Are Goldman Sachs and Facebook Trying to Sidestep Securities Regs?

It’s a sweetheart deal, really. Goldman Sachs is said to be raising $1.5 billion for Facebook, the NY Times reports, by creating a vehicle in which select high-net-worth investors can participate. This accompanies a $450 million investment by Goldman Sachs and $50 million from previous investor Digital Sky Technologies.

The additional capital raise, for the Goldman Sachs HNW investors, has drawn the attention of market and Facebook spectators, as it appears to provide a way for the private company to bypass securities regulators in reaching out to public (though accredited) investors.

There is a risk that Facebook will have to register as a public company in order to complete the $1.5 billion capital raise, if it crosses the 500-investor mark, according to Business Insider.

The debate continues to rage on about the next steps for Facebook, and whether the Goldman Sachs deal will force the company into a liquidity event faster than it hoped. There has been talk of an IPO in 2011, though most Facebook-watchers believe 2012 is more likely.

[Sources: NY Times, Business Insider]

 

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