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Facebook Looking For 'Dumb Money'

The New York Post reports that Facebook continues to hold exploratory meetings with private equity firms about raising new funding, but this time, the two sides are a whopping $3 billion apart on what Facebook is actually worth. "Multiple sources" indicate that Facebook has held such valuation discussions with Providence Equity Partners, General Atlantic, Bain Capital, Kohlberg Kravis Roberts and others.

The sources described the talks as informal "and more opportunistic on the part of Facebook than anything else." Earlier this week, in an interview with Bloomberg, Facebook COO Sheryl Sandberg confirmed this: "We absolutely do not need to take money," she said. "We might take money, but it doesn't mean we need to."

The Post's sources said that Facebook would definitely take the money if it could get a valuation in the $5 billion to $6 billion range, but the firms it has held talks with see Facebook's valuation more in the $2-3 billion range. "Facebook is looking for dumb money, but there's none of it out there anymore," said one of the sources. Added another, "It's a new era and funds, even growth funds, are being much more conservative with their investments." Apparently, the talks are creating tension with Facebook existing investors, who don't want to be further diluted through a new round of funding.

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