Facebook Turns Down $8 billion Valuation Term Sheet, Claims 2009 Revenues Will Be $550 million

In the last couple of weeks Facebook received and turned down a term sheet for a new $200 million venture round of funding that would value the company at $8 billion, we’ve learned from a source with direct knowledge of the proposed transaction. We’ve also heard that they’ve received at least one other term sheet that valued the company at $6 billion.

Facebook declined the term sheet based on the requirement of a board of directors seat, says our source, and not the valuation. This has been a touchy subject in the past as well. Founder Mark Zuckerberg has three common stock board seats – one empty, one he holds and one held by Marc Andreessen. There are two preferred stock board seats, held by Peter Thiel of Clarium Capital and Founders Fund and Jim Breyer of Accel Partners. Zuckerberg seems to be quite serious about retaining control over the board of directors. Investors David Sze of Greylock Partners and Paul Madera of Meritech Capital Partners have non voting observer seats.

Facebook is also now pitching financial projections well above what we’ve previously heard. The highest 2009 revenue number that has leaked out of Facebook is $400 million. But investors are now being told the company expects $550 million in 2009 revenue. 2008, they say, rang in at around $280 million. The previous best information on 2008 Facebook revenue was $230 million from eMarketer.

That’s quite a jump in revenue. We’ve heard that things are going swimmingly at Facebook on the revenue front, but $550 million this year may still be quite a stretch. Or even perhaps unrealistic.

But apparently that revenue growth is getting the company to a valuation it could stomach other than the board seat issue. Facebook’s last round valuation was $15 billion, but those days are long gone.

The last few months have been crazy with rumors. BusinessWeek reported that Facebook was looking to raise $100 million in debt. We reported on early term sheets in the $2 billion range. Even Google was sniffing around the company to see if they could buy it on the cheap.

We have no information yet on whether or not Facebook is continuing to pitch for new money, or if the rumors from last weekend from VentureBeat that says they’re close to closing $150 million from existing investors in a common stock sale that would value the company at around $4.5 billion. But we have near confirmation that they recently turned down an $8 billion valuation simply because the investor wanted a board seat. That means they think they have other options.