Jobs and Markkula negotiating the investment deal – Jobs (2013)

Summary

In this engaging script, Mike Markkula visits Apple Computer, intrigued by the potential he sees in Steve Jobs and Steve Wozniak's startup. After a humorous exchange and a tour of their modest operation, Markkula offers a $90,000 investment at a $300,000 valuation, with an additional $250,000 credit line at 10% interest. His conditions include incorporation to protect the founders' interests, marking a pivotal moment in Apple's early financial journey.

Takeaways

• 🤝 The script involves a meeting between Mike Markkula, Steve Jobs, and Steve Wozniak, discussing the early stages of Apple Computer.
• 🏢 Mike Markkula is introduced as a potential investor and former colleague of Don Valentine, who was contacted by Steve Jobs multiple times.
• 🍎 The Apple Computer company is described as being in its infancy, operating out of a garage and planning to launch the Apple II computer.
• 💡 Mike Markkula sees potential in Steve Jobs and the Apple Computer venture, recognizing a similar drive that he has experienced.
• 💰 The initial investment offer from Mike Markkula is $90,000, which Steve Jobs initially accepts but later suggests is insufficient.
• 📈 Mike Markkula proposes a more substantial investment package including $90,000 in cash and a $250,000 credit line with a 10% interest rate.
• 📋 The credit line is to be paid back once the company reaches a net revenue positive status.
• 🏷️ Incorporation of the company is suggested by Mike Markkula to protect the interests of the owners, Steve Jobs and Steve Wozniak.
• 🔑 Mike Markkula is invited to join the board of the company, indicating his significant role in the future of Apple Computer.
• 🍏 The script humorously notes Steve Jobs' fruitarian diet, adding a personal touch to the business discussion.
• 🎶 Background music is used throughout the script to set the tone of the conversation and highlight key moments.

Q & A

What is the context of the conversation in the script?

The conversation is about a potential investment in a startup company, presumably Apple Computer, by Mike Markkula. The discussion involves the company's current state, future plans, and the terms of the investment.

Who are the main characters in the script?

The main characters are Mike Markkula, Steve Jobs, and Steve Wozniak, who are discussing the investment in their startup.

What is the product that the company is planning to launch?

The company is planning to launch the Apple II computer.

What is the significance of the 'Manson family startup' reference?

The 'Manson family startup' is a humorous or sarcastic way to describe the chaotic or unconventional nature of the startup, possibly referring to its garage origins or the intense dedication of its founders.

What is Mike Markkula's initial investment proposal?

Mike Markkula initially proposes an investment of $90,000.

What is the valuation Mike Markkula is considering for the company?

Mike Markkula is considering a valuation of $300,000 for the company.

What additional financial terms does Mike Markkula propose?

In addition to the $90,000 investment, Mike Markkula proposes a $250,000 credit line with a 10% interest rate, to be paid back once the company reaches net revenue positive.

What is the reaction of Steve Jobs to Mike Markkula's initial investment proposal?

Steve Jobs indicates that $90,000 is not enough to meet their needs, suggesting that they require a larger investment.

What is the importance of incorporating the company as per Mike Markkula's suggestion?

Incorporating the company helps protect the interests of the owners and provides a formal legal structure for the business.

What is the role of Mike Markkula in the company after the investment?

Mike Markkula is expected to join the board of the company, indicating a more hands-on role in the company's management and strategic decisions.

What is the significance of the 'net revenue positive' mentioned in the script?

Net revenue positive refers to the point at which the company's revenue exceeds its expenses, indicating financial stability and profitability, which is a condition for repaying the credit line.

Outlines

00:00

🤝 Initial Meeting and Investment Discussion

The script opens with a conversation between Steve and Mike, who is visiting Apple Computer. Mike is surprised by the company's humble beginnings and expresses his interest in investing after a recommendation from Don Valentine. Steve and Mike discuss the company's current status, including their presence in six stores and the upcoming launch of the Apple II. Mike suggests an initial investment of $90,000, but Steve counters with a request for a $250,000 credit line at 10% interest, to be paid back once the company reaches net revenue positive. Mike also advises incorporating the company to protect the owners' interests and offers to join the board.

Keywords

💡Apple Computer

Apple Computer refers to the company founded by Steve Jobs and Steve Wozniak. In the script, it represents the startup that Mike Markkula is visiting and considering investing in. It sets the stage for the business discussion and investment negotiations.

💡Mike Markkula

Mike Markkula is a key character in the script, a potential investor and experienced businessman. His interest in Apple Computer signifies the validation and potential growth for the company. He represents a pivotal figure who can provide not just capital but also business acumen.

💡Steve Jobs

Steve Jobs is the co-founder of Apple Computer. His vision and drive are central to the narrative. His conversation with Mike Markkula highlights the entrepreneurial spirit and the challenges faced in securing investment.

💡Investment

Investment in this context refers to the financial support that Mike Markkula is considering providing to Apple Computer. The discussion about the $90,000 investment and a $250,000 credit line is crucial for understanding the financial needs and growth potential of the company.

💡Valuation

Valuation here refers to the estimated worth of Apple Computer, which is discussed as $300,000. It is a critical concept for understanding the financial negotiations between the investors and the founders, reflecting the perceived value of the company.

💡Credit Line

A credit line is a flexible loan from a financial institution. In the script, Mike Markkula proposes a $250,000 credit line with 10% interest. This term illustrates the financial strategy and risk management involved in funding a startup.

💡Incorporate

To incorporate means to form a legal corporation. Markkula advises Jobs and Wozniak to incorporate to protect their interests, which is an essential step in formalizing and structuring the business for growth and investment.

💡Risk

Risk refers to the potential for loss or failure. Markkula acknowledges the risk involved in investing in a startup but also sees the promise. This concept underscores the uncertainty and potential reward in venture capital investments.

💡Net Revenue Positive

Net revenue positive means that the company is making more money than it is spending. Markkula’s condition for the credit line repayment ties the investment to the company's financial performance, emphasizing the importance of profitability.

💡Board

The board refers to the board of directors, a group of individuals elected to represent shareholders. Markkula’s offer to join the board signifies his commitment and the strategic guidance he can provide, highlighting the importance of governance in the company’s development.

Highlights

Introduction of Apple Computer and Mike Markkula's interest in the company

Steve Jobs' persistence in contacting Don Valentine, leading to Mike's visit

Mike Markkula's background as a former CEO and his potential role at Apple

The current state of Apple with six stores and upcoming product launches

Discussion of Steve Jobs' dietary habits as a fruitarian

Mike's skepticism about the initial investment proposal

Steve's lack of business experience and Mike's willingness to take a risk

Mike's recognition of Steve's passion and potential for success

Proposed initial investment of $90,000 and its inadequacy for Apple's needs

Mike's counteroffer of a $90,000 investment with a $250,000 credit line

The terms of the credit line including 10% interest and repayment conditions

Importance of incorporating Apple to protect the founders' interests

Mike's offer to join the board and his acceptance by Steve and Bill

The closing of the deal and the beginning of a partnership between Mike and Apple

The significance of this meeting in shaping Apple's future and its growth

The role of personal connections and networking in business development

The importance of recognizing and investing in potential and passion

Transcripts

is uh is this the right Apple Computer

yeah yeah are you expecting something

else no well yeah maybe something a

little less Manson family startup I'm

Mike Markkula Steve chops Steve

heard a lot about that you spoke to Don

Valentine and he and I are old

colleagues of sorts of be CEO from the

target yeah Valentine he said you called

him 150 times Jesus yeah he practically

begged me to come and look at your

outfit here called in a personal favor

well mark Mike Mike

welcome to the helpful computer thank

you yeah is this this is everything

yes no no we're in six stores in the

greater area we'll be launching the

Apple two and a bottom one in a few

months it's close gentlemen is there

someplace we can talk

[Music]

nor fellas you Steve's a fruitarian

fruit okay boys I'll just I'll leave you

to your business right well thanks mrs.

J is best yeah so where were we

I'm sorry don't take this the wrong way

but what's your angle mmm well my

colleagues trying to say is where was

your last employment into so how much we

talking about here the investment that's

what you came here for for a place not

Steve strong suit

isn't it yeah well I've been looking for

something to really sink my teeth into

look Steve I'm willing to take the risk

and this certainly qualifies but risk

disguises promise and you've shown

promise I've seen it in your eye and I

know that look because I've had it

myself

tells me you're onto something big

[Music]

yeah okay to the point I think we should

start with around 90 grand see where

that takes us

okay I'm sorry could you repeat that I'm

sorry

[Music]

$90,000 isn't gonna get it done oh well

wait Stephen one sec I don't see anybody

else coming in her garage or the

checkbook oh no no no idea grant gets it

done for us I just don't think he gets

it done for you will do the $90,000

investment at a $300,000 valuation but I

also want you to kick in a $250,000

credit line with 10% interest to be paid

back in full

once we meet net revenue positive

[Music]

okay

[Music]

what I mean is okay yeah

now the first thing you need to do is

incorporate so that you two as owners

can protect your interests and that is

of course if you'll have me board thank

you very much miss mark haha of course

Mike yeah yeah put her there bill bill

right Fernando says oh that's Mike Steve

yours too you down

[Music]

[Music]