Image via CrunchBaseFacebook not going IPO is real bad news for the average investors, people who might buy 10 or 20 stocks at $100 each. The growth in wealth that Facebook might see as it moves from a $10 billion valuation to a $50 billion valuation and beyond, all that is going to rich individuals and institutions. If Facebook had gone IPO at a billion dollar valuation, the 50 billion in wealth creation might have gone to average people. By comparison AOL went IPO at a $100 million valuation.
There is another side to that coin. What if 1,000 people capable of investing $5,000 each teamed up, incorporated a company with the express intention and invested $5 million into your startup? That might change a few things.
This is an instrument I thought about with my last startup early in 2008. I am still very interested in such financial instruments. More people need to look into this.
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