Everywhere Emil Michael goes, the green will follow. He impressively raised $15 billion within 30 months of his first day at Uber, the most funding in history for a private company.
“The advice that’s counterintuitive is entrepreneurs often get attached to a number,” Emil Michael says: “[They think] ‘I want to raise $10 million and I think my company’s worth $1 billion and I’m going to go find an investor who agrees with me.’”
But Emil Michael recommends flipping that idea on its head.
“Don’t get attached to a number; get attached to a process,” he says. “What does the process mean in this case? Well, the process means, ‘I’m going to invite a bunch of investors to look at my numbers, to hear my pitch, and to look at what I’m projecting for the future. Then I’m going to let them tell me what they think the company’s worth.’”
Michael says he calls it a market-driven approach to raising money.
“At the end of that, the market has spoken,” Emil Michael says. “It’s told you what your company’s worth, and you are not disappointed because it was a fair, transparent process, right?”
“Investors are happy too, because they figure, ‘Well, I didn’t have to hit a hurdle artificially,’ and they come out of that saying we got to a fair price. You’d be surprised that, on average, entrepreneurs take less money and/or price than they should when not using a process because investors early on may get spooked by the numbers without ever hearing the pitch or looking at the numbers. So when you run a clean and well-run process, you will likely have more investors engage, and that should yield a better answer for the company and the ultimate funders.”
As the man who helped turn Uber into a verb, Emil Michael also has some critical criteria on whether he’ll consider investing in a business—or not.
“Number one, who’s running it?” he says. “Because I’ve been a part of four founder-led start-ups, I highly value the difference between being an owner and a renter. When you’re an owner, as opposed to being a hired gun—who’s been hired into a position in a business—the trade-offs you make are different. And if you’re a missionary like me, I could work as hard as I need to work because I believe it’s something. It’s always in partnership with the person or people who started it.”
The second question Emil Michael always asks is: Is the idea significant enough? Michael says he is a firm believer in “go big or go home.”
“Is it a big enough idea that it could change the world in some way?” he wonders. “Uber obviously changed the world in a lot of ways by reducing drunk driving and giving economic opportunity to drivers.”
Emil Michael also can’t deny the invaluable social impacts of a huge idea. Uber suddenly became the trendy way to describe how people were getting around. Instead of ambulances, pregnant women in labor were suddenly calling on Uber, and celebrities like Camila Cabello and Chris Rock were buzzing about the brand. We all began saying, “I’ll just Uber it.”
“Uber helped people in underserved communities, who couldn’t get a taxi in New York, finally rely on a transportation service to get to work and home. So there are a lot of big, good changes, not without cost, but big, good changes brought on by transformational ideas. And so I’m looking at how big the idea is, and is it interesting? Is it global?”
The third factor Emil Michael considers when mulling investing in a new venture is whether it’s a winner or not.
“Can it be a winner, like Facebook, Apple, Netflix, or Amazon?” Emil Michael asks.
Still, not everyone can be a winner, and even the biggest names in Silicon Valley have had spectacular failures before striking gold.
“You have to have failed once or twice, and it could be in your own company,” Emil Michael says. “But if you’re not pushing the envelope, someone else [could be] on a particular idea. So you have to be more comfortable with risk. There are very few entrepreneurs who’ve been successful who have just been lucky all the way through. I don’t know any. Jeff Bezos almost went bankrupt at Amazon. Steve Jobs was kicked out of Apple before coming back and ushering in a smartphone revolution. Everyone has had their tough moments, and if you can be resilient through them, I think you have a better shot at success.”
Finding the next big thing
Michael says he remains passionate about working to help investors find the right entrepreneurs and vice versa because he’s always eager to fuel the next big innovation in tech.
“I consider myself more working in tech than helping with the financing part of tech,” Emil Michael says. “The reason I differentiate [the two] is because tech as an industry has come to dominate the economy in less than 20 years. It totally changed from an industrial age to a computer age, and so much wealth creation and so many opportunities are happening as a result. And the fuel that fundraising provides to start-ups is a core competency of the relevant business. In other words: if your company needs a lot of money to expand quickly, the company has to be good at fundraising. Many CEOs think that they are not great at fundraising. I would suggest to them to learn about how to get good at it because it can often be the difference between being the No. 1 or No. 2 in a given market given the speed at which tech is disrupting incumbents all over the world.”
Focusing on the future is the moxie that keeps Emil Michael passionate about his work.
“I think [tech in] the next 20 years is going to continue to be the dominant economic growth factor in the world,” Emil Michael says. “And there are so many young people in it, so it’s exciting, and in some ways, in the tech world, you’re not breaking down something that was built—you’re building something new. And so when you get to build something new, versus going to IBM and trying to make a change, this is more exciting.”
What’s also exciting for Emil Michael is artificial intelligence.
Dil Bole Oberoi“We’re looking at some of the big, deep, new technologies that are going to fast-forward artificial intelligence, deep learning, robotics, and what you need for those are bigger, faster computers that work in a different way than classical computers,” Emil Michael says.
“We’re looking at quantum computing, and the analogy I use is, it’s like a bicycle to a car. It’s that different. The computer you use today, corporations use today, versus quantum computing. And therefore, the amount of stuff you could do is incredible. And you’re going to need it for self-driving cars, for self-driving planes, for robots that do all these new tasks. And so that’s my current area of focus.”
