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Can someone rationalize this statement for me: > Meanwhile, Microsoft’s first venture capitalist, Dave Marquardt, grumbled that it didn’t make sense for Micros
by chollida1 11y ago
Can someone rationalize this statement for me:
> Meanwhile, Microsoft’s first venture capitalist, Dave Marquardt, grumbled that it didn’t make sense for Microsoft to keep operating as a private partnership, with Gates owning 64% and Allen holding the other 36%.
How does Microsoft have a venture captialist if Bill and Paul own the entire company? I thought this might be pre investment but then the article says:
> Before long, Ballmer and Marquardt presented Microsoft’s founders with a proposed new capital structure. Gates and Allen would keep 84% of the company. Ballmer would get about 8%, in return for canceling his profit-sharing clause. All other employees would split the final 8%.
SO they reorg so 3 people hold 92% of the company and the rest of the employees get 8% of the company. What was the venture capitalist buying here?
- bmh_ca 11y agoThere's a lot about those statements that seems imprecise. Private partnerships do not generally have equity, per se. Perhaps they meant private-corporation. A corporation can have several issuances of shares. These may be equity (ownership) or non-equity (preferred). Perhaps the VC held non-equity shares. Perhaps the grumbling was pre-investment. In any case, it could've been better written.
- GCA10 11y agoThanks for the question. The 64/36 is pre-VC-investment, and the story could have explained that better. Marquardt's venture firm, TCI bought 5% of Microsoft in 1981. Link is here: http://www.techntechie.com/early-investors-in-microsoft-you-would-love-to-know.html http://www.techntechie.com/early-investors-in-microsoft-you-... I'm thinking that the Gates/Allen stake settles post re-org at 79% once TCI is invested. That gets the percentages to add to 100% (always wise.)