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Why Did Mark Zuckerberg Pay $20 Million in Facebook Stock for Brooklyn Entrepreneur Sam Lessin?

nymag.com · 335 words · saved by 1 readers

On Friday, Lessin, the founder of Brooklyn-based Drop.io, announced that he would be moving to Palo Alto to join his Harvard buddy Mark Zuckerberg, and that Drop.io’s service — which let users “drop” files of any kind, making them accessible by web, text, and other means — would be winding down. On its face, the Facebook deal looked like any other “acqui-hire” where a large company buys out a smaller one in order to leverage its founder’s innovative pluck. But MediaMemo’s Peter Kafka says Drop.io’s investors were paid back close to double the $10 million they invested and all in Facebook common stock, an increasingly valuable commodity as the company’s valuation rises. (In contrast, this summer when Facebook bought out the start-up Hot Potato, where Lessin was an investor, only founder Justin Shaffer got any equity.) Lessin, whose father is Wall Street investor and fellow Harvard alum Bob Lessin, introduced Zuckerberg to New York bigwigs back when the site was still called thefacebook.

On Friday, Lessin, the founder of Brooklyn-based Drop.io, announced that he would be moving to Palo Alto to join his Harvard buddy Mark Zuckerberg, and that Drop.io’s service — which let users “drop” files of any kind, making them accessible by web, text, and other means — would be winding down. On its face, the Facebook deal looked like any other “acqui-hire” where a large company buys out a smaller one in order to leverage its founder’s innovative pluck. But MediaMemo’s Peter Kafka says Drop.io’s investors were paid back close to double the $10 million they invested and all in Facebook commo

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