The Accidental Billionaires

by Ben Mezrich

  Eduardo had been more than a little surprised by that; first, from the papers he’d signed, he was pretty certain that he didn’t have the ability to sell stock—his shares didn’t vest for a long, long time. So why were Mark, Sean, and Dustin able to cash out two million dollars’ worth? Hadn’t they signed the same papers as he had, during the restructure?

  And second, why was Mark talking about selling shares at all? Since when did Mark care about money? And why did Sean Parker get to make two million bucks when he’d been a part of the company officially for about ten weeks? Eduardo had been there since the beginning.

  It certainly didn’t seem fair.

  Maybe Eduardo was simply misunderstanding the situation. Maybe Mark would clear things up when Eduardo met with him in California. In any event, Eduardo had decided he wasn’t going to let his emotions take over this time—since his anger hadn’t exactly helped the situation back during the summer. He was going to be calm, rational, and understanding. It was spring, the skirts were out, and school was almost over.

  Tomorrow, Eduardo would make the six-hour trip, check out the new offices that were under construction, attend that business meeting, and train that new hire, whoever he was. Hopefully, it would be the beginning of things going back to normal between him and Mark—so that when he graduated, he could go right back to his old role as Mark’s founding partner. The idea was pretty pleasing to him—because in a way, it meant he could extend his college life even further, because as big a company as Facebook became, Eduardo was pretty sure it would always feel like college to him. At Facebook, he could keep on postponing the real world, just like Mark was doing, maybe forever.

  Eduardo was warmed by that thought as he started down the library steps toward the Yard. Tomorrow, he’d be back with Mark—and Mark would explain everything.

  Eduardo would remember the moment for the rest of his life.

  He started to shake as he stood there in the mostly bare office, staring down at the papers that the lawyer had handed him the minute he’d walked through the door. It was a different lawyer, this time, and it was a different door; not the dormlike sublet in a leafy suburb, but a real office, on University Avenue in downtown Palo Alto, with glass walls, maple-covered desks, new computer monitors, carpeting, even a staircase covered in graffiti by a local artist who’d been commissioned for the task. A real office, and another real lawyer—standing between Eduardo and Mark, who was somewhere inside, at one of the computers, where he always seemed to be, safe in the glow of that goddamn screen.

  At first, Eduardo had thought the guy was joking, greeting him with more contracts to sign, even before he’d had a chance to check out the place, or ask Mark about the new hire, the two-million-dollar stock sale, the e-mail. But as Eduardo started to read the legalese, he’d realized that this trip to California wasn’t about a business meeting.

  This was an ambush.

  It took Eduardo a few minutes to understand what he was reading—but as he did, his cheeks turned white, his skin going cold. Then full realization hit him like a gunshot to the chest, shattering him from the inside out, destroying a part of him that he knew he’d never get back. No amount of hyperbole, no adjectives, no words—nothing could describe what it felt like—because even though, deep down, he should have seen it coming, he should have known, goddamn it, he should have seen the signs—he simply hadn’t. He’d been so fucking blind. So fucking stupid.

  He simply hadn’t expected it from Mark, from his friend, from the kid he’d met when they were two geeks in an underground Jewish fraternity trying to fit in at Harvard. They’d had their problems, and Mark had the ability to be pretty cold, pretty distant—but this was way beyond that.

  To Eduardo, this was a betrayal, pure and simple. Mark had betrayed him, destroyed him, taking it all away. It was all right there, in the papers in his hands, as clear as the pitch-black letters imprinted on those ivory-white pages.

  First, there was a document dated January 14, 2005—a written consent of the stockholders of TheFacebook to increase the number of shares the company was authorized to issue up to 19 million common shares. Then, there was a second action dated March 28, issuing up to 20,890,000 shares. And then there was a document allowing the issuance of 3.3 million additional shares to Mark Zuckerberg; 2 million additional shares to Dustin Moskovitz; and over 2 million additional shares to Sean Parker.

  Eduardo stared at the numbers, rapidly doing the calculations in his head. With all the new shares, his ownership of Facebook was no longer anywhere near 34 percent. If just the new shares had been issued to Mark, Sean, and Dustin, he was down to well below 10 percent—and if all the authorized new shares were issued, he’d be diluted down to almost nothing.

  They were diluting him out of the company.

  The lawyer started to talk as Eduardo looked at the papers. Eduardo wondered what Mark would expect him to do. Or maybe Mark didn’t think Eduardo was going to have any reaction at all. Maybe Mark believed that Eduardo had already left the company a long time ago—back in the fall, when he’d signed the papers that had made all this possible. Or maybe even earlier than that, during the summer, after he’d frozen the bank accounts. Two different wavelengths, two different points of view.

  The lawyer droned on, explaining that the new shares were necessary, that there were interested VCs who would need them, that Eduardo’s signature was a formality, that the shares had already been authorized anyway, that it was good and necessary for the company, that it was a decision that had already been made—

  “No.”

  Eduardo heard his own voice reverberate through his head, bounce off the glass walls, up the graffiti-marked staircase, throughout the near-empty office.

  “No!”

  He refused to sign away his ownership of Facebook. He refused to sign away his accomplishment. He had been there in the beginning. He had been in that dorm room. He was a founder of Facebook and he deserved his 30 percent. He and Mark had an agreement.

  The lawyer’s response was immediate.

  Eduardo was no longer a member of Facebook. He was no longer part of the management team, no longer an employee—no longer connected in any way. He would be expunged from the corporate history.

  To Mark Zuckerberg and Facebook, Eduardo Saverin no longer existed.

  Eduardo felt the walls closing in around him.

  He had to get out of there.

  Back to Harvard. Back to the campus, back home.

  He could not believe what he was hearing. He could not believe the betrayal. But he had no choice, he was told. The decision had been made, he was told—made by Mark Zuckerberg, the founder and CEO, and by the new president of Facebook.

  Eduardo had one more thought as the horrible news washed over him.

  Who the hell was the new president of Facebook?

  When he thought about it, he realized he already knew the answer.

  Sean Parker hit the sidewalk soles first, launching himself out of the BMW with a burst of pure, frenetic energy. His brain was moving at ten thousand rpm’s, even faster than usual, because he was, metaphorically, on his way to the sweetest dessert of his life.

  He slammed the car door shut behind him, then stepped to one side, leaning back, arms crossed against his chest. He looked up at the glass-and-chrome building that housed Sequoia Capital’s main offices. God, how he hated this place. He remembered, with more than a little irony, how different he had once felt—how he’d once come here, looking for funding, for a partnership, for attention, for anything. How he’d gotten that attention—and had ended up out on his ass, pushed out of the company he’d started himself, that he’d built with his own sweat and tears.

  How different things were now. This time, it was Sequoia doing the begging. Call after call, they’d hounded the Facebook offices, trying to set up a meeting, trying to get Mark on the phone, trying to get him into a room for a pitch. Hell, everyone was calling now, all the big names. Greylock, Merritech, Bessemer, Strong, everyone. A
nd not just the VCs. There were already rumors growing that Microsoft and Yahoo were watching. And Friendster had already made an informal offer; ten million—chickenshit money—which Sean and Mark had easily turned down. MySpace was interested as well—hell, everyone wanted in now. And Sequoia, the biggest boy on the block, certainly didn’t want to be left out in the cold.

  So Sean had stalled them awhile, picturing Moritz stewing in his secluded lair, shouting at his peons in that bizarre, villainous Welsh accent. Sean guessed that by now, Moritz must have known that he was behind Facebook’s reticence to meet and greet; but in Sean’s view, the megalomaniac probably thought Sean would give in sooner or later. And just when they were frothing at the mouth, Sean had seemingly done exactly that, setting up this morning’s meeting.

  Now here he was, grinning like a crazed monkey. He was dressed all in black, like the car, from his thin DKNY pants to his crocodile belt. Batman, out for justice, hitting the streets of downtown San Francisco to set things right again.

  He heard the driver’s-side door slam shut, and turned to see Mark coming around the front of the car.

  “Sweet Jesus,” Sean murmured—and his grin turned into a full-throttled laugh.

  Mark was dressed in brightly colored pajamas, his laptop under his arm. His hair was a complete mess, but there was a serious look on his face.

  “You sure about this?”

  Sean laughed even louder. Oh yes, he was more certain about this than anything he’d ever done before.

  “It’s perfect.”

  Then Sean glanced at his watch. Really, perfect.

  Not only was Mark showing up ten minutes late to a meeting with the biggest venture capital firm in Silicon Valley, but he was going to walk in there like the craziest motherfucker in town. Sean wasn’t going to go to the meeting—that would have simply been too much, even for him—but Mark would be able to handle himself just fine. Mark was going to apologize, tell ’em he had overslept, and hadn’t even had time to get dressed. Then he was going to launch right into his pitch. When he was nearly finished, he’d open up the PowerPoint that they had concocted especially for the Sequoia boys—and what was on the PowerPoint was going to twist the knife in even deeper. And then Mark was going to walk right out of there.

  Seqouia Capital would never—never—have the opportunity to invest in Facebook. Sean would make sure of that. Mark had seen exactly what Moritz and the Sequoia boys had done to him, kicking him out of Plaxo, cutting him off at the throat. And Thiel was in utter agreement—because Sequoia had treated him badly during the PayPal days as well. Sequoia would learn the ultimate lesson of this small town: what goes around comes around.

  And Mark and Sean wouldn’t feel a thing, because everyone wanted a piece of Facebook, now. Sure, they’d turned down Friendster—but there was one deal waiting in the wings that they both knew they were going to accept. Accel Partners, one of the most prestigious VC firms around, had been chasing them for weeks. Whenever Jim Breyer, Accel’s leading partner, one of the most brilliant VCs in the business, called, Sean had grabbed the phone and screamed crazy numbers at him. One-hundred-million valuation or nothing! Two hundred million or bust! And Breyer had finally gotten the picture.

  Simultaneously, Mark had also been talking a lot with Don Graham, the head of the Washington Post Company, a man that had become somewhat of a friend and mentor to Mark; it was an interesting pairing, an interesting idea—that of a media titan with the genius behind a social revolution built on the sharing of information. Mark was considering doing a deal with Graham and the Washington Post—which had pushed Accel to get even more serious, and the wind was beginning to blow clearly.

  Very soon, Accel was going to invest close to thirteen million for a small stake in the company—an investment that would put Facebook’s valuation at close to one hundred million dollars. After only fourteen months. One hundred million. And that, too, was just a starting place. Within six months, Sean was certain they would triple that valuation. By the end of 2005? Who knew where they could be? If people continued to sign up at the current rates, they’d be at fifty million users within a year.

  Sean had a pretty good feeling that his billion-dollar baby was about to be birthed.

  He grinned as Mark walked past him, heading slowly toward the Sequoia building. Part of him wished he could attend the meeting with Mark—but it was good enough, just picturing it in his mind as it took place. He gave Mark a final wave of encouragement.

  “This is going to be great.”

  Then Sean took one more look at those pajamas—and laughed out loud.

  This was going to be fucking awesome.

  “Ten thousand men of Harvard…”

  Eduardo’s knees cried out as he twisted his lanky body beneath the heavy folds of the black polyester gown, trying to find a comfortable position against the little wooden folding chair beneath him, trying to somehow fit his long frame into that tiny space, jammed as he was between similar chairs on all four sides. It was ridiculously hot beneath the gown, and it didn’t help that the stupid square hat on his head was at least two sizes too small, pinching at the damp skin of his forehead and yanking strands of his hair out by the roots.

  Even so, Eduardo felt himself smiling. Even after everything that had happened, he was smiling. He looked to his right, down the long row of his classmates in their matching, jet-black gowns and silly hats. Then over his shoulder—at the row upon row upon row of similarly attired seniors, stretching halfway back across the Yard, right up to where the black gowns gave way to light summer blazers and khaki pants, to the colorful sea of proud families with their cameras and their digital video recorders.

  “Ten thousand men of Harvard …”

  Eduardo turned back toward the stage, which was a good ten yards ahead of him. President Summers was already behind the podium, flanked by his deans, a huge bin of diplomas to his right. Any minute now, the microphone on the lectern in front of the president would burst to life, and the first name would echo through the Yard, bouncing off the ancient brick buildings covered in ivy, reverberating over the stone steps of Widener, rappelling up the library’s great Greek pillars, up into the aquamarine sky.

  It had been a long morning already, but Eduardo was filled with energy—and he could tell that his fellow seniors felt equally alive, fidgeting anxiously against the little wooden seats.

  The day had begun early, with the march from the River Houses—the long line of seniors garbed in black gowns traipsing through Harvard Square and down into the Yard. Although it was hot outside, Eduardo had his jacket and tie on under the gown. After the ceremony, he was going to spend most of the afternoon with his family. He wasn’t quite sure where they were in the gathered audience that stretched out behind where the seniors were sitting, but he knew they were there.

  In truth, the entire Yard was packed with people—more people than Eduardo had ever seen in one place, outside of the odd rock concert he’d gone to in high school. And they’d be there all day. Later that afternoon, John Lithgow, the actor and Harvard grad, would be speaking. Before that, the graduating seniors would gather on the steps of Widener for a class photo. They’d go to a picnic with their families, and then they’d say good-bye to one another and to the school. Maybe some of them would throw their square hats into the air—because they’d seen the clichéd act on television, and well, the hats were pretty stupid anyway.

  Eduardo turned his attention back to the stage. He was immediately impressed by all the color, the stark contrast to the sea of black that surrounded him. The university marshals, the tenured professors, the honored alum—they were all present now, lined up behind the president in their bright, nearly psychedelic gowns. Eduardo’s gaze slid back to that bin of diplomas. He knew that somewhere in that mountain of rolled paper sat a diploma with his name on it; a curled, Latin-embossed page that had cost his parents more than a hundred and twenty thousand dollars.

  In some ways, that diploma had cost Eduardo much, much mor
e.

  “Ten thousand men of Harvard …”

  The melody was coming somewhere from Eduardo’s left. He couldn’t believe that someone actually knew the words to the old college fight song. Well, some of them anyway—whoever it was, the guy was humming his way through most of the tune. Eduardo did actually know the words, because he’d learned them his freshman year after the marching band had sung the song during the Harvard-Yale game. He’d been pretty gung ho “Crimson” at the time, so proud that he was a part of this history, this university. So proud, because his father was so proud, because all the hard work of high school had paid off. The difficult road—learning a new language, fitting into a new culture—had led to this place, this beautiful Yard embraced by these historic buildings. He had learned the song because this was his moment, as much as it belonged to anyone who’d ever stood shoulder to shoulder in this place. He’d earned it, every second of it.

  Ten thousand men of Harvard want vict’ry today,

  For they know that o’er old Eli

  Fair Harvard holds sway.

  So then we’ll conquer old Eli’s men,

  And when the game ends, we’ll sing again:

  Ten thousand men of Harvard gained vict’ry today!

  He turned his attention back to the stage. Summers was almost ready behind the lectern, his wide, jowly face just inches from the microphone. Eduardo knew it would take them a while to get to his name, and when they did, he also knew that the president would probably mispronounce it. Leave the O off the first part, or lean heavily on the second syllable of the last. He was used to that, and he didn’t care. He was going to march up there and get that diploma, because he deserved it. That was how the world was supposed to work. That was fair.

  Just as the microphone burst to life and the first name was read, a flash went off from somewhere behind Eduardo, a high-powered camera catching the first senior on his way to the stage.