Interlude - Index of

34 | Beginnings
In July 1993, we shipped our first real systems—ones that
customers paid for—and in September we finally raised our
first round of venture capital. The VCs probably still didn’t
understand our technology, our market, or our business plan,
but we made something that someone would pay for, and that
they understood perfectly. Two prominent VC firms teamed
up and gave us money to grow. Of course, VCs don’t actually
give you the money: you have to sell them a part of your
company. When NetApp began, Mike, James, and I together
owned 100 percent of the stock. After the angel investments,
we were down to 75 percent ownership, still a majority. The
first VC round took our share down to 43 percent. The Board
of Directors consisted of the VCs and some of the angels, and
since they now owned more than half the company, they had
ultimate control. VC funding can be a bittersweet experience.
••
Our system turned out to be much more competitive for highend
environments than we expected. One way to test performance
is to count how many requests a system can process in
a second (technically known as throughput). This is what our
competitors focused on, and by this measure, large Sun and
Auspex systems were maybe five times better than ours. This
wasn’t a problem because, as I said, we were targeting the low
end of the market. But another way to measure performance
is to look at how fast a system can process one request (technically
known as response time). If you think in terms of cars,
it’s like the difference between a school bus and a Ferrari. To
deliver lots of children, a school bus is better. But to get one