“Special purpose vehicle” will enable indirect investments in Facebook


  • This is the investment opportunity of 2011!

Facebook has received a massive new round of funding: $450 million from Goldman Sachs and $50 million from Russian investment firm Digital Sky Technologies, according to a new report.

As part of the deal, Goldman Sachs will help the social network raise an additional $1.5 billion. To do this, the investment bank will create a “special purpose vehicle” that will allow others to invest in Facebook indirectly. This would help the social network bypass an S.E.C. regulation that requires companies with more than 499 investors to disclose their financial results to the public. IPO doesn’t look any longer as a distant possibility.

Goldman Sachs will be a first-time investor in Facebook, while Russian venture capital firm Digital Sky Technologies had previously invested $200 million in the company Mark Zuckerberg built at a $10 billion valuation. According to the New York Times report, Goldman Sachs has the option to sell $75 million of its stake to DST.

The funds could enable closely held Facebook to attract new staff, develop products, pursue acquisitions, and let some of its employees cash out of their investments in the firm, the Times reported.


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