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IPO Stock For Users Of Twitter, Zynga and Facebook?

December 31, 2010

Many smart people think 2011 will be the year of the tech IPO. While IPOs are not as attractive as they once were, going public is a great way to generate fresh capital for growth. In theory, increased regulatory and disclosure requirements benefit shareholders with greater transparency.

It is more probable than not that Facebook, Zynga, Twitter and other tech companies like Groupon and Zipcar will go public in the next year or two.  In the case of Zynga, Facebook and Twitter, these companies have achieved success, in part, on the foundation of hundreds of millions of users.

It would be nice if founders and existing investors could express their appreciation for users by opening the door to participation in IPOs. Friends and family shares are often offered to certain groups when a company goes public. Such was the case with Tesla’s recent IPO, where owners of Tesla vehicles were allocated IPO stock.

With Twitter, Zynga and Facebook, it is much more complicated to offer “friends and family” stock to all users, because of securities regulations, the vast number of users and the fact that users are located all over the world. However, where there is a will, there is a way and each of these companies has access to the brightest attorneys in the best law firms.

I think it is only fair to say “thank-you” and share success with the constituents who helped to build the foundation of value. Plus, these people are already believers and they will help support these companies in the public market.

If any of these companies goes public, my hope is that the founders of Zynga, Facebook and Twitter direct their legal counselors to find a way to offer users a way to participate in an IPO.

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