Facebook, Zynga, Groupon, Twitter and LinkedIn have come to define the social Web. Founded within the last five years, the quintet of start-ups is now estimated to be worth more than $71 billion.
Behind these companies is a tangle of venture capitalists, founders, engineers and angel investors who stand to profit handsomely if these start-ups go public. For some companies, it is just a matter of when. Groupon is considering a 2011 offering that would value the social buying site at $25 billion, while Facebook has signaled that it will go public next year.
The club of technology insiders is a deeply connected, interdependent network, with many players overlapping at one time or another on the same investments, boards and payrolls.
For example, the Russian billionaire Yuri Milner "” who was virtually unknown in Silicon Valley before his first Facebook investment in May 2009 "” is a critical connector in this ecosystem. Mr. Milner, the founder of the investment firm DST Global, has plowed more than $1 billion into Facebook, Zynga and Groupon in the last two years. He has also drawn the Wall Street elite into this world, joining with Goldman Sachs for a $1.5 billion investment in Facebook.
"Silicon Valley is not only building and investing in social networks, it is an efficient network of relationships where each individual can be activated or brought into a deal with just a few e-mails or phone calls," said Jeff Clavier, an investor who owns stakes in Twitter and Groupon. "That can be fascinating, or irritating, to watch for outsiders."
Click on the graphic below to get a fuller picture of the web of key relationships in Silicon Valley.
Sign up for the DealBook Newsletter, delivered every morning and afternoon, and receive breaking news alerts throughout the day.
Subscribe
Private investment firms and public banks find themselves at unusual inflection points in their recovery from the financial crisis.
Get morning and afternoon news highlights with the Morning Take-Out and the Buzz Tracker. Subscribe to the newsletter.
Federal prosecutors are taking a hard look at hedge funds and their expert networks. See all of DealBook's coverage here.
Join DealBook reporters and financial experts as they provide timely video commentary on the latest developments.
Sign up for the latest financial news delivered every morning and afternoon.
When your need to know is need-to-know right now.
Download the new DealBook app for BlackBerry for up-to-the minute financial news throughout the day.
Follow us on Twitter for the latest in deals and those who make and break them.
Read Full Article »