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One of Zuckerberg's hacks to re-invent Silicon Valley's approach

[From "How Mark Zuckerberg Hacked the Valley", courtesy BloombergBusinessweek online]

Hack #2
Find low-maintenance overseas investors instead of know-it-all Americans
[At some point] Facebook's growth required even more money. Usually at this stage a startup visits one of the many venture capital firms along Sand Hill Road. But [US] venture capital comes with strings attached. The new investors want a seat on the board, a say in decision-making, and the ability to be the first in line to sell their shares in an IPO or other “liquidity events.”

Zuckerberg was uninterested in sharing decision-making and instructed his moneymen that he would not offer board seats to new investors. 2007, when U.S. investment firms were retrenching, Facebook looked overseas and raised money from Hong Kong industrialist Li Ka-shing and German Internet entrepreneurs the Samwer Brothers. Those investors wanted a piece of the action but, unlike their U.S. counterparts, didn’t care about having a hand on the wheel.


There's no lack of moneys in Italy. There are, instead a bit few exits...

Interestingly enough, though, I am not aware of Venture Capital money coming this way. Even if -instead- investment in real-estate, farming/wineries, distribution companies and even manufacturing units and their brands are not unheard of.

Makes me wonder...


Also makes me wonder if we are getting close to be "drowning in a tsunami of sharing" [CNN], but that's for another post.



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Comment by Giorgio Ghersi on May 20, 2012 at 11:00am

...this also attracted my attention on the day following Facebook IPO day:

"With 2.14B total shares of FB offered (all day yesterday it was 2.47B being offered; 330M have apparently been withdrawn overnight) and a 1B profit last year, projected to be less than that this year, to get a Google level valuation(mkt cap)/profit ratio of 5 (because Google's business model also relies on ad clicks), a FB valuation of 5B is appropriate which would put each of the 2.14B shares at $2.34. At that price, I'll buy. A 85B "valuation" is _INSANE_"

Read more at Business Insider >>


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