Return to the Little Kingdom_ Steve Jobs and the Creation of Apple - Michael Moritz [114]
The investment of Don Valentine, the venture capitalist who first allied Markkula with Apple, was partially a result of coincidence. When Valentine spotted Markkula, Jobs, and Hank Smith dining together one evening at Monterey’s Chez Felice Restaurant, he sensed what was being discussed. He dispatched a bottle of wine to the trio with a note reading “Don’t lose sight of the fact that I’m planning on investing in Apple.”
When the financing was eventually completed in Janaury 1978, and all the papers signed and notarized and share certificates swapped, Apple was valued at $3 million. The financing brought Apple $517,500 of which Venrock invested $288,000, Valentine, $150,000 Arthur Rock, $57,600. In return Markkula and Scott asked for an informal agreement from their investors that their financial commitments last at least five years.
Within six months word of Apple had begun to seep out and when Michael Scott and the others appeared at the Consumer Electronics show in the summer of 1978, they were buttonholed by investors from Chicago’s Continental Illinois Bank who wanted to invest $500,000 in Apple. The price of the shares was about three times what it had been six months earlier. The Venrock partners grumbled about the increase in the price of the stock but eventually made an additional investment and wound up owning 7.9 percent of the company while Valentine complained the price was far too steep and refused to add to his original stake.
Some months after the initial financing Scott took another call but this time from a close friend of Rock’s, Henry Singleton, chairman of Teledyne Inc., one of the companies that had helped make conglomerate a fashionable word during the sixties. Rock had helped start Teledyne and served on the company’s six-member board of directors. Scott was astonished that the chairman of a two-billion-dollar company which sold life insurance, made tank engines, shower massages, oil drilling equipment, and an ill-starred electronic device for measuring a dieter’s bites was calling Apple Computer to find out about the internal quirks of the Apple II.
Like Rock, Singleton had not gained a reputation for sentimentality. He was reputed to manage Teledyne’s subsidiaries as if they were items in his personal stock portfolio, was said to have a head for detail, a devotion to cash, and no problem with ordering summary closures. Scott patiently answered Singleton’s questions and later asked Rock whether he thought that his investment partner would be interested in becoming an Apple director. Rock thought it impossible, saying that Singleton served on only one other board and was trying to rid himself of that obligation. He told Scott, “If I ask, the answer will only be no.”
Scott persisted and when Apple announced its disk drive he arranged to hand deliver one at Singleton’s Century City office. He found that Singleton not only had an Apple in his office but also had one at home and was busy programming in assembly language. The appointment turned from half an hour into the whole day, with a lunch at the Beverly Hills Country Club where Singleton impressed Scott by paying in cash rather than resorting to credit cards. When Rock discovered that Scott had been invited to Singleton’s home, he knew the knot was tied: “You’ve got him nailed.” Singleton bought $100,800 worth of Apple stock and in October 1978 became a director.
As Venrock, Arthur Rock, and Henry Singleton were recruited, Markkula showed that he wasn’t squeamish about selling parts of the company to properly qualified people. Unlike