Personal Wealth | Bill Harris
Take the money
Just take it. Put it to good use.
You won’t regret it
The legendary Bill Campbell was my boss at
Intuit. He was also confessor to Steve Jobs and
on Apple’s board, consigliere at Google, and
mentor to countless tech leaders. Bill got his
start as a college football coach and is still
known throughout Silicon Valley as the
Coach. He’s a man of few words—often of the
colorful, locker-room variety—but intense
loyalty to his teams.
He was on the board of one of Marc
He Who Hesitates... Here comes that funding. There goes that funding.
Our growth was so hot that investors lined up around
the world. We were oversubscribed and turning money away.
One group from Korea, having been told we could not
accept its investment, simply wired $5 million into our bank
account. Scared the hell out of me, and we wired it back
Andreessen’s companies when the board members were
considering taking money from a new investor. The debate
raged on: Was the valuation high enough? Would the deal
dilute the founders’ ownership stake and control too much?
Finally, someone asked Bill’s opinion, and he looked up and
said (roughly translated), “Take the friggin’ money.”
We closed on the $125 million in March 2000—the very
month the Internet bubble burst. It seemed as if PayPal was the
last company to get money. Investors ran for the hills, and
nothing much got financed for the next 18 months.
Take the money. This is the best advice I’ve received in
my 20 years in Silicon Valley. If you’re starting a tech firm,
you’ll always need money—and you’ll always need more of
it than you think you will. Money is not always available.
PayPal eventually turned quite profitable, but the investment necessary to get to scale was huge. March 2000 may have
been the only time in history that you could have funded such
a wildly ambitious attempt to build a new payment system.
So when it is, take it.
I’ve worked on small start-ups, where nobody takes a salary
and you spend the bulk of your limited time trying to raise a
couple hundred thousand from angels. This is time that ought
to be spent building products. So when you stumble upon an
investor who believes in your idea, don’t let him rest until he’s
signed the term sheet.
I’ve also been on the boards of companies needing
money for a restart. In the late 1990s, Jake Winebaum started
Business.com and Purnendu Ojha started Nex Tag, only to
have their businesses collapse when the Internet bubble burst.
But each founder held on, slashed head count, and fought for
a lifeline of funding.
I’ve also seen high-stakes financings where the numbers
are outrageous. We launched PayPal in 1999 and signed up
one million customers in the first six months. Our growth
was eye popping, but so were our losses. We were losing $10
million…a month! We had already raised tens of millions of
dollars but needed a lot more.
We were mostly a bunch of kids just out of school—I was
the old man—working in a loft office over a bakery in Palo
Alto. We had no revenue and were hemorrhaging cash. But it
was 2000, and my colleagues, Elon Musk and Peter Thiel, were
fearless. We decided to go raise $125 million.
The terms were draconian: The investors demanded very
large equity stakes—a move that diluted the founders’ equity
down to small minority stakes—in return for the cash necessary to keep the companies afloat. But Jake and Purnendu
each took the money, then built great businesses—one worth
half a billion and the other a billion dollars about seven years
later. The companies did well, the founders did well, and
none of it would have been possible without the cash to
bridge these ventures through the lean years. Survival is
perhaps the best and only reason to give away big chunks of
What did I learn from Bill, Elon, Peter, Jake, and Purnendu?
Take the friggin’ money.
FROM LEFT: COURTES Y SUBJECT; iS TOCK
Bill Harris, formerly the CEO of Intuit and PayPal, is the founder and CEO
of the wealth-management company Personal Capital.