Countervailing the liability of newness by bringing in active initial investors: the case of Facebook

Abstract

Purpose

This paper aims to present how Facebook overcame its liability of newness period, helping the interpretation of the same initial financial and organizational troubles faced by current unicorns.

Design/methodology/approach

In this study, the case study method has been used.

Findings

This story shows how the inclusion of active initial investors in the strategic team is pivotal for a firm’s survival. This case study depicts in depth the first years of life of the social network Facebook, focusing on the initial investors’ role for the survival of the firm.

Originality/value

This paper shows how an initial strategic team (especially the inexperienced) may benefit from the inclusion of active initial investors in terms of financed capital, and of further financing and refocusing of the strategic direction.

Citation

Cristofaro, M. (2017), "Countervailing the liability of newness by bringing in active initial investors: the case of Facebook", Strategic Direction, Vol. 33 No. 8, pp. 1-3. https://doi.org/10.1108/SD-03-2017-0045