How Jeff Bezos Found Risky Startup Capital For Amazon (2024)

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How Jeff Bezos Found Risky Startup Capital For Amazon? ›

He invested $10,000 from his personal savings to incorporate a company called Cadabra, Inc. Eventually, he changed the name to Amazon after one of his attorneys misheard the name as Cadaver. Then came his most risky investment. His parents invested $250,000, a significant portion of their savings.

He accepted an estimated $300,000 from his parents as an investment in Amazon. He warned many early investors that there was a 70% chance that Amazon would fail or go bankrupt. Although Amazon was originally an online bookstore, Bezos had always planned to expand to other products.

In practice, that means putting customers first is the guideline for every business decision. Bezos describes his deep respect for Amazon's customers, how their needs drive the business to constantly improve, and how customer focus dictates Amazon's expansion into new territories and markets.

Most large companies such as Amazon, Apple, or McDonald's started as sole proprietorships before changing their legal structure as they grew.

Amazon's $1 billion venture capital fund is expanding its investment scope in 2024, eyeing startups in the last-mile technology and autonomous vehicles space, according to the fund's director.

Bezos is the founder and former chief executive officer (CEO) of Amazon. He remains the executive chair of the company. He holds traditional investments, such as real estate and shares in other companies.

It may be the most successful venture investment of all time. In 1995, Jackie and Mike Bezos plowed $245,573 into their son's fledgling e-commerce website, according to a prospectus two years later. It was a big gamble, Mike Bezos, the stepfather of Amazon.com Inc.

By 1994, Bezos's eye was on the internet, after reading about the web's immense growth in one year. Bezos decided he needed to find some way to take advantage of its rapid growth. He made a list of 20 possible products to sell online and decided books were the best option, according to "The Everything Store" book.

He argued that a solid commercial strategy should be rooted in the things that endure over time. Amazon, under Bezos' leadership, exemplifies this approach by understanding and catering to customers' fundamental desires—low prices, fast delivery, and a vast selection of products.

Shaw, moved to Seattle, and Bezos founded Amazon with Scott's support. Scott was one of Amazon's early key contributors, and was heavily involved in Amazon's early days, working on the company's name, business plan, accounts, and shipping early orders. She also negotiated the company's first freight contract.

What are 5 facts about Amazon? ›

But like many successful companies, Amazon had modest beginnings—in this case, the garage of founder Jeff Bezos. In July 1995, Amazon.com opened as an online bookseller out of Bezos' Bellevue, Washington home. And while our operations and inventory look quite different now, we didn't want to forget our roots.

No, Jeff Bezos did not build the Amazon website on his own. While Bezos played a pivotal role in the founding and early development of Amazon, he did not personally write the code or design the website. In 1994, Bezos left his job as a vice president at a Wall Street firm and started Amazon as an online bookstore.

In 1994, Bezos started with nothing but a plan to capitalize on the burgeoning potential of the Internet. He invested $10,000 from his personal savings to incorporate a company called Cadabra, Inc. Eventually, he changed the name to Amazon after one of his attorneys misheard the name as Cadaver.

Amazon was founded in the garage of Bezos' rented home in Bellevue, Washington. Bezos' parents invested almost $246,000 in the start-up. On July 16, 1995, Amazon opened as an online bookseller, selling the world's largest collection of books to anyone with World Wide Web access.

One of the biggest problems Amazon faced, Stone writes, was that book distributors required retailers to order 10 books at once. But the company wasn't yet making enough sales to do that. Stone highlights a tidbit from a Playboy interview with Bezos, published in 2000, that illustrates how they got around the issue.

This initial and rapid success helped Bezos acquire approximately US$1 million in seed funding from approximately 20 angel investors between 1995 and 1996. In 1996, the venture capital firm Kleiner Perkins also invested another US$8 million in the company.

Bezos remained working for Exxon for 32 years. In 1995, Jacklyn and Miguel gave Jeff a loan of US$245,573 to start Amazon.com, leaving them both with 6% equity. Bezos and his wife Jackie are co-founders of, and major donors to, the Bezos Family Foundation.

To be sure, Amazon's e-commerce business generates the most revenue for the company. In the first nine months of 2023, Amazon's net revenue totaled a little over $66.5 billion. The company's North American and International segments, which focus primarily on e-commerce, together accounted for 83.6% of that revenue.

This can come at a hefty price. Amazon, one of today's biggest multinational companies dominating the e-commerce industry, only turned its first profit nine years after being founded.