Microsoft Considering a Stake in Facebook and David Sze
I am sure you have read that the new price tag for Facebook may be as high as $13B. The New York Times start their story with a comment on Mark Zuckerberg:
Microsoft Is Said to Consider a Stake in Facebook - New York Times
SAN FRANCISCO, Sept. 24 — Some people laughed at Mark E. Zuckerberg when he reportedly turned down a $900 million offer last year for Facebook, the social networking Web site he founded three and a half years ago….
I personally think the real genious here is David Sze from Greylock Partners. I know at least here in the east coast, when Greylock did the facebook deal at a reported $525M pre-money valuation a lot of people were snickering. I am not sure how it was in the west coast but here is Valleywag’s not so flattering coverage.
It is not over yet by any means but at the reported $13B valuation, if this were an exit, that $25M round of financing would return a whopping 23.6X on the investment. Greylock’s investment - $10M or $15M (I don’t know the exact amount) - would be worth anywhere from $230M to $340M - more money than most venture firms see come back from a single investment in their whole existense. This is still by far less than Accel may make in the end but the timing of David’s investment is what makes it special for me.
I suspect it was a very contraversial investment for the venerable Greylock partnership to get behind. Probably David had to do a lot of selling to get it through, not to mention that a public failure at that price could also be very career limiting. I am not sure what story the facebook team told then, but clearly the company was not what it is today when David had the conviction to invest.
I don’t know David personally but I hear he is a smart and friendly investor. I wish him all the luck to see this gutsy investment through to a succesful exit.