Tag Archives: Cameron Winklevoss

When the founders of ConnectU decided to sue Facebook, it was around the same time that the company was given a $15 billion valuation based on Microsoft’s $240 million investment in the social network.  Today Facebook has denied that they are worth anything close to that $15 billion according to court documents.  An appraisal company pegged Facebook to be worth $3.7 billion.

When Microsoft invested $240 million into Facebook in exchange for 1.6% equity, the company believed that Facebook’s stock was worth $35.90 per share.  This figure was used when ConnectU sued Facebook.  Facebook lawyers believe that the settlement with ConnectU should not be based on an comparison with Microsoft’s investment because the software giant bought Series D preferred stock.  The Microsoft investment also was a premium because they were interested in deeper ties such as becoming an advertising and search technology partner.

Yesterday it was revealed that ConnectU received about $65 million as part of the settlement according to a statement made by the former law firm representing them.  Cameron Winklevoss, Tyler Winklevoss, Divya Narendra created ConnectU at Harvard University before Facebook was created.  Facebook cofounder Mark Zuckerberg was hired by the three ConnectU founders as a developer.  Zuckerberg allegedly took the code from ConnectU and manipulated it to create Facebook.

However court documents revealed that ConnectU was payed $20 million in cash and 1,253,326 shares of common stock in Facebook worth about $45 million, based on Microsoft’s valuation.  That $45 million in stock is worth $11 million based on Facebook’s own appraisal.

Cameron Winklevoss, Tyler Winklevoss, Divya Narendra of ConnectU have received $65 million as a lawsuit settlement from Facebook.  The lawsuit accused Facebook CEO Mark Zuckerberg of stealing the idea for Facebook from them.  Although the settlement amount was supposed to be private, the financial settlement was still leaked by the law firm representing ConnectU itself.

“WON $65 million settlement against Facebook” stated a .pdf from Quinn Emanuel Urquhart Oliver & Hedges’ January business litigation newsletter.   ConnectU fired Quinn Emanuel last year and are now dealing with a fee fight.  Quinn wants $13 million as part of a contingency agreement.

“Sixty-five million is a significant sum — it’s certainly more than the cost of the defense,” stated Chris Scott Graham, IP litigator for Dechert. “But it’s a very small percentage of [Facebook's] valuation and therefore could be argued by Facebook to be a payment based on considerations other than the merits of the claims.”  Dechert was not involved in the case.

Cameron Winklevoss, Tyler Winklevoss, Divya Narendra came up with the idea of ConnectU as part of a daing website idea at Harvard University.  They hired Zuckerberg to code the idea.  Instead, Zuckerberg took code and created Facebook.  As Facebook grew at Harvard and expanded to other universities, Zuckerberg took funding from Silicon Valley and dropped out.

Cameron Winklevoss and Tyler Winklevoss participated at the U.S. Olympics as part of the rowing team last year.  Divya is currently the Co-founder and CEO of SumZero LLC.

[via VentureBeat]