Tuesday, May 29, 2012

BIG’s Blog: The Billion-Dollar Gift to Fundraisers

A couple of weeks ago, the Internet company Facebook went public. “Going Public” is the term used to describe the process a privately-owned company goes through which allows their shareholders to sell their shares on a public stock exchange. Likewise, it allows the general public to acquire shares (ownership) in the company.

As a private company, there are not a lot of rules and regulations as ownership is somewhat limited. But when a company goes public, there are a lot of disclosures of information that the management of the company must release. Facebook was no exception.

Although there has been a lot of press about Facebook selling initial shares at $38 per share, and the price of the shares subsequently falling (as of the writing of this blog the share price was approximately $33 per share), the hubbub over the stock price misses the bigger point… at least for fundraisers.

The CEOs of companies that are going public always walk a fine line. They clearly believe in the growth prospects of their companies, but they also are aware of potential pitfalls. Mark Zuckerberg, the CEO of Facebook, is no exception. Or, is he?

In financial disclosure documents, where potential investors are interested in the prospects of growth and profits, those topics are typically what CEOs eloquently expound upon.

But Mr. Zuckerberg is decidedly different. Zuckerberg writes in the disclosures that “Facebook was not originally created to be a company. It was built to accomplish a social mission – to make the world more open and connected.”


Did you just read what I read?

The CEO of Facebook is essentially saying, “Look folks, this organization wasn’t conceived to make money but to connect people all over the world. We think we have figured out how to generate profits for investors, but you need to understand up front, profits were not the driving force behind creating Facebook.”

Okay, as a potential investor, you might want to sit back and watch the financial performance of Facebook before investing in it. But as a fundraiser… Hello??

Zuckerberg and Company have just built you a billion dollar platform to connect with people all over the world.

And it costs you how much to use Facebook?


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