Few entrepreneurs have control over their company by their Series B, let alone when their company is valued at $21 billion - the current valuation (as noted by insiders) for Facebook.
This is the rare situation that Mark Zuckerberg, the young founder and CEO, finds himself in. Unfortunately, for those on Wall Street - salivating for something new and exciting to trade - Mark is as determined to forgo the IPO route as he is to convert the entire world population into transparent humans - with every piece of information about themselves revealed. Yes, while Google wants to collect the worlds data, Facebook is trying to reveal the most personal pieces of it. And, Zuckerberg doesn't want Wall Street influencing his ability to make that happen.
"He doesn't want to do it [go public]," said David Kirkpatrick, author of The Facebook Effect. "One of the oddities of Facebook is that Mark acquired absolute total complete control... it's very, very rare."
Now, David is probably quite a good source on this matter. He did, after all, spend a year with Mark and those closely involved with Facebook, to write his book. "He does what he wants to do," he said. "The VC's cannot tell him what to do. He controls three out of the five board seats."
Mark's vision is to have "everyone on the planet" on his site, David explained. He will object to anyone who "impedes this continued movement toward ubiquity."
Indeed, given his many opportunities to exit, and his patience and wherewithal to move on, Mark has certainly proved that there's more to Facebook than becoming rich. Mark was first offered $10 million in May 2004, said David. After that, he was offered $75 million from Yahoo, who went back later to offer $1 billion in 2006. In 2007, Microsoft's Steve Ballmer offered $15 billion in cash. Mark was 23-years-old, he could have pocketed $5 billion, but he didn't, said David.
To-date, there are more wanting into Facebook than those wanting out, David explained. Peter Thiel, the first investor in Facebook with $500,000 for a 10% stake, sold some of his shares. It's estimated that Peter made $$90 million. "It's the all-time greatest investment in history," said David. But Peter still has a stake. Accel Partners still owns some 10% of the company (or 7.4% to be exact). Accel Partner and Facebook board member, Jim Breyer, owns 1%.
One of the reasons that investors are willing to hang on is because the valuation keeps going up, David explained. Moreover, most investors will pay top dollar just to say they own a piece of Facebook.
"Basically every investment group in the world wants to be able to tell their partners that they’re in Facebook," said David. "People just want the bragging rights."
And, this obviously makes it easy for earlier investors or employees to cash some of their Facebook equity. Places like SecondMarket and SharesPost have been very helpful in providing this liquidity. On SecondMarket, Facebook had a recent valuation of $27 billion, though Accel Partners is pricing Facebook at $21 billion.
But that's nothing compared to what Facebook could be worth as a public company. "I think they could go public today at a $50 billion valuation," said David. "It could be the biggest IPO ever."
Watch the rest of my interview with David as he provides more insight into Facebook's Zuckerberg and the recent lawsuit from someone who claimed to own 84% of Facebook because of a contract Zuckerberg signed back in 2003.