Facebook Raises A $100 Million Equity-Free Loan For Server Power From TriplePoint Capital

Posted May 11, 2008

“It will be used entirely for servers.”
-Facebook Chief Financial Officer Gideon Yu (former CFO of YouTube and Yahoo! Treasurer)

In the last 7 months, Facebook has raised about $460 million. One hundred million of that amount was raised in the last couple of days for the company to scale their user-base by procuring additional servers. The $100 million will is a loan and equity will not be given away. TriplePoint Capital, a Menlo Park, Calif.-based venture capital firm is the ones who provided the loan.

“The last thing the entrepreneur wants to do is see those precious equity dollars flowing into equipment purchases,” stated TriplePoint’s CEO, Jim Labe. “It’s a very unproductive use of equity to plow it into fixed assets.”

Facebook has also recently started to remove the cap from the number of friends a user can have. The cap was set to 5,000 friends total before. As of right now, Facebook has about 550 employees but expects to have 700-800 by the end of the year.

Some of TriplePoint’s client list includes E-Loan, Hotmail, Inktomi, NVIDIA, Pogo.com, and Salesforce.com.

Information Source:
[1] BusinessWeek: Facebook: Friends with Money by Spencer E. Ante