So where could DST spend its cool billion dollars?

It’s no secret that Russian investor Yuri Milner — whose Digital Sky Technologies has been one of the prime movers in pumping up the Silicon Valley venture scene over the past few years — has been looking to invest more money. The Muscovite billionaire has been putting the pieces into place over the past few months, holding talks with groups like Germany’s Samwer brothers about raising investment and last week freed himself up by stepping down from his job as chairman of Mail.ru.

So perhaps the news that DST is on the verge of launching a new $ 1 billion fund, reported by Bloomberg on Wednesday, was simply a matter of time.

The detail of how it is happening is fairly interesting:

DST has committed Facebook stock valued at $ 50 million to the fund, meaning limited partners get a chance to own the shares through their investment, according to an investor presentation obtained by Bloomberg News. Early investors were offered the Facebook holding at a 12 percent discount to an internal valuation of about $ 74 billion, as well as a 25 percent reduction in the fund’s management fee.

But the real question on everybody’s lips is where the money will go.

The company seems to have put some serious constraints on the destination for cash it manages. DST only plans to make minority investments in late-stage startups that are valued at $ 500 million or more: effectively using the money to priming the IPO pump. It’s a tactic Milner has used to great affect already, putting money into LinkedIn and Groupon shortly before they went public.

Given DST’s previous investments — Zynga, Twitter and Airbnb are also in there — it seems to like consumer-facing services that are well-known and have strong levels of media attention, which is always useful for driving up valuations. And with the other limitations it appears to have put in place, the number of companies that could be looking at taking this investment are relatively small.

Forbes Russia suggests five companies in the running: Dropbox, Square, Pinterest, Quora and Storm8.

Those are all fair bets. Square’s Jack Dorsey has already teamed up with Milner at Twitter, the business has good relations with startups that come out of Y Combinator, and it often invests alongside Andreessen Horowitz (which has money in Pinterest, for example).

Who else could be on the list?

I doubt there will be many surprises, but businesses like Foursquare, Tumblr and Instagram also certainly have the current valuations that would satisfy DST’s requirements. Businesses like Etsy and Box.net might appeal too. Meanwhile, it’s not beyond DST to invest in non-American companies (it has Spotify on its books for example), but the pool of candidates outside the U.S. is even more limited, especially if Milner wants to take the companies onto the American markets to maximize his returns — possibly leaving Angry Birds maker Rovio as one of the only options that fits.

Any others?

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