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Many pre-IPO investors and shareholders stand to make a tidy profit from Facebook’s foray into the public sector. Board members, angel investors, venture capitalists, and even family members will become millionaires, if not billionaires, overnight in what is touted to be largest tech IPO ever.
Chairman and CEO Mark Zuckerberg will make the most substantial gains, effectively netting a cool $18.7 billion and making him the second-youngest billionaire alive. The youngest? Facebook co-founder Dustin Moskovitz, who stands to make $4.7 billion from his 7 percent stake in Facebook. He left the company in Investors and board members aren’t the only ones with a stake in Facebook. Outside beneficiariesof the IPO include David Choe – whose graffiti art in Facebook’s headquarters netted him some stock that could now be worth hundreds of millions of dollars – as well as Zuckerberg’s father and sister, and his Harvard rivals the Winklevoss twins.
Facebook’s IPO has been one of the most anticipated and talked about of its kind, all made possible by the angels, venture capitalists and global investors who have made big bets on Facebook.
Click ahead to see who Facebook’s investors were pre-IPO, and how much of a stake they have in the company.
By Mary Catherine Wellons and Joseph O'Dell
Updated 18 May 2012
Thiel co-founded PayPal and was chairman and CEO until it was acquired by eBay in 2002. He is a partner at the venture capital firm Founders Fund and was Facebook’s first outside investor, pouring nearly $500,000 into the company – about 10 percent of Facebook’s worth at that time. Today, his investment is worth an estimated $1.2 billion.Along with Facebook, Thiel was instrumental in funding companies such as YouTube and LinkedIn.
Reid Hoffman is an angel investor in Facebook and many other companies, including Flickr, Last.fm, Ning and Zynga. Hoffman is a partner at Greylock and co-founder and executive chairman at LinkedIn. Hoffman invested $40,000 in the first round of Facebook funding. That may now be worth around $425 million.
In May 2005, Accel invested $12.7 million in Facebook, and Breyer put up $1 million of his own in the company, as well. Accel’s 10.7 percent stake in Facebook makes it the largest outside shareholder, and could be worth as much as $6.6 billion.Breyer's personal stake in Facebook comes to about about $400 million.
Breyer, in affiliation with Accel Partners, has helped fund more than 30 Internet, media and technology companies that completed public offerings or successful mergers. Accel's portfolio includes Groupon, Spotify, Dropbox and Etsy.
In 2005, Mark Pincus became an angel investor in Facebook. He holds 5.3 million shares, and with that early bet he now stands to see a paper gain of $186 million.
Pincus is the founder and CEO of Zynga, the world’s leading social game developer, and has earned extraordinary success through Facebook both as an investor and an entrepreneur. Zynga went public in 2011 and the synergistic relationshipbetween Zynga and Facebook propels both companies.
Marc Andreessen has been a Facebook board member since 2008 and is a partner in the venture capital firm Andreessen Horowitz. He owns 6.6 million class B sharesof Facebook, in addition to 5.2 million restricted shares. He will pick up more shares when the Instagram acquisition goes through, as an investor in the photo-sharing app.
Before he became an investor, Andreessen was a web developer and entrepreneur. He developed the first web browser, Mosaic, for the National Center for Supercomputing Applications. He then co-founded what would become Netscape Communications, which produced Netscape Navigator, the world’s most popular web browser until Window’s Internet Explorer surpassed it.
In addition to Facebook, Andreessen has invested in Twitter, Pinterest, Instagram and Digg.
Meritech Capital Partners is a private-equity firm focused on late-stage venture capital investments in information technology. Meritech participated in Facebook’s Series B funding round in April 2006. Currently they hold 40 million shares and planned to sell off 7 million.
Pictured left to right: George Bischof, Joel Backman, Paul Madera, Rob Ward, Craig Sherman and Mike Gordon.
On Oct. 24, 2007, Microsoft took a $240 million equity stake in Facebook as part of an expanded advertising partnership. Microsoft was the sole participant in Facebook’s Series C financing round, earning it a 1.6 percent stakein the company at a $15 billion dollar valuation. Today that percentage translates to more than $1 billion.
Currently Facebook is also involved in the purchase of patents from Microsoft; patents that Microsoft had previously purchased from AOL for $550 million.
Hong Kong billionaire Li Ka-shing made a reported $60 million investment in Facebook in November 2007 and another $60 million in 2008.Li invested at a $15 billion valuation giving him about 0.8 percent stake in Facebook. Li is chairman of Cheung Kong Holdings and Hutchison Whampoa.
In 2009, Yuri Milner's DST Global paid $200 million for a nearly 2 percent stake in Facebook, a deal that, at that time, brought Facebook’s value to $10 billion. Milner went back for more, getting in on Goldman Sachs’ 2011 investment, putting up an additional $50 million of his own money. Along with earlier, large-block purchases of Facebook stock from existing shareholders and employees, DST's stake stands at 5.5 percent which is worth about $4.6 billion.
Along with Facebook, Milner's investments include Twitter, Groupon, Zygna, Airbnb and Spotify.
Elevation Partners made a $120 million purchase of Facebook stock from private shareholders in 2010, on top of a smaller 2009 investment. Those investments will net the firm a nice payday. At the time, the 2010 deal valued Facebook at $23 billion. Now, that 2.2 percent stake could be worth as much as $1.4 billion.
Elevation Partners is a private equity firm with a focus on media, technology and entertainment companies with an extensive portfolio that includes Yelp, Forbes and Move, as well as a network of real estate websites. Co-founders include U2 frontman Bono, Robert McNamee and Fred Anderson, a former Apple chief financial officer.
Goldman Sachs invested $1 billion in Facebook Class A common stock on Jan. 21 as part of an overseas offering. DST and Goldman Sachs also invested $500 million in Facebook Class A common stock in December 2010. This netted Goldman close to 66 million shares, around 30 million of which it will be selling.