Goldman Fees Prompted Netscape Founder to Reject Facebook Investment Offer [REPORT]

Credit:

The March cover story, titled "Lloyd Blankfein's Headache," which goes live this evening, reports that Clark got an e-mail from an executive at Goldman's private wealth management division on January 2. The deal — through a fund overseen by Goldman Sachs Asset Management — was being offered to other Goldman investors at the time.

The report goes on to say that the deal called for a 4% placement fee on clients plus a 0.5% "expense reserve" fee and would also require investors to surrender 5% of any profits, known as "carried interest."

While Clark turned that offer down, he had purchased a stake in Facebook through another firm at a lower price and without the carried interest fee. In June 2009, Clark pulled most of his roughly $400 million from Goldman for what he considered bad advice and poor performance.

The report comes after Goldman earlier this month excluded its U.S.-based clients from buying shares in Facebook, citing "intense media coverage" as the motivating factor in its decision.