Facebook had only one angel investor, Peter Thiel (the founder of PayPal). Mr. T
ID: 2783298 • Letter: F
Question
Facebook had only one angel investor, Peter Thiel (the founder of PayPal). Mr. Thiel invested more than once in Facebook, both as an angel and, in later rounds, on behalf of investors in his venture capital firm, Founders Fund. As an angel, Mr. Thiel invested $500,000 in September 2004. Assuming that all the shares he received in the angel round were registered under the name Rivendell One LLC, use the information in the prospectus to calculate:
a. The per share price he paid as an angel.
b. The amount of money he received from the IPO (if all shares are sold).
c. The holding period return (using the IPO price) he made on his investment.
Explanation / Answer
Facebook a.The per share price he paid as an angel. $500,000/32,875,670 shares = $0.015 dollars per share. b.The annualized return he made on his investment up to the IPO point (again, using the IPO offer price as selling price). Note that the holding period return is about 92 months in this scenario. APY = ($1,235,533,429.94/$500,000)^(365/2859.1667)-1 = 1.71*100 = 171% c.The amount of money Mr.Thiel would have received from the IPO, if all shares he held under the Rivendell One LLC were sold at the IPO price. The sale of Rivendell One LLC’s 32,875,670 shares would have totaled $1,235,533,429.94 dollars.
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