We have heard it before and will likely here it again in this case, Facebook will be another company to make 1,000 millionaires -- and a handful of billionaires.
While it first was coined for the Google IPO in 2004, the Facebook IPO is roughly five times the size and will make a mountain of millionaires in the Silicon Valley -- retailers of ostentatious items should start pulling out the yellow Lotus' and personalized private planes in storage now.
According to the filing Wednesday, Mark Zuckerberg owns 533.8 million shares, a 28% stake, in the stock of the company he founded -- for those counting, that is now estimated at near $28 billion. Not too shabby for a 27-year-old.
But even more interestingly, Zuckerberg will also retain a majority control over Facebook Inc. with 56.9% of the voting power. That is a hearty hold on his company, much more than the 36% voting power Mark Pincus snagged when his gaming company, Zynga went public late last year.
So, it looks like Zuckerberg won't be loosening his power over Facebook, even in a public offering -- which is much of what we anticipated.
Who else is getting on the money train
If we use the $100 billion valuation estimate for the shareholders invloved then we edn up with quite a strong group of billionaires in the Facebook catalog.
The former neighboring VC firm, Accel Partners, is now the single biggest outside investor in Facebook with its 10% share after some early investments, including a $12.7 million round that locked in a, then, 15% chunk of the company back when the valuation was under $100 million.
The restaurant entrepreneur, Yuri Milner, has bought stakes in Groupon, Zynga and Twitter, but his companies' (Digital Sky Technologies and Start Fund) early-on investment in Facebook could be the most lucrative.
Milner's companies control an estimated 10% of Facebook.
Former roommate to Zuckerberg at Harvard, Dustin Moskovitz infamously dropped out of his coursework for economics to become the Facebook CTO, but not without his early entrance piece of the pie.
Moskovitz left Facebook in 2008 with a 6% stake, value now near $6 billion.
Eduardo Saverin, one of the three co-founders and a classmate of Zuckerberg's, was initially granted a 30% chunk of the social network before leaving the company a few years back -- but after more rounds of funding taken on -- he now holds a 5% stake as we look toward the company hitting the public markets.
Sean Parker, the founder and edgy young entrepreneur from Napster left the startup in 2005 after some legal troubles but will bank at least $4 billion from his 4% holdings and is already on the road to launching some type of new music service online called Airtime.
The infamous serial investor Peter Thiel was one of Facebook's first significant outside investor ponied up $500,000 in 2004.
Since the early 2000's, Thiel has been on most of the Web's big movers such as PayPal and YouTube, but his board position and 3% stake in Facebook is proving to be one of the best investments he could have made -- now worth up to $3 billion.
Back in 2007, Microsoft invested handsomely into Facebook with a solid $240 million check, giving the computer technology company a 1.6% stake. Not a shabby return, considering that the company made a net income for the quarter ending Sept. 2011 brought in $5.74 billion.
Greylock Partners and Meritech Capital Partners each are standing by with 1.5% of Facebook stock. Both companies were a part of the Series B funding in 2006 that handed $27.5 million to the young social networking company.
While it took a larger bag of money to invest later in the game, U2 frontman Bono's funding company Elevation Partners handed over $120 million to Facebook in 2010 and now has a 1.5% piece of the pie.
The first lady of Facebook, Sheryl Sandberg wouldn't be such a pivotal figure in Silicon Valley if, as the COO of one of the biggest companies, she didn't come out financially set-for-life. In addition to income compensation, Sandberg owns 1,899,986 in common stock and 39,321,041 in restricted stock units, which means she is pocket $2 billion in Facebook stock value when the company goes public.
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Startup/Business
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Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests.
Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.
Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes.
We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.
There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.
In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet.
At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.
Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.
What's next for Twitter?
We continue to focus on building a product that provides value for users.
We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.
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Zynga is the largest social gaming company with 8.5 million daily users and 45 million monthly users. Zynga’s games are available on Facebook, MySpace, Bebo, Hi5, Friendster, Yahoo! and the iPhone, and include Texas Hold’Em Poker, Mafia Wars, YoVille, Vampires, Street Racing, Scramble and Word Twist. The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group, Avalon Ventures, Pilot Group, Reid Hoffman and Peter Thiel. Zynga is headquartered at the Chip Factory in San Francisco. For more information, please visit www.zynga.com.
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Managing Partner, Founders Fund
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