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Facebook Borrows $100 Million to Buy Servers
via Mashable! - The Social Networking Blog by Adam Ostrow on May 09, 2008
Facebook is about to spend big on upgrading its infrastructure. According to Business Week, the social network has closed a deal to take a $100 million loan (“venture lending”), all of which will be spent on new servers. Facebook gives up no equity as part of the deal. Business Week explains how this type of loan works:
“Venture lending peaked during the dot-com bubble of the late 1990s and early part of this decade, but is making a comeback as startups use debt to pay for computer servers, telecom gear, and software … The TriplePoint lease has a degree of flexibility not offered by a traditional loan. For instance, Facebook can exchange or replace equipment during the term of the lease.”
Essentially, it’s a really, really huge credit card, with very favorable terms. In all, Facebook has now raised in excess of $300 million, including $240 million from Microsoft and $60 million from Hong Kong billionaire Li Ka-Shing.
The new money comes from TriplePoint Capital, and is the firm’s largest deal to date.
© Adam Ostrow for Mashable! - The Social Networking Blog, 2008. |Permalink |No comment | Add to
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