The Rise and Success of Facebook
Mark Zuckerberg and Eduardo Saverin met as freshmen at Harvard University in 2003. Impressed by Zuckerberg’s programming skills, Saverin helped him to launch a college-focused social network that became TheFacebook in February 2004. Intended to connect university students, the website achieved overnight success. In May 2004, entrepreneur Sean Parker, co-founder of the now defunct filesharing service Napster, invested money in TheFacebook, and helped the pair to expand the website to other universities in the United States.
The number of people who had signed up for TheFacebook kept growing, and in August 2005 the company was renamed Facebook. With the help of venture capital, the venture began to grow quickly, launching Facebook worldwide in 2006 and becoming a worldwide sensation of the mid-2000s. By 2009, the company had two billion subscribers and earned a valuation of over $22 billion.
The Battle for Control
Behind this success, however, was a raging battle between Zuckerberg and Saverin over the direction of the company, and the extent to which each deserved equity. Since their initial agreement in 2003, Zuckerberg was essentially the CEO, making the big decisions affecting the company, while Saverin handled the financial and legal aspects of the business.
However, Saverin had become disgruntled when he realized that Zuckerberg had diluting his equity in the company without consulting him, reducing his share of Facebook from 34 percent to less than one percent. Alerted to this, Saverin threatened legal action and made a bid for control of the company. This led to a freeze in transactions and sparked a multi-million dollar legal battle.
The Outcome
The legal battle between Zuckerberg and Saverin was eventually settled in November 2011. At the time, Facebook was listed on the NASDAQ stock exchange and valued at $48 billion. As part of the settlement, Saverin was not only compensated for his stake in the company, but was also awarded $1 billion in stock options.
The legal battle also had a lasting impact on how Facebook went about managing its business. Zuckerberg saw the lawsuit as a chance to transform the company into something bigger, more professional and better prepared for an IPO. After the lawsuit, Facebook redefined its core mission, adopted more professional corporate bylaws and instituted best practices to avoid a similar situation in the future.
Mark Zuckerberg Now
After the Saverin lawsuit, Zuckerberg has gone on to become one of the richest people in the world. His success is largely due to the visionary steps he took to expand Facebook, from college campuses to the rest of the world. He’s also used his newfound wealth to pursue philanthropic goals, such as the Chan-Zuckerberg Initiative, which has invested billions of dollars in health, education and scientific research initiatives.
As of 2021, Zuckerberg is the fourth-richest person in the world, with a net worth of over $100 billion and estimated earnings of over $20 billion each year. He’s now the chairman, CEO, president and the controlling shareholder of Facebook.
Eduardo Saverin Now
As for Saverin, he’s now a venture capitalist and is involved in several businesses, including the Brazilian e-commerce platform Aprova. He lives in Singapore and has a net worth estimated at $11 billion. He’s also involved in philanthropy, donating millions to causes such as American universities, Brazilian health clinics and education initiatives since 2011.
The Impact of the Lawsuit on Facebook
The lawsuit between Zuckerberg and Saverin had a profound impact not only on how the company was run but also on how venture capitalist and technology companies structure their deals now. It also put a spotlight on the issue of controlling shareholder’s power and showed the importance of seeking legal advice when setting up a business.
It’s not a surprise, then, that Facebook is now much more open and transparent, with clearer policies and procedures for managing a business. The Zuckerberg-Saverin lawsuit forever changed the way Facebook does business, and it’s clear that the company has learned from its mistakes and is now a much more professional and formal enterprise.
Influence in Other Silicon Valley Deals
Today, the story of what happened to Mark Zuckerberg and Eduardo Saverin has become a Silicon Valley archetype, used to show developers and entrepreneurs the perils of not being careful when negotiating tech deals. At Stanford University, the agreement between Zuckerberg and Saverin is used to teach budding entrepreneurs how to structure an equity split and how to protect themselves legally.
The lessons of the agreement have become teaching points for venture capitalists, technology entrepreneurs and students across the world. It’s a reminder that even in this day and age, a well-negotiated deal is still paramount, and that taking legal advice can help to protect you and your interests in the long run.
The Enduring Legacy of Mark Zuckerberg and Eduardo Saverin
The story of what happened to Mark Zuckerberg and Eduardo Saverin has gone down in history as one of the most famous tech lawsuits of all time. Despite their complex differences, the two were still able to create a company that has become a global phenomenon and arguably changed the way we communicate and interact with one another.
Facebook has undeniably left its mark on the world, and it’s clear that Mark Zuckerberg and Eduardo Saverin’s legacy lives on. Their story serves as a cautionary tale yet a positive example of the inner workings of Silicon Valley and the success that can come from taking the necessary steps to protect yourself and your interests in any business deal.
The Impact of Facebook on Today’s Society
As the world’s most widely used social media platform, Facebook has impacted the way we communicate and interact with one another today. It has enabled us to easily connect with people, join groups based on shared interests and share our moments from around the globe.
However, it’s not all positive. Facebook has come under fire for being a vehicle for the spread of misinformation, its potential negative effects on our mental health and the vulnerability of user data. It has sparked debates on the need for increased regulation, its role in election interference and its responsibility to ensure a safe and secure online environment.
The Future of Facebook and Social Media Platforms
With major changes in the social media landscape in recent years, there is no doubt that the future of Facebook and other social media platforms is uncertain. The company is facing a number of challenges, including continued pressure to add new features to stay ahead of competition, and the need to continue to protect user data.
As for all social media platforms, the need for greater privacy, transparency and responsibility will continue to dominate the debate. It is clear, however, that the legacy of Mark Zuckerberg and Eduardo Saverin will continue to influence the way we use and interact with social media for years to come.
