Some partners at this VC firm worried that investing in Facebook at $500 million would 'ruin the firm'

Back in 2006, Greylock Partners participated in a $27.5 million Series B round of financing for a startup valued at $500 million.

You might have heard of it? It's called Facebook. 

Nowadays, it looks like the deal of the century - Facebook is a publicly traded company with a $239 billion market cap. But back then, some people at Greylock thought that David Sze, the partner who led the deal, thought it was crazy.

"There were some partners that were saying, 'This is gonna ruin the firm.  This is a huge mistake,'" Sze told Bloomberg Television's Emily Chang in an interview, airing in full later today. 

"[It] seemed like an insane valuation," Greylock Partners' John Lilly said in the same interview. At the time, Facebook was just a social network for students, and perceived by many to be a mere toy. 

Still, Sze says that arguing over deals is just part of the culture and "characteristic of our partnership" at Greylock, which has also invested in Silicon Valley heavyweights like Instagram, Airbnb, and LinkedIn. 

That same Series B round saw participation from famed investor and PayPal co-founder Peter Thiel's Founders Fund, with Thiel himself leading the deal. Thiel has gone on the record several times urging startups (and investors) not to go where everybody else is, no matter how crazy it seems.

"I think there's no wisdom in crowds, there's only insanity," Thiel once said.

You can watch Greylock's David Sze and John Lilly discuss the internal clashes over the Facebook investment here, or the full interview on Bloomberg's Studio 1.0 tonight at 7:30PM ET/PT.