A Capital of $1.5 Million (3)
Not only Bill Gates, but the two employees behind him, and even Brigadier General Colson were stunned. Ryu Geun-tae was the least surprised of the bunch, but even he seemed unable to imagine such a massive investment; he blinked repeatedly, his mouth hanging open, unable to utter a word.
‘Surely, the kid must have misspoken, right?’
For an Asian child, he spoke English reasonably well, but Yoon-gi’s English definitely had a clumsy edge to it. It was only natural; while he was learning from Ryu Geun-tae, Ryu himself wasn't a native speaker, and the tutoring sessions weren't exactly long. Since he had mostly learned through self-study, a bit of awkwardness was inevitable. That was why Bill Gates smiled again, assuming the boy had meant to say 700 dollars, or 7,000 at best, and had simply "messed up because he didn't know English well."
"So, you want to invest 700 dollars?"
At Bill Gates's words, the others nodded and smiled as well.
However, Yoon-gi wore a puzzled expression and corrected the amount again.
"No. 700,000 dollars."
Bill Gates adjusted his glasses with his right hand, took a piece of paper and a ballpoint pen from an employee, and handed them to Yoon-gi.
"Why don't you write it down in numbers?"
"Yes!"
As Yoon-gi began to write, Bill Gates watched the numbers appearing on the paper intently.
7
70
700
‘Right, it’s 700 dollars, isn’t it?’
But then, a comma appeared on the paper.
700,
‘Ah, did he perhaps mean his own country’s currency unit?’
He was certain he had heard the word "dollars," but Bill Gates’s common sense favored his judgment based on experience over his hearing.
700,000
‘Right, there’s definitely going to be a different symbol after that, not a dollar sign.’
But Bill Gates’s assumption—no, the very foundation of common sense he had built up until now—was shattered into pieces.
700,000$
"This is how much I’m going to invest!"
Seeing the paper with the perfect numbers and symbols, Bill Gates looked first at Brigadier General Colson.
"Ah, my grandson is the eldest grandson of one of the top 100 companies in Korea. I don’t know if he has that much cash on hand right this second, but he certainly has the ability to pay it."
Hearing this, Bill Gates looked back at Yoon-gi.
"I can pay it. I can pay 200,000 dollars right now, and I’ll invest the remaining 500,000 dollars over five years, at 100,000 dollars per year."
While learning business management, Yoon-gi had grown fond of the word "shock." It wasn't a business term, of course, but he had realized that he had been hit by that word many times throughout his life.
‘When they said they’d raise the wages for manual labor, they’d present a large sum, only to deduct every single possible thing behind the scenes.’
That was the method the companies used on him and his fellow laborers when they complained or suggested a raise. He was now using that very same method on Microsoft.
If Yoon-gi had mentioned 200,000 dollars first and then brought up the additional 500,000 later? He wouldn't have achieved the same impact as dropping the 700,000 dollar figure all at once.
"Uh... um... 700,000 dollars is seven times our company's revenue from last year. Are you saying you want to invest that much in our company?"
"Yes! You just said you’d accept even a personal investment. I really want to invest in this company."
Bill Gates hurriedly shook his head.
"No, no. This is beyond the scope of what I can accept as a personal investment. I mean, this isn't a relationship between a fan and a star anymore; it’s becoming a relationship between a CEO and an investor—no, it is becoming that."
Bill Gates’s tone shifted to be as polite as if he were in an official setting.
"Uncle, please show the documents to Mr. Bill Gates."
At Yoon-gi’s words, Ryu Geun-tae handed over the financial documents he had prepared in advance. Bill Gates checked the papers, and his hands began to tremble.
‘That someone would recognize me to this extent—not my parents, not my grandfather, not even America, but in South Korea, a small country right next to Japan...’
It is a fact many people get wrong, but Bill Gates came from a "gold spoon" background, not a poor one. His father was the head of the top law firm in Seattle, his mother was an executive director at First Interstate Bank, and his grandfather was a bank founder who was wealthy enough to give Bill Gates a Porsche as a gift. However, even these people didn't provide "investment equal to their wealth" for Bill Gates’s true dream. They wanted him to graduate from Harvard and run on the tracks they had laid out for him; they didn't want him to start a computer company. Of course, it’s true that as wealthy people, they provided some support, and his parents’ connections were applied in later lawsuits against IBM, but in 1977, at this point when Yoon-gi found him, Bill Gates was clearly not receiving support commensurate with his family’s wealth.
"I want to ask you one more time. Our company is a small firm with 100,000 dollars in annual revenue. Are you still going to invest?"
"Yes. I just want to make the biggest investment I can right now in the uncle who does the things I like but cannot do myself."
When the conversation reached this point, one of the employees standing quietly whispered to Bill Gates.
"Bill, the amount is too big. It’s way too big. If you're not careful, you might lose management control. You aren't getting support from your parents, so isn't it too dangerous to take such a large sum from that kid? He might not have any such intentions, but you never know if the adults around him might egg him on."
"Paul, your point is valid, but if we take this investment, we’ll definitely have some breathing room in the lawsuit with MITS. It means we won't need to rely on my parents’ connections or support."
"But still..."
The employee who had been standing quietly was Paul. And the other one was Steve Ballmer. Although it was still three years before he would join Microsoft, he had been curious when he heard a U.S. Army Brigadier General had visited his friend’s company, so he had stayed to watch. Of course, Yoon-gi had no idea about this. He knew the "older Bill Gates" through TV, newspapers, and books, and could recognize the younger Bill Gates based on that, but recognizing Paul and Steve was impossible. After all, except for Hong Jin-ho, people don't really remember second place.
"Steve, what do you think?"
When Bill Gates asked Steve in a whisper, Steve pondered for a moment before answering.
"For now, try drafting a contract. And let’s ask to include a clause to protect our management rights. If that gets rejected, let’s try lowering the investment amount and testing the waters again. If we still can't reach an agreement, how about giving it up? He’s not a total stranger, and after all, his grandfather is a U.S. Brigadier General, and he had a recommendation from Professor Anderson, so it should be fine. Plus, if the company grows with this investment, you might get real investment from your parents or grandfather, not just begging for aid."
"Got it, I’ll do that."
Bill Gates sent the two back and spoke cautiously.
"In that case, shall we try drafting an investment contract? Should I discuss it with this gentleman?"
When Ryu Geun-tae was pointed out, Yoon-gi nodded.
"What about the basic terms? Of course, I want to know the details too."
Bill Gates nodded, and immediately began drafting the investment contract with Ryu Geun-tae. If this were an investment agreement or M&A between large corporations, it wouldn't have ended in a day or two and would have involved tedious negotiations, but this was a unilateral, high-value investment in a small business. Therefore, it didn't take long. A consultant employee came in midway to make a few adjustments, but it didn't take much time either.
"I’d like to discuss management rights as a special clause... Since the amount far exceeds our revenue, I’d like to ensure our autonomy in this regard."
Bill Gates mentioned revenue, but if you think about it in terms of net profit, the amount Yoon-gi was investing was truly astronomical. If you assume Microsoft’s net profit margin was 10 percent, Yoon-gi was declaring he would invest an amount equal to 70 times their net profit. Yoon-gi’s current annual allowance, which was equal to the salary of a CEO of a major textile company, was by no means a small amount. Furthermore, he had been growing this money for the past 2 years and 3 months using various methods. Since he had no intention of spending money on luxury, he had essentially used 100 percent of it as investment capital and grown it into a significant sum. Of course, his mother, Park Yeon-ji, and recently Ryu Geun-tae, had been a huge help in that process. Therefore, Yoon-gi had no trouble investing this amount while still buying up land, but for Bill Gates, who was receiving the investment, the burden of the amount was too great.
"To what extent do you mean by autonomy?"
Along with Yoon-gi’s question, Ryu Geun-tae added, "He’s asking out of curiosity, so you don’t need to feel pressured."
At Ryu Geun-tae’s words, Bill Gates organized his thoughts for a moment and replied.
"It means we want to operate the company according to our own plans. We’ve been doing things a certain way, and if strong, different opinions suddenly come in, our morale could drop."
"Isn't that obvious? I like computers, but I don’t know much about them. But you know them well, Uncle. So, naturally, you should be the one managing this company."
At Yoon-gi’s words, a look of relief appeared on the faces of Bill Gates, as well as Paul and Steve.
"But if that happens, does that mean I won't hear any news about what’s happening in the company?"
Bill Gates hurriedly shook his head.
"That’s not it. Although we aren't a publicly traded company, you will effectively become the major shareholder, so whenever something happens... no, if you wish, I will inform you of the company’s situation via mail once a month."
"Great! But, I have one favor to ask."
"What is it?"
At Bill Gates’s question, now slightly more at ease, Yoon-gi laid the groundwork for the most important wedge.
"Looking at what you said, Uncle, it sounds like if we don't have an 'agreement,' someone who has invested a lot can interfere with the company, right?"
"That is correct."
"Then, people who have invested a lot could band together or split up and present different opinions to the company, couldn't they?"
"That’s right."
Ryu Geun-tae added from the side, "The young master is currently studying management to prepare for his succession. You can think of him as having the knowledge of a second-year business student."
At Ryu Geun-tae’s words, Bill Gates was slightly surprised and listened intently to Yoon-gi. If he had heard this when discussing autonomy, Bill Gates’s tension might not have eased.
"If my thinking is correct, what you’re worried about, Uncle, is me monopolizing the stock shares and making things difficult for the company. How about this? When the company allocates new shares through a shareholder allotment method, my priority right will be capped at 49 percent. And if we do it via shareholder allotment, couldn't we include a special clause that I have no voting rights regarding the issuance of new shares? If we put this in as a limitation rather than an exclusion of voting rights, I think it would be the type of investment you want."
If Yoon-gi’s conditions were followed, his stake would be 99 percent immediately after the investment, but as continuous defensive investments were made, it would eventually fall below 50 percent. However, since Yoon-gi would also be buying up 49 percent of the new shares whenever possible, he would still have the highest probability of being Microsoft’s number one shareholder in the future. Monopolizing the shares wouldn't matter anyway if Bill Gates lost his motivation because of it—everything would be for nothing. From Yoon-gi’s perspective, it was a condition that yielded a bit while extracting the maximum benefit, and from Bill Gates’s perspective, it was seen as an incredibly friendly investment for Microsoft, which was still a small business.
"Just a moment."
After hearing this, Bill Gates turned to Paul and Steve, and both nodded after a little thought. 700,000 dollars was a huge investment amount, but according to the proposed conditions, they could sufficiently catch up depending on the company’s growth.
"Then, let’s do that."
"And since Microsoft is a private company, I’d like to make dividends mandatory until it goes public. How about a dividend rate of about 35 percent of net profit?"
Since it was a fact that shares of a private company were effectively worthless scraps of paper, Bill Gates couldn't refuse this clause either. Paul and Steve, who were standing behind him, nodded as well.
"We will do that."
"Lastly, I’d like to keep the fact that I invested a secret."
"A secret...?"
At Bill Gates’s question, Yoon-gi nodded.
"Yes. I don’t want you to get less attention just because I get attention. I want to watch your path, Uncle, not interfere with it."
"Are you sure it’s better to keep it a secret?"
"Yes."
At Yoon-gi’s repeated agreement, Bill Gates nodded.
"Understood."
Bill Gates stood up and reached out to shake Yoon-gi’s hand, and Yoon-gi grasped Bill Gates’s hand with his small one.
"Can I call you 'Hyung' (older brother)?"
At Yoon-gi’s words, Bill Gates was anxious about how to deal with a major shareholder, but when Paul and Steve nodded, Bill Gates soon grinned.
"Sure, kid—no, Yoon-gi. I’m counting on you from now on, little brother."
It was the moment a life that couldn't even shake hands with a convenience store clerk in his previous life became a life shaking hands with the world’s greatest billionaire.