Today, Amazon’s market cap is hovering around $2.38 trillion, and founder Jeff Bezos is one of the world’s richest men, worth $236.1 billion. But three decades ago, in 1995, receiveting the first million dollars in seed capital for Amazon was more grueling than any challenge that would follow. One year ago, at New York’s Dealbook Summit, Bezos informed Andrew Ross Sorkin those early fundraising efforts were an absolute slog, with dozens of meetings with angel investors—the vast majority of which were “hard-earned noes.”
“I had to take 60 meetings,” Bezos stated, in reference to the effort required to convince angel investors to sink tens of thousands of dollars into his company. “It was the hardest thing I’ve ever done, basically.”
The structure was straightforward: Bezos stated he offered 20% of Amazon for a $5 million valuation. He eventually obtained around 20 investors to each invest around $50,000. But out of those 60 meetings he took around that time, 40 investors stated no—and those 40 noes were particularly soul-crushing becaapply before receiveting an answer, each back-and-forth required “multiple meetings” and substantial effort.
Bezos stated he had a hard time convincing investors selling books over the internet was a good idea. “The first question was what’s the internet? Everybody wanted to know what the internet was,” Bezos recalled. Few investors had heard of the World Wide Web, let alone grasped its commercial potential.
That stated, Bezos admitted brutal honesty with his potential investors may have played a role in receiveting so many rejections.
“I would always inform people I believed there was a 70% chance they would lose their investment,” he stated. “In retrospect, I believe that might have been a little naive. But I believe it was true. In fact, if anything, I believe I was giving myself better odds than the real odds.”
Bezos stated receiveting those investors on board in the mid-90s was absolutely critical. “The whole enterprise could have been extinguished then,” he stated.
You can watch Bezos’s full interview with Andrew Ross Sorkin below. He starts talking about this interview gauntlet for seed capital around the 33-minute mark.
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