Facebook Is Starting a Venture Capital Fund

By Elijah Labby | Sunday, 21 February 2021 | Business, Finance

Facebook is getting into the venture capital investment business, launching a firm intended to invest millions into developing businesses, Axios reported.

In a now-deleted job posting, the social media giant said it was looking for someone to lead the investment wing, dubbed New Product Experimentation.

"In this role, you will manage a multi million dollar fund that invests in leading private companies alongside top venture capital firms and angel investors," Facebook said. "You will develop investment and impact theses, lead the execution of new investments, and support existing portfolio companies as needed."

It’s a monumental shift in approach for the company, which has historically relied on a hawkish approach to dealing with any company that poses a threat to the bottom line of the tech business.

Facebook’s Previous Approach to Competing Business

In the past, one such company was Instagram, which Facebook founder and CEO Mark Zuckerberg deemed a threat to his company. Zuckerberg, at the time, reportedly suggested that his business simply purchase the competitor and bypass any process by which Instagram could independently gain ground.

“These businesses are nascent but the networks established, the brands are already meaningful, and if they grow to a large scale they could be very disruptive to us,” he wrote to the Chief Financial Officer of his company, David Ebersman. “Given that we think our own valuation is fairly aggressive and that we’re vulnerable in mobile, I’m curious if we should consider going after one or two of them. What do you think?”

That sentiment has been the subject of much controversy in Congress, particularly among Democratic lawmakers, and the grounds upon which they argue that Zuckerberg and his business have grown to the point that they are effectively monopolizing the space.

Facebook’s Way of Sidestepping Accusations of Anti-Competitive Business Strategies

By pivoting to investing in the small(er) business market, the gigantic company is sidestepping the criticism and still maintaining control over competitors.

"In the same spirit that the New Product Experimentation (NPE) group is charged with product experimentation, the team is also experimenting with ways to support external startups, including with capital," Facebook told Axios.

The Opportunities Facebook Is Giving Small Business

The bottom line is that Facebook is always looking to innovate and further solidify its place as the dominant social media company worldwide, and it’s been a remarkably successful business strategy.

According to Macro Trends, a website that tracks the value of business across the world, Facebook’s worth as of February 12, 2021, is $770.29 billion and has grown tenfold since the business went public in 2012.

So it’s clear that Facebook shows no signs of fading anytime soon — and that’s a good thing for startup businesses. The venture capital wing of the company has the potential to bring great opportunities to small businesses and bring innovative ideas to the forefront.

About the Author

Elijah Labby

Elijah Labby is a graduate of the National Journalism Center. He has previously written for Broadband Breakfast, a technology and internet policy website.