All about the Benjamins, or How Mark Zuckerberg cemented control of Facebook $100 at a time
But for Facebook co-founder Mark Zuckerberg, a C-Note was the key to cementing his control over the social networking phenomenon.
As we learned last week when Facebook filed its prospectus for a $5 billion initial public offering, Zuckerberg has the voting rights to shares owned by some of Facebook’s biggest stakeholders, including venture capital firm Accel Partners, Digital Sky Technologies and former Facebook President Sean Parker.
In an amended filing on Wednesday, Facebook provided a little more color about the agreements that contributed to Zuck’s controversial control of 57 percent of the company’s voting shares.
Most intriguing was the price that Zuckerberg paid each of the various shareholders in exchange for handing him their voting rights: $100 in cash.
That’s not a typo.
One hundred bucks may seem like a pittance for such an important right. But it’s possible that the $100 payment was merely a formality, and that forfeiting voting rights to Zuckerberg was the real price of admission for (the raging horde of) investors seeking to buy into Facebook.
The fact that Zuckerberg appears to have obtained such agreements from some of Facebook’s earliest investors suggests that even as a young college-age entrepreneur, he had a sense of how big his dorm-room project could one day become, and was astute enough to not let opportunity slip through his fingers.
Speaking of Facebook’s early days, anyone who saw the David Fincher film The Social Network knows the name Eduardo Saverin, the fellow student who helped start the company, but was pushed out and embroiled in a bitter dispute with Zuckerberg.
It turns out Saverin was one of the people who sold shares to Russia’s Digital Sky Technologies. The amended prospectus, filed Thursday, refers to a “Saverin Agreement” in connection with DST’s stake, though it does not provide many details.