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Editor’s Note: Most investors know Google became one of the greatest investments in history. Fewer know how many smart people had the chance to invest early — and passed.
Today, I’ve asked my colleague Luke Lango to share that story.
But instead of second-guessing famous venture capitalists, he’s interested in a more useful question: Why did some experienced investors walk away from Google while others recognized its potential?
Luke believes the answer still matters today. Below, he breaks down the simple framework he uses to evaluate young companies before they become household names. Then, if you’d like to see that process applied to a real private AI opportunity, you can .
Take it away, Luke…
Every great investor has a list they would rather nobody ever saw.
Not their biggest winners, of course. They’re happy to brag about those.
It’s the list of their biggest misses.
Companies they looked at… considered… sometimes even met with… and decided to pass on.
For most investors, those missed opportunities disappear into history.
But some venture capital firms do something you wouldn’t expect.
They publish them.
Bessemer Venture Partners calls it its “Anti-Portfolio”—a running list of billion-dollar companies it had the chance to invest in but didn’t. Apple. Tesla. Airbnb. PayPal. Google.
One of those misses came after partner David Cowan refused to visit a garage where two Stanford students wanted to show him a new search engine.
Those students were Larry Page and Sergey Brin. The search engine was Google.
What did the investors who said “yes” see that everyone else missed? That’s what I want to explore today.
Because the same clues that convinced a handful of investors to back Google before almost anyone had heard of it can still help us evaluate young companies today. And they’re the same three questions I ask before I ever recommend a private investment.
Cowan wasn’t alone. Another company looked at Google, studied its technology, negotiated a purchase price… and still decided to pass.
Why Excite Walked Away From Google
In 1999, Excite was one of the internet’s leading search and web-portal companies. According to venture capitalist Vinod Khosla, Larry Page and Sergey Brin were willing to sell Google to Excite for about $1 million. Khosla even helped negotiate the price down to roughly $750,000.
Still, Excite passed.
Former Excite CEO George Bell later explained why. Google wanted Excite to replace its existing search engine with Google’s technology. After testing it, Excite decided the improvement wasn’t dramatic enough to justify ripping out years of engineering work.
Whether that was the only reason is still debated. Some observers have argued Google’s search results were actually too good, sending users quickly to other websites when Excite’s business depended on keeping people on its own pages.
Either way, the lesson is the same. Excite evaluated Google based on the business it already had, but Page and Brin were trying to build the business the internet was about to need.
That’s an easy distinction to see today, but it wasn’t anything close to clear in 1999.
Fortunately for the two founders, not everyone viewed Google through the same lens.
In August 1998, Sun Microsystems co-founder Andy Bechtolsheim wrote them a $100,000 check before Google had even been formally incorporated. That investment helped move them from their Stanford dorm rooms into the very garage David Cowan was trying to avoid.
The following year, Sequoia Capital and Kleiner Perkins invested another $25 million.
According to Kleiner Perkins, Page and Brin showed up to their pitch meeting with a 17-page presentation containing only two pages of financial projections. Google didn’t have a proven business model. It didn’t even have a complete management team.
But it had something the investors believed mattered more:
- Great founders.
- A product people overwhelmingly preferred.
- And demand that was growing faster than almost anyone appreciated.
Google’s search traffic was reportedly increasing about 50% every month through word of mouth alone. Stanford’s own computer network struggled to keep up.
Looking back, the investors who backed Google saw three things they believed mattered most: the people building the company, the product they had created, and the timing of the opportunity.
Today, I call that framework People, Product, and Timing—or PPT.
It’s the same approach I use whenever I evaluate a private company, and Google remains one of the clearest examples of why those three questions matter.
Why This Matters Today
Google’s earliest investors had very little to work with.
There was no established business model. Very little financial history. No Wall Street analyst reports. No quarterly earnings calls.
They had to make a judgment based on the founders, the product, and where they believed the market was heading.
That’s still the job.
Today, more private companies are raising money from everyday investors than at any point in modern history. That creates opportunities previous generations simply didn’t have. But it also requires a thoughtful way to separate the handful of exceptional businesses from the thousands that never find their footing.
That’s why I built the People, Product, Timing framework.
It’s the process I use before I recommend any private investment, and it’s the same process I recently applied to one AI company during my .
In that presentation, I explain who built the company, what it has created, why I believe the timing is attractive, how the investment works, and the risks every prospective investor should understand before making a decision.
If you’ve ever wondered how professional venture capitalists evaluate young companies years before they reach the stock market, I think you’ll find the presentation worthwhile.
I hope you’ll join me.
Sincerely,
Luke Lango
Senior Investment Analyst, InvestorPlace
P.S. One of the reasons I enjoy reading Luke’s work is that he rarely asks readers to accept a conclusion without seeing the reasoning behind it. During , he walks through his People, Product, Timing framework step by step and applies it to a real private AI company. Whether you ultimately invest or not, you’ll come away with a better understanding of how experienced venture investors think about opportunities long before a company has a ticker symbol.
