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How Google got its first funding

May 25, 2009


This excerpt has been taken from the book “The Google Story” written by David A Vise. It is an excellent book and I recommend that everyone read it.

On a sunny California morning in late August 1998, Larry Page and Sergey Brin (Founders of Google) sat on the front porch of a Palo Alto house eagerly awaiting the arrival of a Silicon Valley angel (Investor). One of their graduate school professors, David Cheriton, suggested that it would be a good idea for them to meet his friend Andy Bechtolsheim, a computer whiz and legendary investor in a string of successful start-ups.

Cheriton had piqued Bechtolsheim’s interest in Brin and Page by telling him that the students had a “great idea” to show him: they had invented a better way to find revelant information fast on the internet. He seemed interested. He wanted to know more. How far could the guys run with the idea? Page confidently told Bechtolsheim that they could download, index, and rapidly search the entire internet using a network of low cost computers. The only problem was that they didn’t have the money to buy the machines.

After Brin and Page displayed the demo and chatted with him, Bechtolsheim appreciated and understood the breakthroughs that enabled Google to produce superior search results. He also admired something else about Brin and Page. Instead of wasting lots of money on advertising or high-end equipment, they wanted to buy motherboards and other components to inexpensively build computers themselves. They also wanted to develop a fully searchable database before going out to talk to venture capital firms about possible funding. And they wanted to let their search engine speak for itself. Satisfied that he had seen and understood a demonstration of a better technology that had the potential to address a real problem, Bechtolsheim wasted no time asking about the bottom line.

“The key question about any internet start up is, ‘how are you going to make money’ he said. I never get sucked into deals with no economic merit”. He reviewed the various possibilities: build an audience of computer users by giving away the Google search engine for free, and then profit from ads or by selling something. They also talked with Bechtolsheim about licensing search technology to companies that would pay to use it. And there was always the possibility that a large company might buy the technology and include it in its mix of products.

“This is the single best idea I have heard in years”, Bechtolsheim said. “I want to be part of this”. He proposed immediately writing a cheque so they could build their computers and he could be on his way to his next appointment. No negotiations. No discussions of stock or valuation. Bechtolsheim didn’t even know that Brin and Page had not formally created a company. But details like that didn’t bother him. Instead of discussing all the details, Brin recalled, Bechtolsheim wrote a cheque made out to “Google Inc” for $100,000, a figure he picked because it was a nice, round number.

Page put the cheque in his desk drawer for safe keeping, where it remained for two weeks until the pair incorporated Google and opened the first bank account in the newly established company’s name, so they had somewhere to deposit it.

What do you think of that? Of course, considering the attention span of the internet readers, I have not included some more content and analysis that came in between in the book, to keep it short.

Destination Infinity

You could visit the ‘Non-Fiction’ section of this blog for reading similar articles.

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14 comments

  1. And look how far they’ve come!


    • They are a 100 billion dollar company today it seems. They are the biggest. All this with out ‘selling’ anything!

      Destination Infinity


  2. I am getting the book right away 🙂

    Ha watch out soon another one such is going to hit the world in a slightly different sort of thing(keeping my fingers crossed 😉 )


    • Already decided the details as well? You are fast, in every sense of the word!

      Destination Infinity


  3. They have done a miracle i can say… 🙂 and i have checked your new site on IP.. its really cool… will read and post more comments by weekends 🙂


    • That site is going to get more technical by the day! Thanks for your interest.

      Destination Infinity


  4. I will definitely buy the book. Its in my line of sight.
    And well, about the excerpt, that is how history is made.


    • I had this book for about two and half years now! Only now I was able to read it…. its intriguing to think that history can be made like this!

      Destination Infinity


  5. I’ll check it out. I’m fascinated by google. I mean, my god, it has become a verb. What a phenomenon. Thanks for bringing the book to my attention!


    • Here, which ever book store I went had this book. Hence on one such visit I bought this book. I have this habit of buying books and not reading them! At least one book I have completed!

      Destination Infinity


  6. Many a stories of start ups would be similar and really inspiring.


    • I am reading such books now! Next on the line is Iwoz – Apple Computers and Steve Jobs. I had bought one more book on GE but that is missing! Now you can guess how many books I have bought and not read! Hope to read more books during this current period.

      Destination Infinity


  7. Thanks for sharing this DI..
    I am intrigued and will pick up the book for sure..

    its amazing to read about how great success stories started


    • Yeah, I am intrigued too… I am reading more of non-fiction stuff like that, of late. One more section that interests me is history.

      Destination Infinity



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