In its latest financing round, AirBnB was valued at $25.2 billion. Seven years ago, you could have bought 10 percent of it for $150,000 -- the price of a studio apartment in many cities. At least you could have if you were one of seven investors that co-founder and CEO Brian Chesky was eager to get involved in his company.
As Chesky wrote recently in a widely circulated post on Medium:
On June 26, 2008, our friend Michael Seibel introduced us to seven prominent investors in Silicon Valley. We were attempting to raise $150,000 at a $1.5M valuation. That means for $150,000 you could have bought 10 percent of Airbnb. Below you will see five rejections. The other two did not reply.
Why share this story, and parts of the rejection emails (with the names of the investors redacted)? Not to rub it in their faces, Chesky said, but to inspire others.
“Next time you have an idea and it gets rejected, I want you to think of these emails,” Chesky wrote.
This is a common theme. As Sam Altman, president of Y Combinator put it recently, “Who’s going to stay on an air mattress in a stranger’s apartment, honestly? People always make the mistake of calling an idea small or stupid because they don’t know how it’s going to evolve. If you bet on smart people, they eventually figure out their way into the big idea.”
Here are some of the highlights from the emails Chesky received. You can read the whole post on Medium.
Investor No. 1: “Not in our area of focus, do wish you best of luck...”
Investor No. 2: “The potential market opportunity did not seem large enough for our required model.”
Investor No. 3: “It’s not in one of our five prime target markets, so it’s a long shot for involvement … If you get to the point of a Series A investment please let us know and we’ll take a look.”
Investor No. 4: “Thanks for the follow up. … I really like the progress you guys have made, but between issues outstanding with ABB and my current time commitments to other projects … I’m not going to be able to proceed with an investment.”
Investor No. 5: “We decided yesterday not to take this to the next level. We’ve always struggled with travel as a category. We recognize it's one of the top e-commerce categories but for some reason, we’ve not been able to get excited about travel-related businesses.”
Investor No. 6 and No. 7: [No reply.]