In 2005, An Investor Made A $100 Million Mistake And Passed On Facebook - Here's What He Learned From It

In July 2005, Silicon Valley angel investor Pejman Nozad could have set himself up to make a lot of money.

He was introduced to Facebook then through its former president, Sean Parker. Nozad had the opportunity to invest $50,000 in Facebook's Series B round of financing. Ultimately he opted not to. The decision cost him a lot of money, but it was a learning experience. Nozad has had a number of other successes though. He's an investor in multi-billion-dollar Dropbox, Path and Zoosk.

Nozad shared the story on Mark Zuckerberg's public Facebook wall on Facebook's 10th anniversary. Here it is, below.

On Facebook's 10th anniversary and My $100Million mistake!

It's July 2005. I had just received a call from Sean Parker. Peter Thiel had made an investment in Facebook and had told Sean to give me a call.

You see, Sean wanted to rent the Lucky building in downtown Palo Alto (165 University), a building that my partners own. He invited me to visit the Facebook office on one late morning where I briefly met Mark Zuckerberg and witnessed a handful of very young people glued to their screens! It didn't take long for me to be blown away by Sean's vision of the future of the world and how Facebook would be an integral part of it.

My immediate reaction was "you can have the office, but we should invest." Sean said it was impossible - Accel Partners was completing the series B and there was simply no way we could invest.

We shook hands and said goodbye.

A few days later, I got another call from Sean. "I got you in! You guys can invest $50,000 at the same terms!"

I received wire instruction and signature pages to invest $49,998.04 ( see the copy of emails). There was also a lease agreement attached to the investment with a few terms that our real estate office didn't agree on.

So we ultimately didn't invest.

We missed a huge opportunity but nine years later, I look back on this story and reflect on my two major learnings.

1) When you meet exceptional founders, invest without hesitation!

2) Never let those extra four cents distract you - you have to see the forest through the trees. Just get on the rocket ship and go!

Mark and Sean became my friends and Facebook changed the world forever!

FUN FACT: check the email addresses of Sean and Mark. The URL was still thefacebook.com

Here's the email Nozad screengrabbed along with the story: