Yahoo Finance Jeff Bezos Held 60 Meetings To Secure Amazon Investors But 38 Declined His Offer Of $50,000 For 1% Ownership — A Decision That Could Have Made Them Over $15 Billion Today
Taking a chance on something unknown is always intimidating. It's easy to pass up an opportunity, especially when its success seems uncertain. But what if that opportunity was Amazon?
In 1994, Jeff Bezos, a then 30-year-old hedge fund manager, was seeking funding for a revolutionary idea: an online bookshop. To realize this vision, Bezos embarked on a quest to secure investments of approximately $50,000 each from potential investors, primarily targeting family members, friends and others who might be willing to take a risk on his concept.
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Bezos's journey to raise funds for his nascent company was no small feat. He held 60 meetings, tirelessly pitching his idea to convince others of its potential. Despite his efforts, he faced numerous rejections. Out of the 60 people he approached, only 22 were convinced to invest in his idea, contributing to the $1 million he needed to start Amazon.com Inc. In total, he gave up 20% to early investors, according to a 2013 article on Geekwire.
The 22 people who leaped included Bezos's parents, Mike and Jackie Bezos, as well as his younger brother Mark and sister Christina. Bezos's parents emerged as major winners after investing $300,000 for a 6% stake in the company.
A 2016 Business Insider article highlighted that a $50,000 investment in Amazon at the early stages for a 1% stake in the company would have been worth approximately $3.5 billion that year, provided those stakes had never been diluted by later investors.
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Fast forward to 2024, and that same investment would now be valued at approximately $15.9 billion based on Amazon's January market capitalization of approximately $1.59 trillion to $1.604 trillion. This figure showcases Amazon's growth and success that potentially transformed early backers into billionaires. It’s unknown whether these investors retained their entire stakes; this estimate merely calculates the potential growth of the original investment.
Some of those who declined to invest in Amazon still find it too painful to discuss their decision, knowing they missed out on becoming billionaires. Meanwhile, others recognize that they have led fulfilling lives regardless of the missed opportunity. As Bezos reflected in an on-stage interview posted by The Guardian in 2018, "Some people are just better at rolling with the punches."
In 1994, the internet was far from mainstream, and many were skeptical about its potential. This skepticism was reflected in the reactions of potential investors. As Bezos recalled, "The first question people had, was what was the internet?" He noted that anyone with knowledge of the book business did not invest, illustrating the challenge of convincing people to invest in an unfamiliar and unproven concept.
The early investment rounds of Amazon are a prime example of the potential rewards of investing in startups. They underscore the significance of vision and the willingness to take risks in the entrepreneurial world. Bezos’s ability to recognize the possibilities of the internet and e-commerce and to convince a select group of investors to support his vision was crucial in Amazon’s journey from a tiny startup to one of the most valuable companies in the world.
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This article Jeff Bezos Held 60 Meetings To Secure Amazon Investors But 38 Declined His Offer Of $50,000 For 1% Ownership — A Decision That Could Have Made Them Over $15 Billion Today originally appeared on Benzinga.com
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