When most people think of Jeff Bezos, they think of Amazon.com Inc. and its origin story: starting in a garage with a loan from his parents.
But there’s another, lesser-known part of Bezos’s journey. Before Amazon took off, Bezos made a smart investment that could have made him a billionaire outside of Amazon.
In 1998, four years after launching Amazon, Bezos invested in a small search engine startup operating out of a garage in Menlo Park, California. This startup, nurtured by the genius of Larry Page and Sergey Brin, two Stanford Ph.D. students, was Google.
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Bezos’s investment was not just a financial gamble; it was a bet on vision and innovation. He contributed $250,000 to Google during a $1 million follow-on investment round. The decision was driven not by comprehensive business plans or projections but by an instinctive belief in the people behind the venture. In an interview with Ken Auletta, author of the book "Googled: The End of the World as We Know It," Bezos said, "I just fell in love with Larry and Sergey." His investment choice reflected a deep resonance with their customer-focused viewpoint, a philosophy he championed at Amazon.
His investment decision encapsulated three key principles. First, Bezos embraced long-term thinking. Despite Google’s meteoric rise, it took six years from his investment for any liquidity event. This underscores the often-overlooked patience required in venture investments.
Second, Bezos’s timing was impeccable. He got in early at a price that, after adjusting for stock splits, amounted to 8 cents per share.
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Finally, he invested in people, choosing Google despite the existence of more established competitors like Yahoo! and Alta Vista. This decision was not just about the potential of a business model but about trusting in the capabilities and vision of Page and Brin.
When Google went public in 2004, the $250,000 investment translated into 3.3 million shares of Google stock worth over $280 million at the time of the initial public offering (IPO). If Bezos had held onto these shares, given the current price of Google stock, they would represent an investment worth over $1.5 billion. It’s been reported that Bezos no longer holds this stake. If he had retained it, the value would have been around $4.8 billion, a gain of nearly 20,000% in just over two decades.
Bezos’s investment in Google, along with his Amazon venture, shows the impact of backing startups early on. Today, platforms like StartEngine allow everyone to tap into this potential. Investing in startups is more than a financial decision; it’s a gateway to being part of innovative ideas that could shape the future. Imagine discovering the next Amazon or Google. This makes startup investing an exciting opportunity for anyone eager to contribute to and grow with emerging leaders in technology and business.
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