Eduardo Saverin

Cofounder of Facebook

• Born: March 13, 1982
• Place of Birth: São Paulo, Brazil

Primary Company/Organization: Facebook

Introduction

Eduardo Saverin, born to a wealthy Jewish family in Brazil and raised in the United States from age thirteen, is best known as the cocreator, with Mark Zuckerberg, of Facebook (dramatized in the 2010 feature film The Social Networkwith Andrew Garfield as Saverin). Saverin was friends with Zuckerberg when they were both students at Harvard University, and he was the first investor in Facebook; he later sued Zuckerberg. Saverin has more recently invested in other technology start-ups, including Qwiki and Jumio. His decision to renounce his US citizenship (he remains a citizen of Brazil) and take up residence in Singapore before Facebook's initial public offering (IPO) attracted public scrutiny, many charging that the move was designed to avoid paying US taxes, but Saverin insists the move was motivated only by his desire to live and work in Singapore.

Early Life

Eduardo Luiz Saverin was born in São Paulo, Brazil, the third child of Roberto and Sandra Saverin; later his family moved to Rio de Janeiro. His father was an industrialist whose business endeavors included clothing, shipping, export, and real estate; his mother was a psychologist. In the early 1990s, Roberto decided to fulfill a dream and move his family to Miami, Florida, a popular destination for Brazilians. Contrary to rumor, the impetus for the move was Brazil's economic situation and its president's move to freeze savings accounts; it was a year after the family had left Brazil that Roberto learned that his father, Eugênio, was on a list of individuals to be kidnapped for ransom. Today Roberto heads a Miami business that exports pharmaceuticals.

Eduardo had to learn English and how to fit into a new society just as he was starting adolescence. Although he was not a computer nerd, this experience of being an outsider has been hypothesized to have helped him understand the motivations of computer geeks such as Zuckerberg. He attended Gulliver Preparatory School in Miami and became an American citizen at age eighteen. Saverin graduated magna cum laude from Harvard University with a bachelor's degree in economics in 2006. While at Harvard, he was a member of the Phoenix S.K. Club, a finals club founded in 1902, and was president of the Harvard Investment Association. Saverin was also known as an expert chess player and was a member of the Jewish fraternity Alpha Epsilon Pi, as was Zuckerberg.

Life's Work

Zuckerberg and Saverin met during their freshman year at Harvard. They created thefacebook. the forerunner to Facebook, working from their dormitory. Zuckerberg was the technical expert and programmer, while Saverin managed the service as well as providing the initial financial investment, handling the incorporation process, and managing the advertising and business end of the operation. Saverin and Zuckerberg registered thefacebook in Florida on April 13, 2003, as a limited liability corporation; the company partners were Zuckerberg, Saverin, and Dustin Moskovitz. On the online “about” page for thefacebook they gave themselves humorous titles: Zuckerberg was “Founder, Master and Commander, Enemy of the State,” Saverin was in charge of “Business Stuff, Corporate Stuff, Brazilian Affairs” and Moskovitz was “No Longer Expendable Programmer, Paid Assassin.”

Although thefacebook was producing almost no revenue, the rapidly increasing popularity of the service (by June 2004, it had almost 100,000 users at thirty-four schools) attracted the attention of investors; despite the fact that the company was producing no significant revenue at this point, in June 2004 Zuckerberg was offered $10 million for it. One of the first advertisers on thefacebook was the credit card company MasterCard, and the ads proved immediately successful: The company received twice as many applicants in one day as had been expected for four months, demonstrating thefacebook's ability to get ads in front of well-off undergraduates at prestigious schools.

In the summer of 2004, Saverin took a summer internship at an investment bank in New York City, while Zuckerberg went to California to work on thefacebook and a new project, Wirehog. Saverin also intended to solicit more advertising for thefacebook, reasoning that many of the logical companies to approach were located in New York. At this point, both Saverin and Zuckerberg also agreed to invest $20,000 in Facebook, although Saverin would later charge that Zuckerberg did not live up to his end of the bargain. The money was needed to buy servers and other equipment and to support the programming team; while in California, Zuckerberg rented a house in Palo Alto and worked on Facebook, assisted by Moskovitz and several interns. Those involved recall it as an intensive, work-focused experience, with most time spent writing code, punctuated by music, beer, and horseplay. During this summer, Sean Parker (cofounder of Napster) became interested in Facebook and introduced Zuckerberg to potential venture capitalist investors.

In July 2004, Zuckerberg and Saverin had a dispute, the details of which are not entirely clear. Saverin felt he was being muscled out of the company, despite his dedication to producing revenues for it, while Zuckerberg and the other programmers felt Saverin was not working nearly as hard as they were. Parker led the effort to reincorporate the company in Delaware, and, according to legal filings, Zuckerberg informed Saverin that he (Saverin) was no longer an employee of the company and that his stock was subject to dilution (meaning that Saverin's share of the company would decline when more stock was issued through employee stock options and when new investors bought into the company). In the newly reincorporated company, Zuckerberg owned 51 percent, Saverin 34.4 percent, Moskovitz 6.81 percent, Parker 6.47 percent, and the law firm handling the deal the remaining shares. In response, Saverin froze the company's Florida bank account; Zuckerberg drew on his savings and contributions from his parents to buy needed equipment and keep the Palo Alto house running.

By December 2004, Facebook had 1 million users—a remarkable achievement for a company that had been in business less than a year. In January 2005, Parker was appointed president of Facebook; he resigned in October. Also in 2005, Facebook started allowing high school students to join, and soon it had 5.5 million users.

In September 2011, Saverin filed papers to renounce his U.S. citizenship, but the information did not become widely known until the U.S. Internal Revenue Service released it on April 30, 2012. This choice was highly criticized in the media, which charged that he had made this choice in order to avoid paying taxes in the country (the United States) that had allowed him to become prosperous. However, Saverin stated that he had already been living in Singapore for some time and that the location was also convenient because he would be investing in Asian companies. Saverin's stake in Facebook was first revealed publicly on May 18, 2012, in a filing by the U.S. Securities and Exchange Commission (SEC). The filing revealed that Saverin owned just under 2 percent of Facebook shares, worth about $2.2 billion; Saverin had previously sold off more than half his shares from the settlement of his lawsuit against Facebook. All Saverin's shares are Class A stock, giving him virtually no actual control over the company (Class A shares have one-tenth the voting rights of Class B shares).

In Singapore, Saverin has worked as a venture capitalist, launching the venture fund B Capital in 2016. As of 2023 the fund had raised more than $2.1 billion and was investing in late-stage tech firms in Asia, Europe, and the US.

Personal Life

Saverin has been described as shy but strong willed. When he was thirteen, he beat a chess master during a match in Orlando, Florida—a feat so unusual that it earned him his first mention in international news. Before making his final move, he turned to his mother and asked, “Do you think it's all right if I win?” Since 2009, Saverin's home and work base has been a multimillion-dollar condo in Singapore. In 2015 he married Elaine Andriejanssen, a Chinese Indonesian woman. In 2024, Forbes estimated his net worth at $27.2 billion.

Bibliography

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