Pinterest

$4-5M of founder money and 9 months on a dead Pinterest clone before the pivot

Furqan recounts AppLovin's three founders putting in ~$4-5M of their own money, which bought years of runway. Their first project, Style Page, was a Pinterest-style fashion site they killed after 9 months because, as he put it, they were five guys in Palo Alto with no fashion sense.

“But them three put in the initial funding. I think it was like around $4 or $5 million, if I remember correctly. But it was a lot in the sense that it gave us many years of runway to work on whatever We started with one project called Style Page. We did that for like 9 months. That was kind of like Pinterest. We really quickly realized we're like, you know, 5 dudes in like Palo Alto with no fashion sense trying to build a fashion website. This is not going to work very well.”

Pinterest and Stripe extended option exercise windows to 6-7 years

Most startups give departing employees only a 90-day window to buy their vested options or forfeit them — and many can't come up with the cash. Sam notes Pinterest and others extended their exercise windows to 6 or 7 years so employees don't lose earned shares.

“Some companies are being cool about it. Pinterest, uh, couple others, I don't remember, maybe Stripe. They increase their exercise window to 7 years or 6 years. That's crazy. So they're like, look, that's cool. We know this practice is a little bit crazy. It's hard to come up with that cash, and you worked here, you earned your shares, so we're not going to try to take those back.”

Belsky's first-ever angel check was Pinterest, met Ben through an intern

While still running Behance with no business angel investing, Belsky met Pinterest's Ben Silbermann in 2010 through his intern. Pinterest pins were driving growing traffic to Behance, which tipped him off to the opportunity.

“my first ever investment was Pinterest. So I met Ben Silverman back in 2010, and I had no business being an angel investor. I was just leading my own company.”

Treat a risky angel check as paying for an education

Belsky rationalized his first Pinterest investment, a good chunk of his salary, by reframing it as tuition: he'd learn from Ben's Google and West Coast network. Worst case, it was his education.

“Ben had worked at Google. He had a network on the West Coast. I was just like, you know, new entrepreneur in New York that didn't have any of that network. I actually felt like I would learn a lot from this. And so in some ways I was like, you know, I'm sort of paying for an education.”

Steal thisJustify a high-risk early investment as tuition; the relationship and learning are the floor on your return.

Behance sold for ~$150M, mostly bootstrapped

Scott Belsky built Behance through 5 years of bootstrapping (funded by selling notebooks and speaking at conferences), raised only $6-7M right before exit, and sold to Adobe for about $150 million.

“He sold that company for about $150 million, and when he sold it, it was mostly bootstrapped. He eventually, uh, raised a little bit of money, like $6 or $7 million, but they raised that money like right before they sold. So, they had built most of the business without funding. And he funded the company by selling notebooks and speaking at conferences.”

Treat angel checks as paid education

Belsky rationalized his first risky Pinterest check (a big chunk of his salary) as buying an education from Ben Silbermann, who had the West Coast network he lacked. His takeaway: when you deeply respect someone you can learn from, find a way to work with them.

“And, you know, the one or the other thing I did though to rationalize it for myself, I remember is Ben had worked at Google. He had a network on the West Coast. I was just like, you know, new entrepreneur in New York. Didn't have any of that network. I actually felt like I would learn a lot from this. And so in some ways I was like, you know, I'm sort of paying for an education.”

Steal thisJustify an early angel check by the education and relationship, not the return — then the worst case is you learned something.