Unfriend: What drove Zuck to fire Saverin
Facebook co-founder Saverin dragged his feet in re-forming the company as a Delaware limited-liability corporation, a necessary step for raising money.
There's an interesting, detailed piece in Business Insider this morning about the various fireable infractions that Facebook CEO Mark Zuckerberg felt co-founder Eduardo Saverin committed during Facebook's launch.
While TheFacebook was moving out of the Harvard dorm room where it started, Saverin, who had bankrolled some of the company's expansion, was responsible for the money side. Zuckerberg felt he himself didn't have a head for business, and left it to Saverin.
But when the social network began to take off, and Zuckerberg got into money-raising talks with California investors, Saverin -- who had taken an internship at Lehman Brothers in New York -- became a logistical roadblock. As part owner of the company and the man in charge of the paperwork, he needed to work on re-forming the company as a Delaware corporation so it could accept investments.
He didn't, and that was the key factor that forced his ouster. Zuckerberg, with the help of early investors like Peter Thiel and Sean Parker, formed a new, Delaware company, used it to acquire TheFacebook (which was a Florida LLC), and in so doing stripped Saverin of control of Facebook's future.
This wasn't the first time Zuckerberg and Saverin had been at odds, of course. Previously, Saverin had used Facebook to advertise for his own social startup, a job-finding service called Joboozle. Zuckerberg saw the product as potentially competitive to Facebook and resented Saverin for using Facebook to promote his side project.
Saverin, whose diluted stock in the original Facebook is worth an estimated $3.8 billion,. He's now in Singapore, which does not have a capital gains tax.