>To me the lesson of Google is early profitability gives you immense leverage with VCs. But Google didn't have profits in June 1999. They were hoping for VCs

>To me the lesson of Google is early profitability gives you immense leverage with VCs. But Google didn't have profits in June 1999. They were hoping for VCs Mike Moritz @ Sequoia and John Doerr @ KPCB to bring them revenue because those 2 partners were on the boards of AOL and Yahoo. They wanted to try and sell their tech to those companies. (They eventually did do deals with both of them.) Later interviews with angel Ron Conway and Sequoia said Larry's slidedeck for investment didn't have a revenue plan. The "leverage" that Larry & Sergei had was that their search engine worked better than competitors such as AltaVista and Yahoo. EDIT reply to: >But it's on record that Google had $220,000 in revenue in 1999. But did they have that revenue before June 1999? Maybe everybody's memory is fuzzy but in the books and recollections from interviews of that time period, Google didn't have meaningful revenue so it wasn't a point of leverage. But another leverage they had besides the best-in-class search engine was that angel Ron Conway was willing to quickly assemble a consortium of investors in a few days to bypass Sequoia & KPCB. It was that threat of VCs losing the the deal was what finally got them to pull the trigger. Until then, those 2 VCs were sitting on their hands for weeks. Google's 1999 revenue was never brought up as leverage. Do you have insider information that contradicts that? >Revenue and early profitability is good thing for founders but not VCs. 100% agree about the principle in general -- but I don't think Google situation in 1999 is a case study of that.