In Facebook Deal for Instagram, Board Was All But Out of Picture - WSJ.com
Niall Kennedy stashed this in Facebook
Mark Zuckerberg controls 57% of Facebook voting rights. Kevin Systrom owns about 45% of Instagram. The two CEOs spent a weekend negotiating at Zuckerberg's home in Palo Alto without much board notification or involvement according to the Wall Street Journal.
Negotiations started on Thursday, April 5. When Marc Andreessen showed up at Zuckerberg's house for a regular meeting on Sunday at 6 p.m. he was surprised Systrom was in the next room (Andreessen was the second to invest in Instagram and is a Facebook board member).
Kevin Systrom reportedly opened negotiations at $2 billion. Zuckerberg encouraged him to think in terms of % of Facebook since the stock from the deal would be that future value.
This is Game of Thrones, Silicon Valley style: http://pandawhale.com/convo/1034/mark-z-and-mark-p-are-kings-in-silicon-valleys-game-of-thrones
Kings don't need to ask permissions of Boards. They just need to negotiate with each other and tell the world this is what they're doing.
Remember that Mark and Kevin had talked several times before -- and Mark had been trying to get Kevin to join Facebook for years. So this was not a light decision. This was the marriage of two kingdoms -- one already on top, the other whose power was beginning to emerge.