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How Much Did Mark Zuckerberg Pay Eduardo Saverin? The Facebook Settlement Explained

The story of Facebook’s founding is one of the most intriguing narratives in the tech industry. Central to this story is the relationship between Mark Zuckerberg and Eduardo Saverin, who were once close friends and co-founders of Facebook.

However, as Facebook grew from a college project into a global phenomenon, tensions arose, leading to a legal dispute that ended in a settlement. This article delves into the details of that settlement and explores how much Mark Zuckerberg ultimately paid Eduardo Saverin.

The Early Days of Facebook

Mark Zuckerberg and Eduardo Saverin met at Harvard University, where they bonded over their shared interest in technology and entrepreneurship. In 2004, Zuckerberg, along with Saverin and other co-founders, launched “Facebook,” initially as a social networking site for Harvard students.

Saverin provided the initial funding for the project, contributing $15,000 in seed money, while Zuckerberg focused on the technical aspects.

As Facebook quickly gained popularity, it expanded beyond Harvard to other universities and eventually to the general public. With rapid growth came the need for more funding, and Zuckerberg began seeking venture capital investments.

This period marked the beginning of tensions between Zuckerberg and Saverin, as their visions for Facebook’s future began to diverge.

The Dispute and Legal Battle

As Facebook continued to grow, Eduardo Saverin’s role in the company began to diminish. In 2005, Saverin was effectively pushed out of the company.

His shares were diluted from approximately 34% to less than 10%, a move that Saverin claimed was done without his consent. The dilution was part of a strategy to raise funds for Facebook’s expansion, but Saverin alleged that he was unfairly sidelined and misled about his stake in the company.

In response, Saverin filed a lawsuit against Facebook and Mark Zuckerberg, claiming a breach of fiduciary duty and seeking to restore his rightful ownership in the company. The legal battle was widely covered by the media, adding to the drama surrounding Facebook’s meteoric rise.

The Settlement: How Much Did Mark Zuckerberg Pay Eduardo Saverin?

In 2009, after years of legal wrangling, Mark Zuckerberg and Eduardo Saverin reached a confidential settlement. The details of the settlement were not publicly disclosed, but it is widely reported that Saverin’s stake in Facebook was restored to around 5%. In addition to the shares, Saverin also received a cash payout, though the exact amount has never been confirmed.

At the time of the settlement, Facebook’s valuation was in the billions, meaning Saverin’s restored stake was worth several hundred million dollars. Estimates suggest that Saverin’s Facebook shares alone were worth around $1 billion when Facebook went public in 2012.

The settlement allowed Saverin to maintain his title as a co-founder of Facebook, and his name remains on the list of key figures in the company’s early history.

Where Are They Now?

As of 2024, Eduardo Saverin’s net worth is estimated to be over $10 billion, thanks largely to his Facebook shares. He has since relocated to Singapore, where he has become a prominent venture capitalist, investing in various tech startups.

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Mark Zuckerberg, on the other hand, continues to lead Meta Platforms, Inc. (formerly Facebook, Inc.), which has grown into one of the world’s most valuable technology companies. Despite the early disputes, both Zuckerberg and Saverin have found immense success in their respective paths.

Conclusion

The legal battle between Mark Zuckerberg and Eduardo Saverin is a reminder of the complexities that often arise in the world of startups.

While the exact amount that Zuckerberg paid Saverin remains a topic of speculation, the settlement undoubtedly made Saverin a billionaire and secured his place in the annals of tech history.

Their story is not just about a friendship turned sour but also about the high stakes involved in creating a global company. Today, both Zuckerberg and Saverin continue to shape the technology landscape, albeit in different ways.

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