Quora Question: What Was It Like to Invest Early in Twitter?

Mike Maples describes being an early investor in Twitter. Kacper Pempel/Reuters

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Answer from Mike Maples, founding partner at Floodgate:

Dynamic is a great word to describe the early days at Twitter.

I moved from Austin to Silicon Valley in early 2005. I was hoping to get a job in venture, but things weren't going my way. Then I made my first-ever angel investment in a podcasting company called Odeo and things went from bad to worse. The first week after I sent in the check, Apple decided to give podcasting away on iTunes for free. That was a pretty big problem since 90 percent of playback devices back then were iPods. Oops!

Evan Williams tried and tried to make a go of it. One day he called me and said "look, we don't have a business. I'm going to give the investors their money back." I was very insistent that he not give it back to me. I thought, the word "venture" is contained in the word adventure, and it comes with the territory. You win some; you lose some. But he insisted, and I accepted.

While we were talking, he said, "By the way, as part of the agreement, I am going to experiment with some stuff we have been working on with a side project. We are trying to decide what to call it. Some are saying "VoiceMail 2.0," and others say Twttr." I asked "What does Twitter do?" Ev said "You say what you are doing in 140 characters or less." I said "…then what happens?" He said. "That's it. That's all it does." I asked, "What is the roadmap?", Ev said "There is no roadmap." I continued, "What is the revenue model?" to which Ev replied "There is no revenue model." So finally I asked "Ev—why do you think this is even a product, not to mention a real business?"

Ev said something I'll always remember. He pointed out that when he invented Blogger, they got over 1 million users. But podcasting was harder for people. You had to record audio and put it up in a podcasting directory. What if you took the total 180 degree opposite approach and made blogging super easy by enabling micro-blogs? What if 10 million people did micro-blogs instead of 1 Million? "If that happens, then the burden of proof will be on the people who are negative." To which I said, "OK, I want to invest in Twttr, even though I think you should add back the vowels." He said that if he ever raised money, he would let me, and he kept his word.

In a twist of Karma, Twitter ended up launching and killing it at SXSW in Austin, my former home town. And then Ev took my money when it was time. The valuation of $20 million pre-money seemed a little high, but a deal is a deal.

For the next couple of years, I got a little bit distracted by worries about the fail whale, changes on the management team, and other internal problems. But one day I was picking up my daughter Sloane at a play date. Her friend's mom said "Sloane says you were the first investor in Twitter? Is that true? How in the world did you find it? I just saw them on Oprah." Then it hit me. This was going to be more than just a little bit successful. But I had only begun to realize. Soon Tweets and Twitter handles and hashtags were all over TV and the web. Twitter was going to be a ThunderLizard.

Today, whenever I visit Twitter's headquarters in San Francisco, I get a lump in my throat. I can't help it. That huge building in downtown San Francisco with the flags on the side. It's a lot to take in.

It is fashionable to criticize Twitter right now, but you will not see any of that from me. It exceeded my wildest dreams. It was an absolute joy to see them take off, and it still is for me.

A last twist of karma: When I came out to Silicon Valley, hoping to be a venture capitalist, I couldn't get the top firms to want to bring me on board. Ironically, it was the founders who gave me the first chance, people like Evan Williams and Kevin Rose. They were the ones who took the leap of faith. It was the founders who put me in business.

Whenever I think about our business and what I hope we stand for at Floodgate, I try as hard as I can to treat entrepreneurs with the same grace that Evan Williams offered me. It's not always easy because when it comes to treating me with grace; Ev set a pretty high bar.

And one final thought about Twitter. When people tell you they saw the future of these companies at the time they invested, they are usually blowing smoke. Serendipity and the ability to make the most of it play a much bigger role than most will admit. If you are a founder, I hope you keep that in mind when someone tells you that you can't do something.

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