Friday afternoon, San Jose, Sun Workstations, Inc.

After parking the Volvo 760, Bill got out of the car and headed for the first company he had invested in.

After talking to Sofia Moritty yesterday about starting a sporting goods company, he began to plan Under Armour's development path.

There is not much market for sweat-absorbing and quick-drying underwear, at most it has a reputation among NFL stars, and rugby-related supplies can't sell much money, and the real money has to be sneakers, such as the Flying Jordan AJ series, which has been imitated by countless copycat manufacturers in later generations.

The AJ1 was released in the mid-eighties, and the reason for the popularity of this classic sneaker was mainly the red and black color scheme and Michael Jordan.

Nike signed the basketball player in the fall of '84, when Flyer Jordan was the third overall pick in the NBA draft. Since then, Nike, which has been losing money for many years, began to package this star rookie player who won the NCAAB championship with the University of North Carolina team, and launched the sneaker "Jordan Generation" named after Jordan in '85.

At that time, the NBA league stipulated that the white part of the shoes worn by players must not be less than 51%, and the red and black color scheme of AJ1 clearly violated this rule, so the rebellious young people saw the NBA rookie wearing a pair of distinctive shoes and jumped up to shoot, and immediately had the urge to buy and buy.

It takes about 12 to 18 months to build a pair of sneakers, and Bill calculates the time before and after, and finds that if it works well, preemptively signing Jordan and replicating AJ1's success, his Under Armour has a good chance of replacing Nike.

Therefore, he was very interested and wanted to pull up the team and do a big job. It's just that this end hasn't been done yet, and Sun Workstation Company has a new situation.

In the company's financing in October last year, the company introduced KPCB Ventures, which is active in the Silicon Valley area, and made KPCB professionals the company's CEO, and after nine months of rapid development, Sun Workstation proved its R&D strength and began to get on the right track. So the venture capital firm wanted to buy the shares in the hands of the "insignificant" shareholders in order to pave the way for the subsequent listing of Sun Workstation Company.

Of course, KPCB naturally wouldn't say that Bill Ferrari was an inconsequential shareholder, this was his own speculation.

"Mr. Bill, thank you for coming to our company after training to discuss this."

Upon entering, Mr. Ferrari was greeted by a middle-aged man with his head slightly held high, six teeth bared with a standard professional smirk, and a high-end suit, with a male assistant and a female secretary.

This person is the new CEO of Sun Workstations, Henry Griffiths.

"What about Mr. and Mrs. Garcia? Did they come? ”

KPCB's move this time was aimed at Mr. Ferrari and Mr. and Mrs. Garcia.

"We've been talking to Mr. Garcia for a while, please go upstairs and talk about it."

Henry spits words out of his mouth very quickly, giving Bill the feeling of communicating with a lawyer.

The meeting took place in a business-like long-table conference room, and when Mr. Ferrari entered, Dr. Andy Bertolsheim, the representative of the founders' shareholders, and Mr. Garcia were chatting.

"Hey, Bill." Dr. Andy high-fived Eighty-Eight as he entered.

Mr. Garcia, who is also a Stanford alumnus, was more disciplined, shaking hands with Bill before sitting down with the hem of his suit.

"That's right, the company under our feet was valued at 15 million at the time of the last financing, and after nine months of market testing, we KPCB gave a reasonable valuation of about 25 million. Both gentlemen are financial investors......"

Henry made a phone call, mainly meaning that the KPCB wanted to buy the shares in the hands of the García couple and Mr. Ferrari for $2.4 million and $1.92 million.

According to this person, they were willing to raise the valuation of Sun Workstation Company to 30 million, and then buy the shares in the hands of the two individual shareholders, but the Garcias did not know what they were bewitched by, or for reasons they could not say, they were ready to sell the shares before Sun Workstation Company went public.

However, Bill can also understand the Garcia couple, the investment has quadrupled in a year and a half, from 600,000 to 2.4 million, and when will they not run away?

Mr. Ferrari's mentality is different, he now has more than a million dollars in cash, whether it is to invest in Cisco or start his own sporting goods company, it is enough, and he does not need more cash, so at least for now, he will not exit this well-run hardware manufacturing company.

Halfway through the conversation, Bill broke off the conversation on the grounds that he was having a private conversation with Dr. Andy.

"If I don't sell this stake now, what are they going to do in the future?"

In Dr. Andy's own office, Bill and the founder discussed the matter.

Dr. Andy poured himself and the football player a glass of wine and walked over to the visitor and handed it to the visitor, "In my superficial opinion, they will bring in new financing again to dilute your shares." But you don't have to worry, our Sun Workstation Company is now valued at more than $20 million, and unless tens of millions of dollars are used, it will be difficult to dilute your shares to less than five or three percent. ”

It only cost more than 4 million to directly buy the shares in the hands of the Garcia couple and Bill, and it will cost at least more than 20 million US dollars to dilute the shares of the two to half of the original, so it is clear how it is cost-effective.

"But I don't want to be diluted. In fact, based on my knowledge of the computer industry, I am very optimistic about your development prospects, and our company should reach a peak that ordinary people cannot imagine in the next ten years. ”

Although the company, from its founders to new employees, is extremely keen to go on vacation to Hawaii, and even has the nickname that the company is headquartered in Hawaii, it does not prevent Bill from being optimistic about the hardware manufacturing industry.

Ten years later, in the mid-90s, the vice president of the Donkey Party, Al Godot, single-handedly built the information superhighway, and after that, the information technology industry took off directly, and the market value of both software and hardware companies soared at that time.

It would have been the late nineties for Bill to sell a large stake in the company in which he had already invested, or to invest in the company of the Bossaks.

"This is also something that can't be helped, although our engineering team is very willing for you to stay in the ranks of shareholders, but the KPCB behind Henry doesn't think so, our listing must be led by them, in order to obtain the maximum benefits, there will be new moves during this time."

He took a sip of wine and said one of his guesses: "Your shares are only a few quarters of six, and after getting the eight quarters of the Garcia couple, Henry and they should be satisfied, and the follow-up financing is only for the normal expansion of the company, and there will be no special money to dilute your shares." ”

"How's the company's reputation? I do have a project that I might work with them in the future. ”

With the same sip of wine, Bill asked.

"At least it's better than Sequoia Capital, which mainly enters start-ups in the second or third rounds, and takes their shares according to normal financing, while Sequoia Capital is very happy to find engineers who need investment in laboratories and research institutes, and invests a lot of money along the way. For the founders, Sequoia Capital took a lot of shares, which is the main reason why Auguste and I chose KPCB. ”

PS: Ask for a recommendation ticket and ask for a monthly pass.

(End of chapter)