Only one year after Sun was formed, another company destined to make a big splash in the networking world was also based on work done at Stanford. Cisco, founded by husband and wife Len Bosack and Sandy Lerner, started experimenting with connecting their two detached networks located in two different buildings on campus. With the help of two other Stanford staff members, Bosack and Lerner ran network cables between the buildings and connected them first with bridges and then routers.

Bosack's router was really an updated IMP, which would transmit only the traffic that was meant to get out and accept only the traffic that was meant to get in. Bosack and Lerner designed and built routers in their house and experimented using Stanford's network. When word got out about their routers, other universities and research centers asked to buy them. Bosack and Lerner went to Stanford with a propositio

n to start building and selling the routers, but the school refused. Bosack and Lerner knew they had something worthwhile, so they founded their own company and named it "Cisco," taken from the name of the city to the north.

Their house became company headquarters and every room was used for building, testing, manufacturing, or shipping. They had no capital, so they charged all the startup costs on their credit cards. However, even without a real sales staff, they started to make a profit very quickly. When they were pulling in hundreds of thousands of dollars every month, they decided it was time to act like a real business, and they needed help recreating their company.

They went to several venture capitalists and made their pitch, but all refused until the 77th:

"At that point I think we were -- Cisco was doing, I think, a quarter million, maybe 350,000 a month without a professional sales staff and without an official conventionally recognized marketing campaign. So it wasn't a bad business just right then. And so I think just for the novelty of it, the folks at Sequoia listened to us."

Don Valentine was an experienced venture capitalist with such companies as Apple and 3Com in his portfolio. He saw great potential in Cisco and he was impressed with Bosack's and Lerner's enthusiasm. However, he wanted to hire some experienced management to run the business - something venture capitalists call "adult supervision."

"The commitment we jointly made to each other is that we at Sequoia would do a number of things. We would provide the financing, we would find and recruit management, and we would help create a management process. None of which existed in the company when we arrived."