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Facebook IPO 'best ever': will bring billions to the early birds


By Noel Young, Correspondent

January 30, 2012 | 3 min read

The widely-predicted Facebook launch of an IPO this week is "set to unleash massive paydays in the venture-capital industry," says the Wall Street Journal. And the early birds who were in near the beginning will get the richest pickings.

Thiel: Facebook's first investor

One venture firm, Accel Partners, could hit a record-breaking $9 billion jackpot, according to the WSJ.

A big individual winner could be Facebook's earliest investor, German-born Peter Thiel. In 2002 he sold PayPal for $1.5 billion to eBay.

Hw went on to write a cheque lending Mark Zuckerberg $500,000 for Facebook in 2004 . As the first outside investor, he got a 10 per cent stake in the new company - then valued at a mere $4.9 million.

That investment could have been worth worth from $7 billion to $10 billion after the IPO. But Thiel, 44, now boss of Clarium Capital is thought to have sold shares in private deals.

Thiel is today involved with philanthropic, academic, and cultural pursuits. He is a a primary supporter of the Committee to Protect Journalists, promoting press freedom worldwide. His current stake in Facebook is unclear, said the WSJ.

Other possible big winners in the IPO: Greylock Partners and Meritech Capital Partners, who invested around $12.5 million each in Facebook in 2006 when the company was valued at around $500 million. They could see their stake worth around 200 times that after the IPO.

The likely returns from a Facebook IPO dwarf all previous IPOs

In 2004 Sequoia Capital and Kleiner Perkins Caufield & Byers, each put $12.5 million into the Google start-up. They saw their investments swell to around $2 billion.

Professor Steve Kaplan, of the University of Chicago, told the WSJ, "There's a great chance of Facebook being the single-best venture investment ever". Professor Morten Sorensen, at Columbia University's Business School predicted Facebook was set to be "the highest return I've ever seen."

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