People won't start investing necessarily. Look at the 10,000 millionaires that came out of MSFT in the Redmond area...... only a fraction are investors.

Not sure if you meant investing or inventing (or both). But either one of those could have interesting implications in the valley.

Whoops. Yea I meant investing. My assumption was that some part of a 1000 new millionaires would hopefully be putting some money back into the system through investments. I also think you'll see some people leave Facebook as they vest to go start companies of their own.

The number of millionaires created and the amount they have available to invest are directly related to the stock price. If the price is low, shareholders won't sell, so there won't be new cash to invest in other startups.

At the rate FB is falling, there won't be 1000 new millionaires by that time

FB is still going to be worth $40B?. Its not $100B+, but there are plenty of people that are going to make a lot of money if they sell.

Also check out Fred Wilsons response (http://www.avc.com/a_vc/2012/06/some-perspective.html). He makes some good points about the returns still being pretty damn good.

If you do the arithmetic, yes there will. At any rate, you don't need to be a millionaire to do venture investing.

At the rate FB is falling, it will be worth less than 12 billion in 3 months.

It's these kind of forward projections that cause booms and busts, ie. people assuming that housing prices will increase at a steady/regular rate over time. Just as we saw that this doesn't happen in a steady way, nor will facebook steadily decline over the next 3 months.