You have to learn about Hotmail's entrepreneurial story.

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A few years ago, almost everyone had a Hotmail, maybe you were still using it, maybe you were already in Gmail, but anyway, as a web entrepreneur, you have to learn about Hotmail's entrepreneurial story-No, Hotmail was bought by Microsoft, not created by them.

To some extent, Hotmail's two founders, Sabeer Bhatia and Jack Smith, are "founders" of the type of Internet service web-based Email. Of course, from a macro point of view, the occurrence of Webmail is inevitable, but the question of time, but in the actual history, Sabeer and Jack's Hotmail is the first to put such services to the Internet enterprises.

But in 1995, when Sabeer and Jack, the two former Apple engineers, were getting together, what they wanted to do was not Webmail. With the advent of the internet and the popularity of browsers, two of engineers first came up with the idea that they could manage the database remotely via the Web-and, yes, the cloud was not a new concept at all.

Two of people started using weekends and hours of work to develop the Web database management software called "javasoft", but they found one thing: Behind the company's firewall, their email software couldn't connect to the outside server to send and download private emails, This makes it difficult for them to exchange between the files, often to the transfer of the magnetic disc, can let the other party to receive their own written code, or print out the data, in order to hand over to each other.

Such a situation for a while, until one day they suddenly brainwave, why not use the browser to send and receive mail, using the Web page to do an email system, will not be blocked by the fire walls. If they make such a system, not only can solve their own problems, there should be millions of people in the world have similar problems.

They knew they had found an amazing idea and they started to raise money for the venture. But they do not want to talk to Webmail the idea, because they are afraid to disturb the then biggest internet company Netscape, once Netscape also Webmail, then Sabeer and Jack of the two shrimp will not sing.

So they took the idea of the JavaSoft Web database everywhere to venture to raise money, their approach is if the venture to listen to this very ordinary plan, did not immediately turn away, but also willing to listen, they will Webmail this more "kill" idea with this VC share.

North American famous VC DFJ passed this test, so Sabeer and Jack and DFJ's number one partner Tim Draper share their Hotmail project, Tim a listen to the surprise of heaven, that this is a huge opportunity, immediately agreed to invest 300,000 dollars to Sabeer and Jack tried to develop the product.

But after all, the two sides disputed the dilution ratio and the valuation, Tim wants to buy 30% of the new company's stake in 300,000 dollars, which is to determine the company has a 1 million dollar post-money valuation. But Sabeer and Jack think that valuation is too low, so the dilution of the equity ratio is too high. Both sides you come to me, and finally to 15% transactions, that is, 2 million dollar Post-money.

But Sabeer and Jack did not know that, although they in the first round of the increase in the "favorable" conditions, but this let Tim Draper iron heart, must be in the second round, the third round of the increase in the future to regain his well-deserved benefits. So then, although Sabeer and Jack have tried to raise money for other ventures, whenever a new venture is contacted by DFJ to understand the operation of Hotmail (this behavior is called Due Diligence, referred to as DD), it only wants to monopolize the Tim Draper of Hotmail. For granted, the new venture Hotmail is not in good shape and advises them not to invest. So after all, Hotmail became a captive of DFJ, and later each round of financing could be left to DFJ to decide their fate.

With regard to fundraising, it is worse to take the wrong investor's money than to get the money. –may Kao, founder of the network.

Of course, DFJ is not entirely an evil venture, although it is cheap to raise capital and valuations, but DFJ is very active in the actual help of Hotmail, such as another email company they invested in, and Rocketmail introduced to Hotmail to share email addresses with Complementary parties and immediately launched close cooperation.

But this cooperation has also gone wrong, as all Hotmail new users need to register their email address to rocketmail, which allows Rocketmail to discover how popular Hotmail is, under Envy, a few months later, Rocketmail Unexpectedly launched their own Webmail services, instantly close comrades became enemies immediately, and DFJ also became sandwiched between two portfolios, both sides is not a person's venture.

At the same time, Microsoft came to the door, and they were amazed that Hotmail could attract and multiply 7 million users in just a year, while Microsoft itself was overwhelmed by 2.5 million people in MSN Mail. Microsoft initially proposed that MSN Mail be entrusted to Hotmail for operation, but the high-level worry about the future of the relationship, and finally after a few round-trip, Microsoft finally bought in 400 million U.S. dollars Hotmail. DFJ, Sabeer and Jack have all been rewarded handsomely for the deal, and the rest, as they often say, is a familiar history.

So to say the relationship between the entrepreneur and venture, in fact, is quite complex, although mutual shareholders and invested enterprises, most of the time to help each other, but in a few times, the two will also have the interests of the entanglements. But just as Y-combinator's founder, who is my respected investor, Paul Graham, says, your investors are so strict and selfish that at least he invests you with money when you need the most, and that's better than most of the rest of the venture.