Monday, June 02, 2008

New York Times#more-23655: A Letter to Facebooks Founder

"Memo

From: The Deal Professor
To: Mark Zuckerberg

I read with great interest your recent interview with Kara Swisher at the D6 Conference. I was particularly struck by your answer to Ms. Swisher’s question about whether Facebook, the popular social networking site you created, can be sold by your venture capital co-owners without your approval. Your response: “I don’t think so.”

Your answer made me think of something my own professor at London Business School once said to me: “The day you take a venture capital investment is the day you sell your company.” Venture capital firms are not Warren Buffett — they have limited-term funds and compensation mechanisms that encourage them to exit their transactions once a company reaches maturity.

So, is it true that your co-owners can sell without you or otherwise push through an initial public offering of Facebook without your approval as chief executive officer?"

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