In October 2007, Facebook raised $240 million from Microsoft (MSFT) at a then-whopping $15 billion valuation. One year and one financial crisis later, the social network nearly raised its next round of financing at just a $3 billion valuation.
That’s the recollection of longtime Facebook board member Marc Andreessen, speaking to me during an interview during the annual meeting of limited partners in Andreessen Horowitz’s venture capital funds. Ultimately, the deal was “reset” and Russian investor Yuri Millner– utilizing what Andreessen describes as superior analysis — led an investment at a $10 billion valuation. Still a haircut from the Microsoft round, but not nearly so severe. Facebook (FB) would later go public at a valuation of around $104 billion, which has since more than doubled.
Here is the relevant comment from Andreessen, which came in the context of how Andreessen Horowitz thinks about valuations:
You can listen to the entire interview below: