cases, our partners ended their free time on a daily basis, and they were afraid that due to the new meeting they would have to paste a new page into the diary.
In any case, we want to pay tribute to these companies in our anti-portfolio, whose phenomenal success inspires us in current affairs to create growing businesses. In other words: if we had invested in one of these companies, we might not have worked today.
Airbnb
Jeremy Levine met with Brian Chesky in January 2010, the first month when the company earned $ 100,000. Brian's request for $ 40 million was regarded as “insane”, but Jeremy was impressed with the offer and he planned to meet again in May. But Jeremy did not know that $ 100 thousand in January turned into $ 200 thousand in February and $ 300 thousand in March. In April, Airbnb received an investment of one and a half times more “crazy” money. And in the last round of investment, they received a 500-fold greater amount.
Apple computer
BVP had the opportunity to invest in Apple's secondary equities before going public on a valuation of $ 60 million. Nill Brownstein called it an “incredibly expensive” request.
Atlassian
The hype about the tool for developers made in Australia (here is a surprise!) Brought Byron Dieter to the company's threshold at Atlassian in 2006. Among the notes recorded during the meeting, there were records like “they financed themselves, started with a credit card” and “an excellent business, but Scot and Mike do not want to go to the exchange”. Many years and many meetings later in 2010, the first opportunity appeared to invest in the company, but an estimate of $ 400 million was recognized as “too rich” at that time. In 2015, Atlassian held the richest IPO in Australian history, and the share that we lost today is worth more than a billion dollars.
ebay
- stamps? Coins? Comics? Yes, you're kidding, - thought Cowan. - There is nothing to think about, we are missing.
Jeremy Levine spent the weekend at the corporate holiday home in the summer of 2004, kicked off by persistent student Eduardo Saverin and his frantic presentations. In the end, caught during lunch, Jeremy gave him his wise advice: “Listen, kid, haven't you heard about Friendster? Forget! Its end!"
FedEx
Surprisingly, BVP missed the opportunity to invest in Federal Express seven times.
Cowan's girlfriend's college rented a garage in which Sergey and Larry worked in the first year. In 1999 and 2000, she tried to introduce Cowan to "these two very smart Stanford students who write search engines." Students? New search engine? At the most important moment, even for our anti-portfolio, Cowan asked her: “How can I get out of the house so as not to pass by your garage?”
Intel
Pete Bancroft from BVP was unable to agree on the details of cooperation with Bob Noyce , and he instead received funding from a man named Arthur Rock [an American investor who had managed to invest in such companies as Intel, Apple Computer, Scientific Data Systems and Teledyne at an early stage / approx. transl.]
Intuit
Like all other investors on Sand Hill Road [a street in the town of Menlo Park, California, where there are many venture capital companies / approx. trans.], Neil Braunstein rejected the proposals of the founder of Intuit Scott Cook. Scott scrubbed on the bottom of the barrel just about $ 225,000, beating his friends, including his classmate at Harvard Business School and the founder of Sierra Ventures, Peter Wendell, who gave him $ 25,000, just to get Scott out of it.
Kayak
After careful study of the proposal, Jeremy Levine found a fatal flaw in the company's business model: airlines will not pay a lot of money for hosting on this platform. Fortunately for Kayak, the hotels agreed to pay a lot of money. As well as the company Priceline, which subsequently bought the project for $ 1.8 billion.
Lotus, Compaq
Ben Rosen, one of the founders of [investment firm] Sevin Rosen, offered Felde Hardimon a chance to invest in Lotus and Compaq Computer one day. Hardimon says: “Lotus has not yet revealed itself, and I was worried about this situation. As for Compaq, I told him that I didn’t see a future for laptops, since IBM is doing this. ”
Paypal
David Cowan missed the round of Series A. The team is amateurish, a mess with work permits, and, 4 years later, buying eBay for $ 1.5 billion
Snapchat
In 2011, Jeremy Levine was three hours late to Los Angeles Airport due to flight delays, and he only had time for one of the two meetings recorded in the diary. He threw a coin and called Ivan Spiegel [co-founder and general of Snap Inc.] with an apology. Since Jeremy doesn’t do anything in half, he went to Zip Recruiter, where he sucked the brain of its CEO, Ian Siegel, about vulnerabilities in the company's business model. SNAP turned out to be the largest IPO of 2017, and Zip Recruiter is one of the fastest growing companies in the SaaS industry.
Tesla
In 2006, Byron Dieter met the Tesla team and tried their new roadster. He made a deposit for this car, but did not invest in a company with negative profitability, telling its partners: “This is a win for everyone. I'll buy a great car and some other investor will pay for it! ”The company's market capitalization in 2014 exceeded $ 30 billion. Byron recently fully paid for the purchase of a new Model X car.
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