Facebook Millionaires Eye New Exploits

3 Feb, 2012

The Facebook IPO will give birth to a new generation of young millionaires in Silicon Valley and a handful of billionaires, several of whom have yet to hit their 30th birthdays.

While there will surely be a race to the real estate market, and a rash of yacht purchases, the new Facebook rich are largely expected to remain focused on the geeky exploits that made them their millions – investing in new technology ideas and philanthropic ventures.

Former Facebookers vow that there will be a "Facebook Mafia", a group of engineers from the social network that will invest in each others' new start-ups after they leave the company, similar to the high-profile band of PayPal founders "the "PayPal Mafia" – that went on to launch a string of hot internet companies after theirs was acquired by Ebay.

"We'll be reinvesting quite a bit in these Facebook Mafia companies, and into the Valley itself," said Dustin Moskovitz, who cofounded Asana, a work collaboration tool, with fellow Facebooker Justin Rosenstein, after both left the social network. "We're supporting each other,"

Mr Moskovitz, 27, will be among the most highly paid in the IPO, holding 7.7 per cent of Facebook at an estimated value of $6.1bn. Mark Zuckerberg, also 27, is of course, the highest. His 28.4 per cent stake in the company is worth an estimated $22.7bn.

Both signed on to Warren Buffett and Bill and Melinda Gates' Giving Pledge long ago, vowing to donate half of their lifetime fortunes to charity. Mr Moskovitz and his girlfriend, Cari Tuna, started their own foundation last year, called Good Ventures.

Mr Zuckerberg made a surprise $100m gift to the city of Newark, New Jersey in 2010, and is expected to focus his charitable efforts on education. Though for now, he will hold on to virtually all of his shares and continue running the company.

On the one hand, today's youthful rich are learning from their predecessors. Mr Gates was criticised for not donating his money sooner in his career. But younger generations are more culturally attuned to giving back.

"If you're attracted to technology, you're attracted to solving problems – that's what leads [computer engineers] to charity," said Stacy Palmer, editor of the Chronicle of Philanthropy. "Certainly, every fundraiser will be coming after them."

The culture of the 1990s' internet boom was much more materialistic. Tech entrepreneurs and employees were known for seeking to make a quick buck; buy a mansion, buy a Jaguar and retire young.

Some Facebookers will certainly find ways to enjoy their winnings. Sean Parker, 32, Facebook's first and shortlived president, is known for appreciating a good party. His earnings from the IPO, while not disclosed, are estimated in the billions. He has also dipped his hand into philanthropy, but seems mainly focused on a handful of other ventures, including launching Airtime, a social video company, and serving as a partner with the Founders Fund, Peter Thiel's venture capital firm.

Another category of Facebookers, particularly those with families, will be looking to buy new homes or save for their children's university educations.

Real estate agents and private equity managers hold high hopes for the financial impact of the IPO.

"The residential market is already hotter," said Jon Faller of Faller Real Estate Partners in San Francisco. "A lot of these young folks are making so much money, and they're coming in and buying all this real estate for cash."

Regardless of how they spend their winnings, few Facebookers are expected to retire early. Some will stay at the company, others will start their own ventures. Most will stay seated in front of a computer.

Asked what he might do with any IPO money, a former Facebook engineer said: "Umm. Buy some socks? I need some new socks."

(Additional reporting by Richard Waters in San Francisco.)

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