The Moral Of The Story Is Never Sell Half Your Company For $1,000
April 12, 2011 at 17:30 PM EDT
Paul Ceglia may just be a con man, or he may turn out to be the greatest tech investor who ever lived. After all, anyone who invested early in Facebook looks like a genius today. Peter Thiel turned his initial $500,000 investment in Facebook into a 10 percent stake that would be worth at least $5 billion today at the latest $50 billion private valuation . Facebook investor Jim Breyer of Accel Partners tops Forbes' Midas List . And now we have Paul Ceglia, a convicted felon who claims that Mark Zuckerberg sold him half of Facebook in 2003 for $1,000, and he has the contract and emails to prove it. He later put in another $1,000 for a total investment of $2,000, but if he gets anywhere close to what he's asking for (half of Zuckerberg's share, which could be worth as much as $10 billion), he could go down as the best tech investor in history. Whatever happens, this incident holds several lessons for any would-be entrepreneur or engineer. In the video above, angel investor and Hunch co-founder Chris Dixon and I discuss what every founder needs to know before they give away any part of their company. The decisions made in the first 6 month usually end up being the most important. The biggest takeaway from this incident: Whatever you do, don't ever sell half your company for $1,000.