With regard to the first question, I certainly wouldn't be investing at this level. Given the challenges of liquidity and the uncertainty as to whether Facebook can convert its admittedly amazingly successful business model into something truly sustainable, it seems to me that the risk/reward balance is not in the investors' favour. If I were an early employee and had the opportunity to take some cash off of the table, I'd certainly do so.
With regard to the second question, I dont believe that it is exactly 'new' in the way the mainstream media is reporting. The use of a balance sheet to 'buy a deal' is well established in both the debt and equity markets. Indeed, in Singapore a pre-IPO round (admittedly for smaller companies) is generally accompanied by placing a portion of the funds raised in an escrow account ready to be paid to the underwriter (who raised the pre-IPO round) when taking them through the listing process. As for it being fair, I believe that the real question is whether Facebook would have considered a more standard publicly offered IPO today had the regulations been different. There are certainly hurdles for companies to be listed today that didnt exist a decade ago. Some of them are well placed, others less so. However, my sense is that Facebook is following a similar track to Google (though short memories seem to forget the anticipation of an IPO that preceded that companies actual listing).
The main story here is that Goldman has secured what will be the most important IPO of this decade to date and has done so in a way that reinforces their prominence in the industry. It is often said by institutional investors that they dont like doing business with Goldman, but they need to. The Facebook deal confirms this. Equally, the deal will generate multiple fee generators for Goldman whilst mostly using other peoples' money rather than their own balance sheet.
There may be much complaining from other banks and commentators on this deal, but it will mostly be down to jealousy. Once again, the clever guys at Goldman are taking advantage of their market position and power in a way that reinforces their dominance.
