Precision Advisory - Business Funding

We teach and advise entrepreneurs on practical ways of attracting investors to their businesses/ideas

Precision Advisory - Business Funding

Case Study on Collaboration (Part 3)- The Facebook founders’ dispute
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Around 2006 Facebook had gained significant following and the Company’s CFO Eduardo Saverin believed it was time to monetize Facebook & start generating income from the platform

However, the CEO Mark Zuckerberg believed it was too early to monetize the platform as he strongly believed that the company would be best served if they continued to develop the platform and grow the number of users, so as to get an appropriate valuation from future investors.

He believed that early monetization would compromise their ability to innovate and limit the Company’s future valuation.

This issue almost had a damaging effect as Facebook nearly lost a US$500,000 investment from an early investor, due to the disagreement the Founders had.

The dispute got to a point where Eduardo Saverin closed the company’s accounts, while the early investors were conducting due diligence on the company.

This raised a red flag and could have scuttled the ability of the Company to secure early investors, as a dispute between Co-Founders is a risk that most investors are not willing to bear.



Warm Regards
Simoyan O.O.
Lead Facilitator

The Potential Downside of Collaboration
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In spite of the benefits associated with having a partner, it also has its own challenges. Sometimes, it might actually feel as though you have traded old problems for new problems.


This is because if you have fundamental differences with your partner, in terms of how you perceive the opportunity, it could have a detrimental impact on your ability to execute the opportunity.


Hence, its important to ensure that your partner shares the same values and has a similar perception of the opportunity, otherwise your business could be DOA (DEAD ON ARRIVAL).


In terms of examples the Facebook story comes to mind as the 2 Founders Mark Zuckerberg and Eduardo Saverin had a different view of how to execute the opportunity Facebook presented after they had achieved significant following on most college campuses in the US.


We will examine this in our next post.
Until then, have a blissful week ahead.
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Simoyan P.
Lead Consultant
Precision Advisory