Facebook's Billion Dollar Refusal

Palmer Luckey shares how Oculus initially turned down Facebook's $1B acquisition offer, which led to a much larger deal.

"We didn't have any intention of selling initially when we first had our conversation with Facebook. The first time we talked, I think basically we were offered $1 billion to sell and we said no. We weren't interested - we thought this company would easily surpass that value.

We didn't talk to Facebook for a few months after that. Then a few things changed. It became clear our competition was serious and would be putting massive dollars into their success. The day we finalized the Facebook acquisition was the same day Sony announced PlayStation VR.

Facebook came back with a new pitch: 'Maybe you could make more money as an independent company, but if you're with us we're going to make VR happen much faster. Yes, you might make more money, but you're going to go much slower than if we were able to artificially supercharge your growth far beyond what you could do with venture capital.'

They were willing to commit $1 billion a year for a decade or more. That's a really tough thing to turn down when you really believe in something. It wasn't about revenue multiples or P&Ls - it was a high-level bet on whether you believe in the metaverse and if we were the best team to make it happen."