The company needs a war chest for expansion, and wants to make some strategic acquisitions, but doesn’t have quite enough cash on hand. The young company is growing quickly, but has taken only $35 million in venture backing, with $32 million of that last year. Its revenue is on track to hit $150 million this year, according to its investors.
So why not raise even more money while money is loose and there’s so much hype around Facebook that investors will pay top dollar for a piece of the company? Microsoft and several other companies and investment firms have inquired about an investment, Swisher says.
VentureBeat has heard talk for months about different possibilities for such a round. Several months ago, for example, several large investors were offering to buy a portion of Facebook founders’ shares, in order to give the founders cash now, instead of them having to wait for an IPO. Mark Zuckerberg started the company on a shoestring budget, and hasn’t been able to tap into his success yet. Roger McNamee of Elevation Partners was rumored to be one of the investors.
Investor Peter Thiel has publicly said that Facebook may worth around $10 billion. Thiel also said that the company would not go public until its business was stronger and not until at least 2009.