ConnectU Spills Value of Facebook Deal: $65M

[josefresco]

$65 million for having an idea taken that they probably would have failed at if executed themselves.

That's a nice pay day (for the lawyers too)

[old-gregg]

First, what makes you think that "they probably would have failed"?

Second, he stole not just "an idea", he stole the code, he participated in their in-house discussions and effectively was spying over his future competitors, and most importantly he stole a lot of time - ConnectU founders were lured into believing that their product was moving along for a while.

Nobody pays $65M in a settlement for "stealing an idea". The fact that Facebook settled for such amount only means that ConnectU lawyers were able to prove some of these nasty things above.

Personally I'm very disgusted by this accident, I regret that jail time wasn't even a question. Something very similar happened to one of the startups I was involved in, but in that case it was an opposite spin: an "idea guy" who contributed nothing but the idea, used cofounding developers to build a prototype and then diluted them to almost zero even prior to A-round.

This undermines the entrepreneurial spirit. And the fact that you can get away with it (like Zuk did) in such visible manner is even worse, it's like O.J case for software.

[dpeq]

Especially for the lawyers ... would be interesting to know what's left.

[fallentimes]

I think I rather have $10 million in cash than $65 million in facebook stock.

[whacked_new]

Is there any mechanism stopping the sale of stock right now? If they feel like selling, there should be somebody willing to take it, no?

[petercooper]

This whole thing forgets Aaron Greenspan, another Harvard alumni who has a claim on coming up with the concepts behind Facebook:

http://www.nytimes.com/2007/09/01/technology/01facebook.html...

[aston]

AKA thinkcomp, as seen commenting elsewhere on this post.

[jonknee]

That's $65 million more dollars than Facebook has ever profited. Not a bad deal.

[jorgeortiz85]

Eh. It was probably paid mostly in shares of Facebook itself. So it's $65 million if you believe that Facebook is worth $15 billion.

[kwamenum86]

The title is misleading- ConnectU's former lawyers published the estimated value of the settlement inadvertently.

[whacked_new]

I always thought this was a petty/trollish lawsuit, and never bothered to follow it, but does this say that there was merit behind ConnectU's lawsuit?

Ok, downmodded, now does that mean yes, or no? A mere click is a bit too abstract.

[cellis]

Note that the stock:cash ratio was not disclosed. Depending on what it is, the payout could be significantly less (in the near future, at least; I am firmly in the camp that facebook is worth billions).

[palish]

"The $65 million is presumably an estimated value of the settlement, which was paid in a mix of cash and Facebook shares."

Because Facebook's valuation is completely stable and accurate.