The fight to get a piece of Facebook early on was a brutally intense scramble among many well-moneyed venture capitalists and media executives, according to recently published excerpts from "The Facebook Effect," an upcoming book about the rise of the massive social network by Fortune magazine contributor David Kirkpatrick.
So intense, in fact, that a dilemma over which route to take reportedly left Facebook founder and CEO Mark Zuckerberg crying on the floor of a Palo Alto restaurant's bathroom one evening in the spring of 2005.
"He was just crying his eyes out, bawling," Kirkpatrick quotes early Facebook executive Matt Cohler, who was present at the time, as saying. The issue at hand was that Zuckerberg and Cohler, along with some of Facebook's other early leaders, were out to dinner with Accel Partners' Jim Breyer, whose firm wanted to invest $10 million in Facebook at an $80 million valuation. Zuckerberg, meanwhile, had tentatively already agreed to accept a far less lucrative offer from The Washington Post Company, whose CEO Donald Graham was a personal friend of Zuckerberg's, and was keen on taking the Post deal because Graham was so different from the hordes of "bloodthirsty" (to use Kirkpatrick's terminology) venture capitalists homing in on Facebook as its star rose in Silicon Valley.
Zuckerberg stopped crying. He called Graham to explain the "moral dilemma," and accepted the Accel Partners offer. Graham eventually was given a seat on Facebook's board of directors late in 2008.
At least right now, with Facebook's membership totaling over 400 million active users and its revenue figures starting to creep into the billions, the struggle to get into the money game early on seems justified. But at the time, the fierce struggle to negotiate a deal with an unprofitable fledgling company run by a handful of 20-year-olds must have seemed ludicrous. According to Kirkpatrick's book, in February 2005 Facebook was courted by four major tech companies, 12 venture capital firms, and the Post. Then there was Viacom, whose CEO Michael Wolf wanted to buy the company outright for $75 million, chartering a Gulfstream V jet from San Francisco to New York to take Zuckerberg home for the holidays (and give him the hard sell in the process).
"The Facebook Effect," for which Kirkpatrick worked closely with Zuckerberg and other Facebook insiders, is not to be confused with Ben Mezrich's "The Accidental Billionaires," a scandalous unauthorized book about the rise of Facebook that was published last year. It's Mezrich's book, not Kirkpatrick's, that's the basis for the film adaptation "The Social Network," which is gearing up for a theatrical release this fall.