Venture Capital Jobs Blog

Curated by John Gannon and Team

Posts Tagged ‘Facebook

Great article on evolution of Mark Zuckerberg and Facebook management culture

leave a comment »

David Sze, a venture capitalist from Greylock Capital and investor in Facebook, says he has watched Zuckerberg over the past two years since his investment, and may have underestimated Zuckerberg’s ability to scale. “When I invested, I thought Mark was one in a million. Now I think Mark is maybe one in a trillion.”

Reblog this post [with Zemanta]

Written by John Gannon

October 2, 2009 at 4:59 pm

Posted in Uncategorized

Tagged with

Facebook raising more money, has termsheets, but what of anti-dilution protection?

with one comment

Image representing Facebook as depicted in Cru...
Image via CrunchBase

I just read the Techcrunch report on Facebook‘s latest fundraising activities( Decision Time For Facebook: Term Sheets Received At $2 Billion Valuation).    The report talks about the potential heavy dilution that common stockholders might suffer because of 1) a fairly significant down round (taking pre-money valuation down from $15B to $2B) and 2)anti-dilution protection clauses that would apply to the previous investors’ ownership stakes (which means common would bear the brunt of the dilution).

From the article:

The cost of taking money at such a low valuation is higher than it appears. In addition to the direct dilution to stockholders from the new money, old investors at the $15 billion valuation may need to be made whole. Venture rounds traditionally include anti-dilution provisions that give investors more stock if the company raises new money at a lower valuation. Those anti-dilution provisions are heavily negotiated and can end up anywhere from full protection (which is very rare) to no protection at all (which is also very rare). It’s likely that there will be some form of additional dilution, possibly a lot of it, from the $375 million Facebook has raised at that valuation.

Although the current investors will certainly want to preserve their ownership stake as much as possible in any new deal, new investors are not going to do a deal that they think will drive out key employees and founders in droves.

There are a couple of ways to get around this issue.  The new investors could require the old investors to waive their anti-dilution protection as a condition of investment.  Or, the new investors could require that more common stock options get issued prior to closing.  These options could be use to refresh employees and founders who experienced heavy dilution due to the down round financing.  My guess is that both of these mechanisms will be a part of any new Facebook deal.

Reblog this post [with Zemanta]

Written by John Gannon

April 15, 2009 at 9:14 pm

Posted in Uncategorized

Tagged with , ,

Experimenting with Facebook advertising

with 4 comments

Facebook, Inc.
Image via Wikipedia

I have always done a small amount of Google Adwords advertising (< $20 month) for this blog as well as my business school blog.  Recently I’ve been hearing good things about the performance and cost of advertising on Facebook vs. Google AdWords.  So, I’m going to give it a try and buy some targeted ads on Facebook with the hope of (cheaply) driving more traffic to my blog.

It’s also worth noting that although the advertising I purchase does send some small amount of additional traffic to my blog, the reason for me doing it is to be familiar at a hands-on level with the technologies that affect the industry.  I’m definitely more of a hands on guy and the way I learn best is by doing it.

I will let you know how it goes!

Reblog this post [with Zemanta]

Written by John Gannon

February 3, 2009 at 10:57 am

Posted in Uncategorized

Tagged with , , ,

%d bloggers like this: