This former Facebook employee is trying to build the next great investing company like Warren Buffett

Key Points
  • Social Capital Hedosophia aims to raise $500 million in an IPO
  • The holding company will look to buy emerging tech companies that have little incentive to go public
Executive Edge: Palihapitiya creating new tech holding company

Venture capitalist Chamath Palihapitiya is about to try his hand at being Warren Buffett. Or something like him.

Palihapitiya, the founder of Social Capital and former member of the senior executive team at Facebook, is listed as CEO of a new "blank check company" called Social Capital Hedosophia Holdings, according to a filing with the Securities and Exchange Commission on Wednesday.

The holding company is aiming to raise $500 million in an IPO to then go out and acquire emerging private businesses that have little incentive to go public themselves — because of the hassle of quarterly earnings, gyrating stock prices and the constant questions over how they'll compete with Amazon and Facebook.

For reference, just check out the stock charts of Snap and Blue Apron.

"Our mission is to create an alternative path to a traditional IPO for disruptive and agile technology companies to achieve their long-term objectives and overcome key deterrents to becoming public," the filing said.

Palihapitiya has long criticized the traditional venture model and expressed his admiration for Buffett, who has spent more than 50 years building Berkshire Hathaway into a giant publicly-traded holding company, filled with food businesses, insurers and industrial brands.

At a StrictlyVC event in 2015, Palihapitiya said that Social Capital is going to be more like a "bastard stepchild of Berkshire Hathaway and Blackstone and BlackRock" than a traditional venture firm.

One big difference, though, is that Buffett has largely avoided tech companies because he's struggled to figure out how to value them. Palihapitiya's endeavor is all about uniting "technologists, entrepreneurs, and technology-oriented investors," the filing said.

The Wall Street Journal reported earlier, citing people familiar with the matter, that Palihapitiya's team is planning to meet with investors early next month and launch the offering by mid-month on the New York Stock Exchange.

Hedosophia is a venture firm with offices in Hong Kong and London. Ian Osborne, CEO of Hedosophia, will be president of the new holding company. The rest of the management team comes from Social Capital and the board includes former Skype CEO Tony Bates and former Twitter executive Adam Bain.