Microsoft took funding before their IPO. I've never understood why; it has the smell of a bribe; but they did. Apple took a lot of funding.

From what I read, Microsoft took a mezzanine round before IPO because VCs have connections to investment bankers, and Microsoft needed investment bankers to make the IPO process run smoothly. So yeah, it basically was a bribe.

Um, are you saying that these companies never raised money from investors? You know that they're both public companies, right?

Yes, but I meant to imply that they never raised money at the startup stage (and up until IPO...). Microsoft was almost entirely self-funding before going public, except for the money they received that PG mentions, which I never knew about.

True, but Microsoft and every startup has a specific set of circumstances that may be exclusive to their situation, whether it be timing (late 1970s), competitive landscape (big slothful IBM), location (being able to live in low-cost Albuquerque and still get clients), etc. To base your entire future around what worked for Bill Gates and Paul Allen in 1980 may not be the wisest decision.