Reed Slatkin and Earthlink:Earthlink Networks was founded by former coffee shop owner (Cafe' Mocha) Sky Daytonin 1994. Kevin O'Donnell, and Reed Slatkin- all Scientologists. Kevin had introduced Sky to Reed and Reed and Kevin each contributed $50,000 initial seed money with 7 subsequent rounds of funding.. The three of them became each approximate 1/3 owners.. The company was the brainchild of Sky Dayton who pioneered the concept of an easier way for non-technical people to set up internet accounts. At the time it was not clear the internet would be as successful as it is and the feeling was it may be more for high tech people. It originally grew out of the governmental Arpanet which is 20 years old this month and was used by the military and many universities initially. Earthlink pioneered the concept, now ubiquitous, of the CD which self installed, called the appropriate number and set the account up. Many who were very frustrated with the lengthy waits on technical support lines while they had to manually change config.sys, and setup files in DOS where relieved by what was a simple concept, but a large advance in usability, salability and marketability. Earthlink used this to leverage itself into a larger regional player among the over 4000 ISPs (Internet Service Providers) nationally.

In the early days Robert London an investment banker and venture capitalist with Cruttenden Roth in Santa Barbara was instrumental in the financing and survival of Earthlink in this nacient industry.

One of the crucial business decisions made by Slatkin was to guarantee over 2 million dollars in equipment leases. Sky negotiated a deal with UUNET to use their backbone and give the company a nationwide footprint(link). At the time this was a high risk, highly leveraged business decision that ultimately would be critical to differentiate Earthlink from the many regional and local ISP's that were ultimately doomed to failure or a bare existence.

A proposed IPO in 1995 with UBS and Piper as the lead underwriter failed for as a Earthlink competator sold as a low price and made the Earthlink valuation look out of line. As Reed commented to one investor "At least we got a prospectus"- i.e. the booklet given to prospective investors listing all pertinent available information. Since the beginning Reed served on the board, the compensation committee and audit committee. He was widely viewed as sophisticated Wall Street and investment banking liaison. He took many phone calls per day from executives Sky Dayton, Gary Beatty, Kevin O’Donnell and other board members and devoted a great deal of time to the venture as it was to be his most profitable.

Subsequently, thru high level contacts legendary investor George Soros apparently introduced Ken Langone to Earthlink and he agreed to underwrite the company and the company went public January 20th 1997, backed by the LangoneInvamed Investment Banking firm at a price of 11 dollars. At some point Reed Slatkin was relieved of his guarantee on the equipment leases. He had received over 200,000 warrants as compensation for the personal loan guarantee- link. Sec documents are confusing and list alternatively Reed Slatkin personally and Reed Slatkin and Associates as the owners of the stock.

With a nationwide footprint the board was beefed up. With George Soros, a beefed up board and a nationwide footprint, Earthlink became a juicy target for Sprint (ticker FON NYSE) who was looking for a way to leverage their telecommunications empire with the exploding internet. The internet usage in the 98 and 99 time frame was growing at 20-40% per month. They initially did a financing in early 1998 in which Sprint purchased 1,250,000 shares from the company at a price of 45 dollars. Sprint did second financing on about Jan 17th 1999 at 73.50. At that time Reeds 2.3 million shares and options listed in the prospectus for the secondary were worth 169 million dollars. Reed sold 200k shares on the secondary. Earthlink was trading 5 to 10 million shares per week.

During 1999 as the buzz about the internet rose to a fever pitch, the stock traded in the 40- to 60 dollar range before falling to 15 dollars in the multi-year internet retrenchment. As Earthlink was a major investment in the fund, its collapse undoubtedly precipitated the ultimate financial debacle that forced bankruptcy.

In addition to Earthlink Reed made several other highly successful internet venture investments. Notable among them was Arcel/Vixcel.