After a VP job at AOL, Vince Thompson was Facebook ad sales boss for about six months before leaving in 2006.
And yet, he was probably the very first Facebook employee (cofounders aside) to become a millionaire thanks to the hot startup. We don't mean a paper millionaire. We mean the kind with lots of cash in his bank account.
Bloomberg BusinessWeek's Brad Stone reports that Thompson, who, after he left Facebook wanted to sell his shares but found it very hard to do, is one of the few people responsible for getting the whole secondary market phenomena going.
Who would buy his shares? How could any outsider value a small, private company with hardly any revenue?
One banker introduced Thompson to a New York firm called Restricted Stock Partners, which in mid-2007 had a small office near Battery Park with two windows that looked onto a brick wall. The firm specialized in facilitating trades of illiquid securities, such as assets of bankrupt companies and preferred shares in public companies whose holders have special rights. Moving Facebook stock would be an altogether different kind of transaction, but the tiny firm had been looking for a chance to break into the market for private-company stock.
The resulting experiment stretched out several months, primarily because prospective buyers couldn't come to terms with Thompson on a price. Finally, using Microsoft's (MSFT) $240 million investment in Facebook in October 2007 as a guidepost, a hedge fund purchased the shares at a price that valued the fledgling social network at $7.5 billion. The trade netted Thompson and his partner millions of dollars.
That sale—among the very first of its kind—sent shock waves through the insular world of Facebook employees and investors. Facebook shareholders could get rich regardless of the company's plans for an initial public offering. Soon other former Facebookers were buzzing about the opportunity, and investors and employees at other pre-IPO firms started thinking about cashing out their holdings as well.
The whole Bloomberg BusinessWeek story is worth a read, and you should check it out here >>
Related: Meet Facebook's (soon-to-be) Billionaires >>
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