For posterity's sake let's make this clear: the SEC rule regarding 500 owners is as follows:
> Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports. These reports are available to the public through the SEC's EDGAR database.
Source: Securities Act of 1934, paraphrased in http://www.sec.gov/about/laws.shtml
It requires firms to file special reports. The reason why people presume that it means that the firm must go public is simple: there are only a few additional requirements to go public, and the economic advantages in many cases outweigh the paltry effort.
For posterity's sake, this is worth repeating: THERE IS NOTHING FORCING A FIRM TO GO PUBLIC. NOTHING.
So the banker who expected Zuckerberg to bow and scrape was still badly mistaken. Zuckerberg isn't really "asking investors for their money" in the IPO, because he doesn't really need that money. That's the point.
Facebook might not have been "forced" to go public, but they still don't really need the cash from the IPO
If facebook actually did need the cash, why wait until they hit the 500 investor limit? Hitting that limit is clearly playing a role in the timing of the IPO, even if it didn't "force" an IPO.
If the exit wasn't important, they would stay private and run the business.
What's the percentage of firms with >500 investors that don't IPO?
I wonder if increasing the number of investors past 500 is more about using equity as a recruiting/retention tool than it is about cash.
I think we can agree on the two facts, namely:
- the firm probably doesnt need the cash
- the members of the firm and investors do want the exit provided by an IPO
[1]Facebook revealed in a document sent to potential investors in early 2011 that it was planning to increase its number of shareholders to more than 500. This will force the social networking site to either disclose a lot of financial information or go public by April 2012 -- which is 120 days after the end of Facebook's last fiscal year[2]. Typically the forced disclosure of financials triggers companies to go public, listing their shares on an exchange and, hopefully, cashing in. - http://www.wired.co.uk/news/archive/2012-01/31/facebook-ipo-...
[2]The 500 shareholder threshold forces companies that have more than 499 investors to divulge information about their financial performance. Although the company may still remain private, it must file similar documents to those of public companies. If the number of investors falls back below 500, then the disclosures can be omitted. - http://www.investopedia.com/terms/5/500-shareholder-threshol...
(I am personally a big fan of Costco for rebuffing Wall Street's cries for higher prices and lower worker compensation and benefits)
And we can speculate all you want, but I'm under the impression that Facebook is primarily doing an IPO, because the SEC is forcing them to do so (500 investor rule). That and well, I think some people want to get paid.
This is just one possible explanation, but you shouldn't assume he's being a jerk for jerkiness's sake. Also, I'm sure whoever is negotiating with him is commanding a fat paycheck and used to negotiating through situations far more difficult than a dude wearing a hoodie. Bankers tend to just like to complain.
Finally, I'd be mildly surprised if you used underdressing to interviews as a successful tactic. (EDIT: underdressing means dressing lower than expected, not dressing down in general.)
Is it really ironic that they STILL don't trust them?
http://www.quora.com/The-Social-Network-2010-movie/What-did-...
http://www.betabrand.com/executive-pinstripe-hoodie.html
http://www.betabrand.com/favorites/gray-dress-pant-sweatpant...
> to treat contemptuously <flaunted the rules
> Although transitive sense 2 of flaunt undoubtedly arose from confusion with flout
He is absolutely blind to how little his money actually gets him. There is two much money (which is what happens when the FED prints money) chasing too few good investments that needs them (which is what happens when the price to run a company keeps going down).
But yeah, he just cannot fathom that money are not as important and that he by proxy isn't going to be as important.
Zuck May not have much value if he doesn't raise the money. Wasn't that the major reason why most investors gave him the money at the first place (or any other company in that matter)? To IPO and XX-fold their investments.
Okay, so he didn't. What are they going to do? Complain about it?
Anyway, ethics is about what people should do. If you switch to discussing what people can get away with because of power, you're no longer discussing ethics. If you switch back and forth, using "what X can get away with" standard for people with power and "what they should do" for everyone else, then there is something wrong with your argument.
If you "come for money", you're doing it wrong. You should come for a mutually beneficial business transaction, and that seems to be exactly what Zuckerberg is doing.
Christ, what an asshole.
It's a negotiation tactic, one many of us use in interviews: by flaunting social convention and dressing down, you're signaling that you have leverage. Mark is the one being wooed, and not the other way around.
By whining about it in the press it just makes it sound like this fellow just isn't used to being the lowest status person in the room.