Instagram selling to FB is a potential mistake in hindsight. Even without FB's direct backing, IG was poised to grow like crazy. Probably could've IPOed or sold to FB or someone else for 10x or 15x 2 years later.
From what I've heard (don't quote me on this), I think Instagram was having serious financial difficulties at the time of the acquisition. The costs to run the service (media transfer and storage are a massive infrastructure cost) were astronomical. The Facebook buyout was almost the only way they'd stay alive without giving up a massive piece of the company in a funding round.
