In 1997, Michael Malaga was a successful telecommunications executive with an idea. He wanted to sell broadband Internet access to small businesses in urban areas. DSL technology was just gaining acceptance, and leased telephone lines were available from telephone companies. He wanted to avoid residential customers because they would soon have inexpensive cable modem access to meet their broadband needs. He also wanted to avoid suburban and rural businesses to keep the telephone line leasing costs low (lease charges are higher for longer distances). He and five friends started NorthPoint Communications with $500,000 of their combined saving and raised another $11 million within a few month. After six month, the company had raised more money from investors and had acquired 1500 customers, but it was posting a net loss of $ 30 million. On the strength of its number of customers, the company began the task of raising the $100 million that Malaga estimated it would need to create the network infrastructure.