Interlude - Index of

30 | Beginnings
a good idea, someone else would have already done it. At the time,
it reminded me of the joke about the economist who sees a
$20 bill on the ground but refuses to stoop down and pick it
up. “If it were really there,” he says, “someone else would have
already grabbed it.”
After the meeting, though, this question really made me
think. What had changed? I saw several enabling factors:
There was an emerging market, because network storage was
becoming popular. It would be easier for a newcomer to gain
legitimacy, because a new industry standard performance test
allowed customers to compare systems from different vendors.
And we could build a surprisingly inexpensive system, because
desktop PC hardware was becoming fast enough to power
a storage system like ours. I can’t prove enabling change is
always a factor, but finding it adds credibility to your story.
Meanwhile, our progress and our frugality impressed the
angels, which was good because without the usual VC funding,
we needed their money. Even more, we needed their friends.
You see, when we couldn’t get VC money, our original angels
had a tough decision. They could either watch their investment
swirl down the drain, or they could help us raise more
money themselves. By the time we shipped product, we had
raised almost $1.5 million from twenty-four angels. This was
unheard-of at the time.
In a sense, you could say that the early angels got a bum
deal. Instead of the one-time investment they expected, we
kept asking them for more money and for introductions to
more friends. I don’t feel too sorry for them, however. When
our stock price hit its peak, near the end of the dot-com boom,
a $50,000 angel investment was worth $107 million.