Cash from Facebook IPO Likely to Fund More Startups
NewsFactor, May 18th, 2012
“Facebook going public will have a profound impact on Silicon Valley and sprout an entire new crop of startups as a result of this newfound capital” from Facebook’s IPO, said Scott Sellers, CEO of Azul Systems. “I believe this IPO will create a domino effect of new money flooding into the mobile realm as well as international markets.”
Facebook shares are officially trading. The social media giant set its initial share price at $38 and offered 421 million shares. That means Facebook could make IPO history with an $18.5 billion offering on a $104 billion valuation.
Facebook boasts about 900 million monthly active users. Facebook officially became the top-ranked Web site in the U.S. in March 2010, according to Experian Hitwise. Twenty percent of all Web page views stateside are on Facebook.
The stage is set. The shares are trading. But what happens when the dust settles? If Facebook’s IPO meets expectations, social media startups could become the investment du jour. But if Facebook doesn’t hit on all IPO cylinders — or if it can’t sustain its success in coming quarters, the story could look much different for social networking upstarts.
A Profound Impact?
We asked Scott Sellers, co-founder and CEO of Azul Systems, which develops runtime platforms for executing Java-based apps, his take on the Facebook IPO. He told us the day you see your company stock symbol moving across the ticker is one you never forget.
“Facebook going public will have a profound impact on Silicon Valley and sprout an entire new crop of startups as a result of this newfound capital,” Sellers said. “I believe this IPO will create a domino effect of new money flooding into the mobile realm as well as international markets as Facebook’s technology becomes more widely accepted and utilized.”
When we talked to Damon Schechter, CEO of Shipwire, an outsourced e-commerce order fulfillment and logistics service, he told us not only is Facebook rapidly approaching over 1 billion users, they are reaching the tipping point within international markets.
“When you think big you get big results — Facebook is the preeminent example of this approach,” Schechter said. “From his Harvard dorm room to one of the world’s soon-to-be richest men, Zuckerberg created a concept with a ‘stickiness factor': he understood that its human nature to want to be part of a larger social network — and now he is going to monetize it.”
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