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This is Youtube’s pitch deck to Sequoia which was released in a legal proceeding. It is pretty basic with only 10 slides. In it I have also included 3 stats slides which were not in the original deck.
They raised a $3.5m seed.
YouTube enables users to upload, view and share videos. It uses Adobe Flash video and HTML5 technology to display a wide variety of user-generated video content, including video clips, TV clips, music videos, and amateur content such as video blogging, short original videos, and educational videos.
YouTube offers a variety of features, including playback, uploading, quality and codecs, and 3D video viewing. It also offers users the ability to view its videos on web pages outside their website. The videos on the site are playable on both iOS and Android platforms. Unregistered users can watch videos, while registered users can upload an unlimited number of videos. Videos considered to contain potentially offensive content are available only to registered users affirming themselves to be at least 18 years old.
Most of the content on YouTube has not been uploaded by individuals, but by media corporations including CBS, BBC, Vevo, Hulu, Haber and other organizations that offer some of their material as part of the YouTube partnership program. Partners from major movie studios, record labels, web original creators, viral stars, and millions more all have channels on YouTube. YouTube is predominantly an ad-supported platform, but also offers rental options for a growing number of movie titles.
YouTube is currently based in San Bruno, California, and is available in 76 languages.
In November 2006, YouTube was acquired by Google and now operates as a Google subsidiary.
YouTube raised $11.5M in 2 Rounds from 2 Investors before exiting.
|Date||Amount / Round||Valuation||Lead Investor||Investors|
|Mar, 2006||$8M / Series B||—||2|
|Nov, 2005||$3.5M / Series A|
The Youtube valuation
Viacom took Google to court in 2010. This is great for us as a lot of information came out of it. This deck came from a deposition from Roelof Botha of Sequoia.
A very interesting deposition came from Google CEO, Eric Schmidt where he was questioned about overpaying for Youtube.
The following is an edited excerpt of Schmidt’s deposition:
Stuart Jay Baskin, a Viacom attorney: And what was management’s valuation?
Schmidt: Much lower than we paid for it.
Baskin: And how was that communicated to the board?
Schmidt: I told them.
Baskin: So why don’t you tell us what you remember telling the board in connection with the valuation?
Schmidt: I believe YouTube was worth somewhere around $600 million to $700 million.
Baskin: And you communicated that to the board?
Schmidt: I did.
Baskin: Of Google?
Schmidt: I did.
Baskin: What methodology did you use to come up with that number?
John P. Mancini, an attorney working for Google, objects.
Schmidt: My judgment.
Baskin: Was it based on cash flow analysis? Comparable companies? What were you using as the basis for your judgment?
Schmidt: It’s just my judgment. I’ve been doing this a long time.
Baskin: So you orally communicated to your board during the course of the board meeting that you thought a more correct valuation for YouTube was $600 million to $700 million; is that what you said, sir?
Mancini objects to characterization of the testimony.
Schmidt: Again, to help you along, I believe that they were worth $600 million to $700 million.
Baskin: And am I correct that you were asking your board to approve an acquisition price of $1.65 billion; correct?
Schmidt: I did.
Baskin: I’m not very good at math, but I think that would be $1 billion or so more than you thought the company was, in fact, worth.
Schmidt: That is correct.
Baskin: Can you tell us what reasoning you explained?
Schmidt: Sure, this is a company with very little revenue, growing quickly with user adoption, growing much faster than Google Video, which was the product that Google had. And they had indicated to us that they would be sold, and we believed that there would be a competing offer–because of who Google was–paying much more than they were worth. In the deal dynamics, the price, remember, is not set by my judgment or by financial model or discounted cash flow. It’s set by what people are willing to pay. And we ultimately concluded that $1.65 billion included a premium for moving quickly and making sure that we could participate in the user success in YouTube.
Youtube Pitch Deck
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