Redeye VC

Josh Kopelman

Managing Director of First Round Capital.

espite being coastally challenged (currently living in Philadelphia), Josh has been an active entrepreneur and investor in the Internet industry since its commercialization. In 1992, while he was a student at the Wharton School of the University of Pennsylvania, Josh co-founded Infonautics Corporation – an Internet information company. In 1996, Infonautics went public on the NASDAQ stock exchange.

Read more or visit First Round Capital

Monthly Archives for 2010

View the older monthly archives »

Woulda Coulda Shoulda

Add this one to my woulda coulda shoulda list...

-----Original Message-----

From: Chad Hurley [removed@youtube.com]
Sent: Monday, August 15, 2005 12:09 PM
To: Josh Kopelman [removed@firstround.com]
Subject: Re: Great news!

Hi Josh,

Yes, it was great talking with you last week. We definitely would
like to have you on board with YouTube. Right now, we are just
exploring our options and I will let you know before we move forward
with any of them.

Chad

Comments

Louis Gray

That's all part of being a risk-taker. Sometimes you take risks and they work out, and other times, you pass, and you wish you hadn't. It's very similar to the feelings in buyer's and seller's remorse. For every job I've been offered where the company's looking to go public, there have been others where the company had imploded shortly afterward.

I had a roommate with a chance to be one of the first 20 employees at Google. He instead chose to finish his Ph.D., and is now working as a professor at NYU. Similarly, I have dozens of former colleagues who have changed jobs two or three times since bailing on the company years ago when they became skittish.

Missing out on YouTube millions is a tough one to turn your back on, but so long as you're happy doing what you're doing, and excited about the next big thing that may come along, it's all part of the race. Maybe this experience will make you choose differently the next time around.

Eric Jackson

Thanks for sharing. Even Masters-of-the-Universe VCs make mistakes, just like the rest of us.

Jennifer Cooper

Not to worry, as we(enterpreneurs) and you (VC's) know for every idea that gets bought or goes IPO, there are many others that are waiting in the wings to make their mark. I am personally very encouraged and see this as an opportunity to be more vigillant and push the envelope of innovation even harder. Perhaps my next idea will not be a "woulda, coulda, shoulda" for those I ask for funding, specifially because of the trail YouTube blazed. I think this is a GREAT time start a company.

Robert Young

Josh,

Out of curiosity... why did you take a pass on the deal?

anon

Uh...yeah.


On May 29, 2005, at 11:47 PM, Steve Chen wrote:


yo!

how long are you going to be at paypal! say, how are your contacts in the valley? i'm working on like 4 different projects -- they're all interesting ideas but they really need a marketing/business guy to make it happen.

-s

nalts

If it makes you feel better I once interviewed for a guy that was investigating a "secret" new business that turned out to be half.com and was sold to Amazon.com for some obscene amount.

BTW- anyone in their right mind would have told you not to invest in YouTube. It's not sustainable. Those kids are extremely fortunate, and Google will be selling YouTube in 2008 for $300 million. It will be noted as the Snapple of web 2.0 (Quaker bought Snapple for almost the same price tag as YouTube).

Anonymous

Josh,

Wow, I feel for you :)

Who passed? Youtube or you?

Thanks for sharing the note. It is this kind of post that add charm to blogs.

Adam Jusko

You seem to have had enough hits that one miss isn't going to kill you.

Michael Aronson

I thought many of you might be interested with a Sequoia partner comments on the deal
--------------------

Sequoia Capital Israel's Shmil Levy: IPO was not an option.
Doron Avigad 11 Oct 06 17:27
It is possible, and maybe even desirable, to argue whether the price Google Inc. (Nasdaq:GOOG) paid for YouTube was cheap, exorbitant, or fair; and whether the timing was premature, belated, or just right. On one point, at least, there is no dispute: there is one big winner in this deal, and it answers to the name of Sequoia Capital of the US.
Sequoia invested just $11.5 million in YouTube in two financing rounds; peanuts for a fund of this size. Following the sale of the company to Google for $1.65 billion in shares, Sequoia can expect to make a fantastic return on its investment of up to $600 million.

Sequoia Capital Israel partner Shmil Levy tries to explain YouTube’s phenomenal success.

“Globes”: Until just a year ago, Yahoo! was the unchallenged leader in Internet video, with an 85% market share. A year later, YouTube has 46%, Google Video 11%, and Yahoo! Video less than 6%. How do you explain this reversal of fortune?

Levy: “This was truly a rapid change, and it can be attributed to YouTube’s different and correct attitude towards surfers. It simply allowed every user to upload video files onto the website, added user ratings and created an environment that made users want to return again and again. YouTube created an Internet community.”

It seems that just about everybody can do this. It’s possible to begin from zero.

“That’s true, and it’s the greatness of the Internet. If you do something nice, you don’t have to big like Yahoo!. You have a chance. This is basically our message to Israeli entrepreneurs. We’re saying: There is here, in Israel, the potential for the next YouTube. It may not be in video, which is already occupied, but there are other fields, fields we haven’t yet thought of. We know that this potential exists here.”

Sequoia is also invested in Google, which made an exit through an IPO on Nasdaq and is now traded at a market cap in excess of $130 billion. Was a sale the right thing for YouTube?

“YouTube had no chance of an IPO now, but only in another year. Besides, we decided not to wait because we understood that we didn’t have another Google in the hand. Nevertheless, to sell for $1.6 billion is a great thing. The last time an Internet company was sold for over $1 billion was in 2001. YouTube’s entrepreneurs received quite a few acquisition offers in recent months, and I’m glad they waited. This is also a message for start-ups: sometimes it’s better to wait and not sell at the first or second offer.”

Did the fact that Sequoia invested in both YouTube and Google facilitate the negotiations between the two companies, which lasted only a week?

“It definitely didn’t hurt. But most of Sequoia’s help for YouTube was advice and support, mainly by people with rich Internet experience, such as Sequoia Capital partner Michael Moritz, who was involved in founding Yahoo! and other companies.”

Did you insist on being the only investor in YouTube?

“Fortunately for us, there was no need to insist. We put down money right at the start, and the company subsequently already knew where it was going, and refrained from bringing in additional investors. That’s another advantage of Internet companies: they don’t need a lot of money to function, while on the other hand they build a user base of hundreds of millions of users.”

Levy was present at the meeting at which Sequoia decided to make its first investment of $3.5 million in YouTube. “Two young and brilliant entrepreneurs came to us. We already knew them from Pay-Pal (an online payment service provider where YouTube’s founders Chad Harley and Steve Chen worked - D.A.). There were actually a lot of opinions around the table; not everyone thought we should go for this.”

Why the hesitation?

“The entrepreneurs came to us with an unproven model, but we were impressed that they were both Internet mavens, and that they had a winning approach and an understanding that surfers must be involved in the process of creating the content that they consume. They talked about cooperation and community, and persuaded us to put down a little money. As for their personalities, we felt that they could build a venture of this size.”

How did Sequoia celebrate the sale yesterday?

“We don’t celebrate, we just run to the next investment.”

Dave

i had a few conversations with jawed while we were still at paypal on a previous project he was working on. later after i left, he sent me an email about YT in april '06.

i was working furiously to help launch Simply Hired at the time, and my wife was just about to deliver our first child. i looked at the site briefly and thought 'hmm. tags. ratings. easy video publishing... not bad'. then i went back to work.

oops.

ah well, kudos to those guys for knocking the ball out of the park. they did a great job.

and for the rest of us who didn't wake up rich this morning... back to work ;)

chanel

Its interesting reading what the VC community discuss about the online communities. I think this recent move from FB shows that the original developers are still involved.

hermes bags

Thanks for sharing. Even Masters-of-the-Universe VCs make mistakes, just like the rest of us.

armil at proofreading and editing

Allow me to add: wouldn't, couldn't, shouldn't.

Maybe also: would've, could've, should've.

Post a comment

Comments are moderated, and will not appear on this weblog until the author has approved them.

This weblog only allows comments from registered users. To comment, please Sign In.