The potential pitfalls and mistakes that can occur when valuing a company, particularly in the context of raising capital.
The potential pitfalls and mistakes that can occur when valuing a company, particularly in the context of raising capital. It emphasizes the significant financial implications of inaccurate valuations.
You made him a 10% owner initially, and you were 45, Steve was 45, and 12 days later Ron comes back, and he sells off his 10% saying, "I want to sell it back to you for $800." What happened with Ron Wayne? What was that story about? >> What happened was we got this order out of thin air to build computer boards with with parts on them and sell them for 500 each. A $50,000 order, and like I said, my salary $25,000. This was scary stuff cuz now we're in big business, and I don't want to make Hewlett-Packard think I'm you know, doing something behind their backs. Well, what happened was we get the parts on 30 days credit, build them in 10 days as I said, deliver them to the store. And Ron Wayne figured out that what if something goes bad and we don't get paid? Then who owes the money on the parts? Well, it turns out that Steve Jobs had zero bank account. You know, zero I had zero bank
account. No savings account, no nothing. None of us had any wealthy friends. So, Ron Wayne, all of his money would be at stake. So, he was taking 100% of the financial risk for 10% of the company, and it was too flaky, and he and he sold out. He you know, he didn't have a vision that was a big picture, but it was so early with just the Apple I. It was hard to see where Apple would go. The Apple II really changed the story, and that came about 3 months later.