This story takes place a few weeks after thefacebook launched.
It was March of 2004 and I was attending an alumni event for Harvard Student Agencies (HSA) – a student run company at Harvard. Being a past president of HSA, I made a point of attending this event just to stay in touch with the students and school. As the evening drew to a close, I asked one of the current HSA managers, “What’s the coolest thing on campus these days?” Her response with conviction was, “Thefacebook. It just came out last month and everyone is using it on campus.” Apparently some sophomores had set up a website intended to be a better online version of the Freshman Facebook – a physical book with the pictures of each member of the freshman class. The Freshman Facebook was the dating (or more realistically, scouting) manual used by all freshmen to keep tabs on the classmates that caught their eye.
Intrigued, I went home and checked out thefacebook.com (which I will now refer to as Facebook). The site was only open to those with a harvard.edu email, but fortunately my post.harvard.edu alumni email worked liked a charm. After logging in and checking out the features, I had an “aha” moment. The founders had made a simple yet brilliant innovation which did not exist on any other social network. They had uploaded the Harvard course catalog into the network so that with a single drop down menu, you could sort the entire network by those taking the same class as you. The limitation of the Freshman Facebook was the limited content and the fact that if an upper classmen caught your eye, there was no reliable way to find out that person’s name or learn more about him/her. But now with Facebook, you could come back from class, go online, sort the network by that class, click through the photos and once you found that person – voila. You could see everything about that person that they cared to share which was a lot more than the Freshman Facebook. Facebook was the killer college dating application.
Since at that time I was at another venture capital firm which invested in start-ups, I was eager to meet the people behind Facebook. Maybe there was an investment opportunity. I looked around the site and saw that it was “a Mark Zuckerberg production”. I messaged Mark and scheduled a meeting for the very next afternoon at Henrietta’s Table – a restaurant at The Charles Hotel in Cambridge, MA. I showed up to the restaurant at 3:00pm and there was Mark Zuckerberg and Eduardo Saverin waiting. We decided to sit outside given the unseasonably warm weather in Boston that day. We ordered some drinks, and they began to tell me the nascent but exciting story of how they, along with some others, started Facebook.
Mark and Eduardo had a complementary aspect to their partnership. Mark struck me as the alpha male. He had a profound confidence about him that exceeded his youth. He exuded killer instinct. He was not shy about sharing his aspirations of dominating the college market. He was also the technical visionary behind the scenes. Eduardo was polite and unassuming. He could have been your college roommate. He was jovial, relational, and likeable. He seemed to be the fast follower. He was also apparently the business mind. While both exuded a certain naivete, they were both convinced that they were going to change the world. They were right.
After that meeting, my mind was consumed with the potential of Facebook. It was only a couple days later that I had a second meeting with Mark and Eduardo. Yet again, we met at Henrietta’s Table – but this time for breakfast. I arrived first, and as Mark and Eduardo came in – it was obvious they had woken up early for this meeting. In fact, Mark’s first comment with a broken smile was that he normally doesn’t get up this early. I was truly appreciative. We got down to business, and I asked Mark and Eduardo about their plans for Facebook and their interest in raising venture financing. They said that they had not yet met with any venture capitalists, but had some initial discussions with a couple angel investors. Mark also expressed his intent to leave school and move to Silicon Valley to lead Facebook full-time. Mark seemed deeply committed to it while Eduardo tried unsuccessfully to project the same confidence. I asked them if they had thought about how much the company was worth. Mark confidently articulated a valuation that some angels had given him. Eduardo stared, paused, and tentatively nodded in agreement.
I invited Mark and Eduardo to my office the next week. While I was unsure of whether this was a good fit with the firm I was at, I decided to take a couple hours that day, and walk them through a blank term sheet. I figured whether we invested in Facebook or someone else did, Mark and Eduardo would benefit from understanding the standard financing terms. I felt a certain obligation to make sure they were educated enough to not sign up to a bad deal. So, we sat there each with a copy of a blank term sheet. I walked through each term and explained in the simplest language what they meant – “preferred”, “voting rights”, “anti-dilution”, “protective provisions”, “registration rights”, “information rights”, “board of directors”, etc. I explained to them the range of options under each, and what was normal. This time Eduardo exuded the confidence. He nodded with assurance after nearly every provision articulating that he knew what that provision meant. He said he had “studied it in school”. I found that to be curious since during my time at Harvard, not a single finance course was offered, let alone one on venture capital term sheets. Maybe things had changed I thought. Nonetheless, I continued to explain things in detail presuming no prior knowledge.
After the session, Mark and Eduardo informed me that they had no transportation home and they had taken a cab to come visit me. Feeling guilty that it never occurred to me that they didn’t have a car, I drove them home myself and paid for their cab fare. We had a nice conversation on the way home. We talked about Eduardo’s girlfriend at Wellesley who he was clearly infatuated with. We talked with Mark about the Bay Area and moving to California, which he was enthusiastic about. And, after the quick drive down the Mass Pike, we took the Cambridge/Allston exit, looped back towards Harvard and I dropped Mark and Eduardo off at Johnston Gate, the main entrance to Harvard Yard.
That was the last time I saw either Mark or Eduardo because an investment ultimately did not work out. Since then, Mark has obviously gone on to change the world – just as he expected to. Mark has accomplished everything he said he would and more. But, when I think back on this experience, a big part of me wonders what happened to Eduardo. I’ve heard about the break-up with Mark early on which makes me wonder what happened behind the scenes. I wonder how Eduardo was treated in the whole process. When people tell the Facebook story now, it seems like Eduardo gets deleted from many versions and included in some. But, from my vantage point, Facebook will always be about Mark and Eduardo. No matter what is written out there, I’ll always believe that Eduardo Saverin is a co-founder of Facebook.
(Eduardo, if you read this, give me a call. Let’s go grab a bite to eat. Henrietta’s Table – I’ll drive.)
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