Business Insider posted a series of articles on early days of facebook, to summarize
Three students(Winklevoss brothers and their friend Divya Narenda) at Harvard approached Mark Zuckerberg to develop a Harward University specific social networking site, Harvardconnection.com.
Mark agreed to develop it and after a couple of days he intentionally mislead the trio and started developing a website on similar lines, thefacebook.com
Thefacebook.com went live in 2004 and instantly became a super hit. The trio filled a law suit againt Mark and settled it out of court for cash and stocks reportedly worth about $65m in 2008 and launched their project, renamed ConnectU, in May 2004.