Two years earlier, at twenty-five, Theresia had married her former Bain colleague Tim Ranzetta, who now worked as a buy-side analyst at a mutual fund company in Boston. Theresia Gouw Ranzetta flew out to see her husband every chance she could. But the two were trying to save money, given that she was working for stock rather than salary. And she didn’t mind the bicoastal arrangement. Not having a husband around to worry about gave her more time to work.
And that’s exactly what she did in her new job at the start-up Release, which had office space on the second floor of an old building called Casa Mills in Menlo Park. The company’s goal was to become the largest software distributor over the Internet. The building at 250 Middlefield Road frequently had brownouts, and a good Internet connection was as elusive as sleep. Theresia and the gang resorted to drilling a hole in the floor to siphon power for their servers from their neighbors below, who had the MacDaddy of high-speed Internet, T1 lines carrying digital data at 1.544 Mbps.
The guys working below, who had an Internet start-up called Four11, needed all the computing power they could get. They had online yellow pages, white pages, and a video phone directory, and they were preparing to go live with one of the first free Web-based e-mail services, called RocketMail.
One night as Theresia worked on a presentation and her co-founders took a break to play the video game Doom, the electricity blinked on and off like a flirtation—then went dark. Theresia peered out the window and down the street. Most of the buildings were dark, but the lights were still on at the U.S. Geographical Survey offices across the street, and lights were still on at Four11 below. Through the holes in the floor, she heard the familiar beeping of the gigantic UPS (uninterruptible power supply) backup batteries. As the hours passed and the batteries drained, Theresia heard Four11 founder Geoff Ralston and his crew—which included a handful of impressive women, Jessica Livingston, Katie Mitic, and Gloria Gavin—strategize over the next steps. She smiled when she heard their nutty plan to restore power.
At around two A.M., as she packed up by flashlight, Theresia spotted Ralston and his crew carrying armloads of extension cords. They trotted across Middlefield Road to the Geographical Survey offices, talked to a security guard on the main floor, and proceeded to lay orange extension cords all the way back across Middlefield Road, strapping them down as they went. They pulled the final cord into Casa Mills through a window, and computer power was restored.
Sitting in her car in the Casa Mills parking lot, Theresia couldn’t help but smile at the extension cords spanning Middlefield Road. This was life at a start-up. She sat with the engine running, wondering where she could go to sleep.
MJ
The click clack of heels on the Spanish tile floor in her Palo Alto home got MJ’s attention. The heels belonged to her daughter, Kate, who was ten years old. Kate had a pair of dress pumps and liked to pretend she was off to work, just like her mom. MJ’s son, Will, who was seven and couldn’t sit still, scampered after their cat, Heidi, so named because she was always hiding. MJ’s three-year-old, Hanna, was clinging to her leg. MJ’s husband, Bill Elmore, also a venture capitalist, was out the door early for meetings.
It was a Monday morning, the start of a new workweek, and MJ kept a close eye on the clock. She needed to be at IVP at eight-thirty for the weekly meeting. As she scrambled eggs, Will asked in a continuous loop for cocoa puffs instead. Meanwhile the family Labrador, Cindy, scratched at the door to be let out. MJ ignored her vibrating Motorola StarTAC phone.
After everyone was dressed and breakfast was on the table, MJ greeted their beloved nanny, Tina, kissed the kids goodbye, reveled one last moment in the happy chaos, and closed the garage door, like a seal to the outside world. She marveled at how the venture guys—her husband included—seemed to compete for who could hold the earliest meetings. How am I supposed to make a meeting at six A.M.? She would not miss mornings with her kids. Now, alone in her car and free of children bemoaning her choice of music, she slipped a Faith Hill CD into the player.
As she pulled out of the driveway, MJ wondered how her mother, Dorothy, had managed to raise five kids in that small house in Terre Haute. MJ remembered the ice on the inside of her bedroom window during the long winter months. Her mother had worked the night shift at JCPenney, yet had done all the cooking, cleaning, shopping, and sewing, with virtually no help. MJ’s dad was gone all day teaching; he spent his weekends working on his car or sequestered in his photography darkroom.
Picking a piece of scrambled egg off her navy slacks, MJ headed toward Sand Hill Road. The Faith Hill CD had a way of making the commute shorter and more enjoyable. Among the songs was her favorite: “Take Me as I Am.”
SONJA
Sonja was enjoying lunch in the heated ski lodge at Sun Valley, comfortably well away from the slopes, when investment banking star Thom Weisel approached her table.
“Sonja, I signed you up—you’re in the race,” Weisel enthused. He had flown bankers and venture capitalists, including Sonja, to the famed Idaho resort in a chartered jet. A decorated athlete in skiing, cycling, speed skating, and running, and past president of the U.S. Ski Team, Weisel was known for hiring Olympic athletes and Navy SEALs and turning them into bankers.
But Sonja, who had skied all morning, had not signed up for Weisel’s weekend boondoggle to become the next Jean-Claude Killy; it was all she could do not to choke on her lunch. Surrounded by men, with all eyes on her, she was not about to show fear. The southern belle who had been cut from her high school sports teams and hadn’t made the cheerleading squad because the dance moves were too fast, had skied maybe five times in her life—with her church group in Virginia. Her favorite part about skiing was après-ski.
Now she was being asked—more accurately, ordered—to participate in a timed downhill event with the hard-charging boys of banking, including some notable Olympic skiers. Yet Sonja couldn’t say no. She needed to be a good sport. After all, this was Thom Weisel, who had sold his company, Montgomery Securities, to NationsBank for $1.3 billion, the same investor who had helped take public several seminal companies, including Amgen, Micron Technology, ROLM, Integrated Device Technology, Yahoo!, and Siebel Systems. It was no surprise to anyone that he wanted his firm’s name on the left side of a company’s initial public offering prospectus. The lead banker always got the coveted left side.
Like any venture capitalist, Sonja wanted to fit in with Weisel’s alpha male bankers. Being liked in Silicon Valley was a currency. It’s what made one VC invite another in on a deal. It was a tacit requirement in a complex game. For the few women in the game, being liked meant learning to be assertive without being aggressive, to be heard without being loud, and to like money without being seen as greedy. It meant when a partner wanted to take her to a shooting range to teach her to shoot, she readily obliged. It meant saying yes to a downhill race when she barely skied.
So Sonja fastened her boots, gathered her things, and braced for the freezing air. Her only coat of armor in this race was courtesy of Patagonia. She was one of only a handful of women VCs invited to this weekend getaway. She was younger than most in the group and more junior in her career. The other women at the lodge were wives or girlfriends.
Near the top of Bald Mountain, with what looked like a blizzard bearing down, Sonja surveyed the handful of teams, each of which had five skiers. Her teeth chattered as she listened to the race parameters. Skiers would race one at a time. Gates were formed by poles set twenty-six feet apart. Every skier had to pass through every gate, without missing one. The team with the fastest total score would win. Sonja, in her puffy black jacket and ski pants, spotted an Olympic skier on a competing team: Otto Tschudi, a Weisel executive who had skied for Norway in two Olympics, turned pro afterward, and was rated one of the top fifteen slalom skiers in the world. Sonja’s skiing career consisted of bunny hills followed by green-for-beginner runs and a few blue-for-intermediate. As sh
e waited her turn at the top of the run, her teammate launched down the hill as if competing for gold. Sonja was up next. Eyeing the chutelike run, she feared this was not going to end well. She felt like the Grinch’s dog, Max, looking fearfully over the snowy precipice.
But Sonja understood that this three-day weekend was not about catching up on sleep, sitting by the fireplace, or hitting the spa. Even the top skiers signed up for intermediate races to ensure they would win. Behind the pretense of casual fun was cutthroat competition. Behind the merriment of the lavish dinners was jockeying for who sat where. Seating charts for meals were closely held and carefully constructed weeks before the event. Weisel studied the charts, barked orders to an assistant, and rearranged players like chess pieces—all while riding his stationary bike.
Atop the snowy slope, Sonja briefly closed her eyes and visualized making it down the hill safely. Her teammates could rip, shred, and tuck at the finish line. She would ski slowly to the bottom. Obstacles are my allies. She took off at a decent pace, focusing everything she had on slow and steady. She thought only of the next gate, not the whole course. One turn at a time, each building on the last. Another gate, another ally.
The snow beneath her was icy, and the wind had picked up. She focused on her breathing. Plant your poles down the hill. Feel your shins against the tongue of your boots. Relax your toes. One wrong move, and you’re out of the race, maybe the game.
Finally, her legs shaking, Sonja made it to the bottom of the mountain without a wipeout. She crossed the finish line to cheers. She certainly wasn’t the fastest; she was probably the slowest; but she had made it. At dinner that night, she was seated next to Weisel and she was stunned to learn that her team had won. She walked away with high fives and nods of approval, including from Weisel, and a Sun Valley picture frame.
In her time in venture capital so far, Sonja had shot guns, knocked back whiskey, cold-called countless companies, chased down competitive deals, babysat triplets—and now, performed some scary skiing maneuvers. She had not made it this far by backing down from challenges or sitting on the sidelines. That’s why Menlo Ventures had elevated her to partner, four days before her thirtieth birthday. She was the youngest partner in the firm’s twenty-year history.
MAGDALENA
Arriving at 3000 Sand Hill Road, Magdalena sank back into the warm seat of her car and closed her eyes, psyching herself up before making her big pitch to Menlo Ventures. Like all major venture capitalists, Menlo had the power to help transform a great idea into a company or even an industry—and Magdalena was firmly convinced that CyberCash was a great idea, because the future of commerce was on the Internet.
She was dressed in a colorful but conservatively tailored skirt suit with shoulder pads, a far cry from her days at the Stanford computer center, where she had entertained herself and fellow geeks with her memorable vintage costumes. She got out of her car and walked along the pathway framed by manicured grass and bright flowerbeds. There to greet her was her CyberCash co-founder, Dan Lynch, a gentle and lumbering soul with a mop of graying brown hair and oversize horn-rimmed glasses. He always wore the same thing: slacks and an ill-fitting golf shirt.
“Hey, girl,” Lynch said fondly. He was preternaturally happy, telling her, “I make promises, you deliver on my promises.” Lynch was a known entity in tech circles, having managed the computing laboratory at the Stanford Research Institute and helped build the Arpanet, the network that became the basis for the Internet. Earlier Magdalena and Lynch had started a company called Internet Access, to bring corporations online. But the two couldn’t raise any VC money, and their company had been merged into UUNet, a similar commercial Internet access provider.
As Magdalena and Lynch walked into the conference room at Menlo Ventures, she was struck by something unusual and a bit out of place. But it wasn’t the 1970s furniture or art. In any event, she had a presentation to give and began concentrating on projecting what one former boss called her “delicious eff you attitude.” She shook hands, hugged one of the partners, John Jarve, who had invested in UUNet, and pulled her PowerBook Duo and docking station from her briefcase. Magdalena and Dan had sixty minutes to present, followed by time for questions. Where Magdalena was the pragmatic, get-it-done founder, Dan was the big-vision blue-sky guy.
Like most venture firms on Sand Hill Road, Menlo dedicated Mondays to hearing pitches from entrepreneurs, offering three ninety-minute slots, including one that went through lunch. Magdalena focused her presentation on three categories of merchandise perfect for this new world of e-commerce: wine, clothing, and books.
She presented a diagram showing how merchants, banks, and shoppers used CyberCash’s “certified wallet” to do encrypted and secure transactions. But as she talked, her attention was pulled to the copper-and-wood conference table. The VCs were eating takeout from the Sundeck restaurant. The food looked so good. Magdalena always surprised people by how much she ate during the day. She scoffed at Americans’ idea of a salad for lunch. She needed a real meal, she would say, salad, entrée, and dessert.
“Electronic commerce is where geography disappears and where the middleman disappears,” Magdalena continued, walking the VCs through the mechanics of CyberCash. “The consumer deals directly with the merchant. As the middleman disappears, the merchant can pass on significantly more favorable pricing to the consumer.” CyberCash encrypted credit card numbers; offered “micropayments” to buy, say, one news article at a time; and offered “cyber coins,” for twenty-five-cents-a-pop video games. But the promise of e-commerce wasn’t clear to many of those in the conference room. The VCs peppered Magdalena and Lynch with questions: Why would a consumer do this? Could a digital bazaar become a significant thing? Wouldn’t shoppers want to flip through the pages of a book before buying it, or talk to an expert in a wine store, or try on a dress?
The baffled disconnect reminded Magdalena of July 1969, when she was ten years old, growing up in Turkey, and listening to the news that Apollo 11 had landed a man on the moon. She had gushed about the historic landing for days afterward and couldn’t comprehend the shrugs or apathy. “What’s wrong with you guys?” she implored her friends. “America spent the money! Came up with the technology! This is a new frontier!”
The incomprehension felt similar today, though the frontier this time was the nascent but boundless Internet. While Dan fielded more questions, Magdalena shifted her attention to the oddity she had been drawn to when she first walked in, the puzzle piece that didn’t fit, the circle in the row of polygons. At the Menlo table, crowded with men, sat a woman. Nordic-looking and twenty-something, she had tidy, shoulder-length blond hair and blue eyes and wore a tailored navy suit and a white blouse. Interesting, Magdalena thought. I wonder where they found her.
Later she would learn the woman was Sonja Hoel. Sonja, for her part, paused in her copious note-taking to take Magdalena in. She appeared poised, smart, beautiful, and Mediterranean-looking. But neither woman held the other’s attention for long. For Sonja, work was about merit, and gender was irrelevant. For Magdalena, singling out another woman in Silicon Valley would be like embracing a fellow Armenian on the beach in Istanbul just because she was Armenian. It was irrelevant.
As the pitch ended, Magdalena realized that reluctance hung in the air. The VCs had more questions than answers. But she knew that everything about CyberCash was unique, and that usage of the World Wide Web was exploding. She had talked recently with a man named Jeff Bezos, who months earlier had quit his job on Wall Street to launch an online bookstore called Amazon out of his garage, thanks to funding from his parents.
Magdalena made it clear to the Menlo group that she and Dan would be talking with other VCs, including Kleiner Perkins Caufield & Byers just up the road, and that they had interest from a number of companies, including Intel. Magdalena shook hands with everyone, including Sonja. But there would be no sisterhood bonding on this day.
Magdalena understood Sonja’s polished veneer and knew an outsider when she saw one.
As Magdalena headed back to the parking lot with Dan, she sensed that their pitch wasn’t going anywhere at Menlo Ventures. They were not going to be offered a term sheet. But Magdalena was a survivor. If she could deal with transplanting herself to America and working two jobs while earning two degrees at Stanford, she could surely deal with today’s rejection.
Just before she left Turkey to attend college in America, neighbors, friends, and family turned out to say goodbye to her. As was the tradition, they threw buckets of water behind her car for good luck. The luck wouldn’t work if you looked back. And she never did.
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