Marc Andreessen talks about that time Facebook almost lost 80% of its value
FORTUNE: What Yuri Millner did to put Facebook back into the double-digit billions? Yuri came through Silicon Valley in 2008 or 2009 for the first time, and he basically said “I’m in business and I want to invest.”
Top American investors were bidding at the $5, $6 and $8 billion level for Facebook and Yuri came in at $10 billion. “I was on the Facebook side of this and I had friends who were bidding on and I’d call them up to say “You guys are missing the boat, Yuri is bidding 10. You are going to lose this”.
They basically said: “Crazy Russian. Dumb money. The world is coming to an end, this is insane.”
What Yuri had the advantage of at the time, which I got to see, was that Yuri and his team had done an incredibly sophisticated analysis. What they’d basically done is watch the development of consumer Internet busines models since 2000 outside of the U.S., so they had these spreadsheets that were literally across 40 countries — like Hungary and Israel and Czechoslovakia and China — and then they had all of these social Internet companies and e-commerce companies that had turned into real businesses over the course of the decade but completely ignored by U.S. investors. What Yuri always said was that U.S. companies are soft because they can rely on venture capital, whereas if you go to Hungary you can’t rely on venture capital so the companies have to make money. So he had a complete matrix of all the business models across all of these countries and then came all of the monetization levels by user and then all adjusted for GDP.
He had the secret spreadsheet and you didn’t. Read the full article