The Rise of NVIDIA The Most Legendary Angel Investment in History

Author Liu Bo, Investment Circle PEdaily
This is a significant milestone in the history of global venture capital.
Not long ago, Huang Renxun mentioned in a speech at his alma mater Stanford University his first financing experience in life – in 1993, two angel investors jointly invested $2 million, valuing the company at $6 million. It was this investment that saved NVIDIA, which was on the verge of collapse shortly after its founding.
From then on, the NVIDIA empire was born.
When you do the math, a single angel round back in the year has now created a myth with a market value of $2.8 trillion, undoubtedly the best illustration of venture capital helping tech giants rise. Historical experience shows that the level of venture capital activity directly affects the prosperity of technology innovation companies. This is especially worth pondering at present.
No business plan
$2 million raised in the angel round
This investment story starts back in 1993.
At that time, Huang Renxun was working as an engineer at a chip company when his two friends, Chris and Curtis, approached him with the idea of starting a business. It was just before the PC revolution took off, Windows 95 had not been released yet, and the Pentium processor was still to come. It was clear that microprocessors would play a crucial role, and thus NVIDIA was born.
There is an interesting anecdote here – when Huang Renxun told his mother about his idea to start a 3D graphics chip company for gaming, she bluntly asked, “Why don’t you just get a job at an electronics factory?”
In short, Huang Renxun’s entrepreneurial journey was full of twists and turns, to the point where he didn’t even know how to write a business plan. He went to a bookstore and found a book titled “How to Write a Business Plan,” which had a whopping 450 pages. After flipping through a few pages, he gave up, saying, “By the time I finish reading it, the company would probably have gone bankrupt and run out of money.”
How difficult was it for NVIDIA to raise funds at the time?
Sid Siddeek, in charge of NVIDIA’s venture capital department, still vividly remembers: armed with presentation materials, he rushed from one investor conference to another, helping NVIDIA’s CEO and management team promote their story. His office was nothing more than a tiny mobile room.
In his speech, Huang Renxun recalled that at the time, he only had about six months’ worth of living expenses in the bank, and the whole family had to rely on that small amount of savings to get by. So, instead of writing a business plan, he went straight to his former boss, CEO Wilfred Corrigan.
After listening to Huang Renxun’s pitch, Wilfred Corrigan bluntly said he had no idea what he was talking about, calling it one of the worst startup pitches he had ever heard. Nonetheless, Wilfred Corrigan picked up the phone and called Sequoia Capital founder Don Valentine, saying, “I want to send a young man to you, and I hope you can invest in him. He was one of our best employees.”
However, after Huang Renxun finished his presentation, Don Valentine said, “A startup should not invest in another startup or work with one.” His point was that for NVIDIA to succeed, another startup needed to succeed as well, namely Electronic Arts, a video game development company. The CTO of that company was only 14 years old at the time, and his mom drove him to work.
In the end, Don Valentine and Satish Hill Capital each invested $1 million, allowing NVIDIA to secure $2 million in angel funding, with a post-investment valuation of $6 million. Just to give some context, before this, Don Valentine had only invested a few hundred thousand dollars in Apple.
This investment is still unforgettable today. Huang Renxun still remembers what Don Valentine said at the meeting: “If you lose my money, I’ll kill you.” Luckily, Huan