Early Life and Education
Yuriy Milner was born on November 11, 1961, in Moscow. His father, Bentsion Zakharovich Milner, was an economist, while his mother, Betti Iosifovna Milner, worked in a sanitary-epidemiological laboratory. In 1985, Milner graduated from Moscow State University with a degree in theoretical physics.
Following his graduation, he began working at the Institute of Physics of the Academy of Sciences, under the supervision of future Nobel Prize winner Vitaly Ginzburg in the theoretical physics department. Milner’s entrepreneurial journey started with the trade of computers.
As of January 18, 2025, Yuriy Milner’s net worth is estimated at $5.9 billion. This figure has been primarily shaped by his global technology investments, including stakes in major companies such as Facebook, Twitter, Spotify, and others. Milner’s investment strategy and his deep analytical understanding of the technology sector have positioned him as one of the world’s leading investors.
Facebook: The Investment Opportunity
In early 2009, Facebook’s Chief Financial Officer, Gideon Yu, received a phone call from Moscow. The caller, speaking in polite yet firm Russian, expressed interest in investing in the company. At that time, Facebook had already secured funding from major investors such as Peter Thiel, Accel, and Microsoft, and was not open to offers from unfamiliar sources. Yu, skeptical of the caller’s intentions, asked how he could verify the seriousness of the proposal.
Despite Yu’s reluctance, the caller insisted on a face-to-face meeting. Yu advised against traveling such a long distance solely for a meeting. However, the determined caller, who had never set foot in Silicon Valley before, was Yuriy Milner. Without hesitation, he booked a flight to San Francisco and upon arrival, reconnected with Yu.
The Unexpected Proposal from a Russian Investor
Once in California, Milner arranged a meeting with Yu at a Starbucks café in Palo Alto. At the time, securing investment was crucial for Facebook, especially amid the financial crisis following the collapse of Lehman Brothers. During the meeting, Milner put forth an initial investment proposal of $5 billion.
Milner’s Innovative Approach
Milner’s proposal was backed by thorough research and analysis. His team had collected extensive data on internet user behavior across various countries, tracking metrics such as daily engagement, time spent on platforms, and growth potential. Their analysis concluded that Facebook’s growth potential was far from being fully realized.
Milner pointed out that Facebook lagged behind international social media platforms in terms of monetization. While Silicon Valley entrepreneurs faced less pressure to generate revenue from users, foreign social networks, such as Russia’s VKontakte, had already developed monetization strategies. Milner was confident that his global experience and data-driven approach could unlock significant opportunities for Facebook.
Negotiations and Strategic Agreements
During his meeting with Facebook’s founder, Mark Zuckerberg, Milner presented compelling evidence of the platform’s global potential. His investment strategy focused on acquiring shares without interfering in the company’s governance. Furthermore, he proposed a strategic plan to acquire employee shares, ensuring long-term financial stability for Facebook.
A Game-Changing Offer
During the negotiations, Milner addressed two of Zuckerberg’s primary concerns effectively.
First, he understood Zuckerberg’s strong desire to retain control over the company and assured him that DST Global would not seek any representation on the board of directors. He even offered to grant Zuckerberg full voting control over Milner’s shares. This strategic move allowed Facebook’s leadership to operate without external pressures.
Second, Milner proposed a practical solution to the issue of employee shares. He suggested offering a higher price for primary shares issued by the company, while acquiring employee-owned secondary shares at a slightly lower price. This two-tier pricing strategy optimized Facebook’s financial stability while giving employees the opportunity to liquidate their shares.
Final Agreement and Its Impact
In May 2009, DST Global agreed to purchase a 1.96% stake in Facebook for $200 million. This deal secured a $10 billion valuation for the company and provided crucial funding for its growth. Additionally, the acquisition of employee shares at a lower price enhanced Facebook’s financial flexibility.
Milner’s meticulous analysis, his accurate evaluation of Facebook’s user growth and global potential, and his willingness to take calculated risks played a pivotal role in the company’s future success. While American investors valued Facebook at around $5-8 billion, Milner confidently proposed a valuation of $10 billion. Despite skepticism from U.S. investors, Milner’s global experience and data-driven decisions proved that the investment was both logical and promising.
During the early months of 2009, as the market began to recover and competition intensified, Milner’s strategic approach captured Facebook’s leadership’s attention, ultimately positioning the company for long-term success. As a result, Facebook’s valuation increased significantly in a short period, further affirming the effectiveness of Milner’s investment strategy.
By 2010, Facebook’s valuation had reached $50 billion. Milner’s innovative approach and global investment strategy allowed the company to delay its IPO, giving private investors the opportunity to generate significant wealth before going public.
Conclusion
Yuriy Milner’s investment in Facebook marked a new era in technological investing. His strategic approach to capital infusion and collaboration with entrepreneurs reshaped the investment landscape in Silicon Valley. His method allowed companies to postpone their IPOs, ensuring sustainable growth and providing startups with new avenues for securing investment.
Prepared by :Laylo Xondamirovna
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