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Facebook establishing a venture arm to invest in startups

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Re: Facebook establishing a venture arm to invest in startups

#71

Post by mattkrause »

a13n wrote: post #29
tyre wrote: post #18

If you're competing in any way, building in any part of the social media space, this is an invitation to have your product copied as soon as you see any traction. Facebook doesn't need the money. It's looking for you to do the R&D.

I would guess it's more about the money than you think. Public companies have a fiduciary duty to maximize profits and investor returns. They're simply using the data that's available to them to make great investment decisions to make more money. It seems like a conflict of interest to invest in a company and then turn around and compete with them. If the end plan is to take their ideas once they start becoming succe…

This misguided meme comes up like clockwork every two weeks.

The actual legal standard is much closer to “don’t rip off the company” than “you must grab onto every penny anywhere near your grasp.”

This thread has a bunch of references to court cases: https://news.ycombinator.com/item?id=23393674

The common theme is that the directors of a company have incredible latitude to run it as they please, and courts won’t second-guess business decisions as long as they are vaguely plausible.

Re: Facebook establishing a venture arm to invest in startups

#72

Post by jedberg »

toast0 wrote: post #12
ChicagoDave wrote: post #2

I wouldn't take a penny from Facebook. You know they will lock down any patent you create and steal your IP.

Disclosure: I worked for WhatsApp, including while owned by Facebook, and Facebook is assigned my twoish [1] patents. Has Facebook done anything with their patents? I know they had an early spat with Yahoo and got access to a bunch to help with that, and have since put more effort into building a portfolio, but I don't recall seeing anything in the way of litigation. I know there's been issues with clauses in license…

I also have three identical seeming patents. I was also confused, so I asked my patent examiner friend, and this was his response. I assume the same applies to you:

"You have one patent family with three patents in it. The lowest number is the parent, it was first to grant. Before it was granted a continuation was filed - they wanted to claim some shit that you disclosed in the parent but didn't claim, and it got granted. Before that one got granted a second continuation was filed to claim some shit that was disclosed in the first continuation. Sometimes that comes from realizing something else in the patent specification was also really important and deserves protection, or something comes up in prosecution and the easiest way to get around a rejection is to file a continuation. All the claims in the patent family are unique."

Re: Facebook establishing a venture arm to invest in startups

#73

Post by granzymes »

riantogo wrote: post #69
gimmeThaBeet wrote: post #39

Earlier quoted context omitted.

That's not really insider trading. Matt Levine pops up here all the time, and one of the really distilled mantras he has: inside trading isn't about fairness , it's about theft . Like the people who track flights to speculate on M&A, or use satellite and aerial imagery to look at parking lots. Gathering information isn't a crime, in fact gathering and acting on that information is explicitly what you want at an aggre…

And that exactly is the problem. The game is rigged in favor of folks who already have access to information (or can afford to buy it), not available to regular folks. That is how billionaires double their billions faster than me essentially playing lottery/roulette with my $1000 on Robinhood.

On the other hand, incorporating exotic or unusual sources of data makes the market more efficient for everyone. The market is first and foremost a method for price discovery and rewards actors for their contributions thereto.

Re: Facebook establishing a venture arm to invest in startups

#74

Post by ISL »

riantogo wrote: post #69
gimmeThaBeet wrote: post #39

Earlier quoted context omitted.

That's not really insider trading. Matt Levine pops up here all the time, and one of the really distilled mantras he has: inside trading isn't about fairness , it's about theft . Like the people who track flights to speculate on M&A, or use satellite and aerial imagery to look at parking lots. Gathering information isn't a crime, in fact gathering and acting on that information is explicitly what you want at an aggre…

And that exactly is the problem. The game is rigged in favor of folks who already have access to information (or can afford to buy it), not available to regular folks. That is how billionaires double their billions faster than me essentially playing lottery/roulette with my $1000 on Robinhood.

There is probably a useful fact that you know that billionaires don't. It is probably local or related to your technical expertise.

Peter Lynch famously researched companies by watching to see where his family spent pocket money. I recall reading analyses of trading performance by members of Congress -- they generally did about the same as everyone else except in companies associated with their districts.

Anecdotally, it is easier to double small dollars than large dollars. Berkshire Hathaway's growth has eased for ~2 major reasons: 1) Prices have been high for the last decade+, frustrating the core algorithm of value-investing. 2) It is very difficult to put huge amounts of money to work.

The alternative to a world with asymmetric information (and probably impossible to implement at that) is one with zero privacy, where all information is open to everyone always. I don't think we want to live in that world.

Re: Facebook establishing a venture arm to invest in startups

#75

Post by cosmodisk »

laurentdc wrote: post #47
gimmeThaBeet wrote: post #39

Earlier quoted context omitted.

That's not really insider trading. Matt Levine pops up here all the time, and one of the really distilled mantras he has: inside trading isn't about fairness , it's about theft . Like the people who track flights to speculate on M&A, or use satellite and aerial imagery to look at parking lots. Gathering information isn't a crime, in fact gathering and acting on that information is explicitly what you want at an aggre…

> track flights to speculate on M&A, or use satellite and aerial imagery to look at parking lots This is very interesting, got any source or article? Thanks edit: found this https://www.theatlantic.com/magazine/archive/2019/05/stock-v...

Can't remember off top of my head but if I'm not mistaken, Muddy Waters Research did similar things with a listed Chinese company: went all the way to China just to fimd out that there's not much going on in those warehouses,while they were reporting record resuls.Shorted the stock,made tons of money.

Re: Facebook establishing a venture arm to invest in startups

#77

Post by colonelanguz »

tych0 wrote: post #50
a13n wrote: post #29

Earlier quoted context omitted.

I would guess it's more about the money than you think. Public companies have a fiduciary duty to maximize profits and investor returns. They're simply using the data that's available to them to make great investment decisions to make more money. It seems like a conflict of interest to invest in a company and then turn around and compete with them. If the end plan is to take their ideas once they start becoming succe…

> Public companies have a fiduciary duty to maximize profits and investor returns. No, they don't. There are many articles on the subject, here is one: https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...

Delaware companies do. See, e.g., Frederick Hsu Living Tr. v. ODN Hldg. Corp., 2017 WL 1437308, at *18 (Del. Ch. Apr. 14, 2017) (“[T]he fiduciary relationship requires that the directors act prudently, loyally, and in good faith to maximize the value of the corporation over the long-term for the benefit of the providers of presumptively permanent equity capital . . .”).

Facebook is a Delaware company.

Re: Facebook establishing a venture arm to invest in startups

#78

Post by emcq »

a13n wrote: post #27

It's pretty interesting that FAANG doing venture capital is basically like legal insider trading. They clearly have data on web traffic, consumer usage, advertising spend, etc. that other VC firms and investors generally don't have access to. They can use this to understand entire markets, see who the incumbents are, estimate revenue/users, see who's up-and-coming, etc. Obviously within some margin of error. I wonder…

It's no accident Facebook got a deal because they had great data; there is public documentation that Facebook acquried WhatsApp (and likely IG) using data tracking users from a VPN service they bought for much less: https://www.buzzfeednews.com/article/charliewarzel/why-faceb...

Re: Facebook establishing a venture arm to invest in startups

#79

Post by ericflo »

hvaoc wrote: post #44

This will not work. If they are that good with information, they must be building products after products that people will love. Tell me one last known successful launch by Facebook in the last 2 years, outside tweaking their existing products. Only way it could work is if they share their wealth in other areas / people which must be invested in and will not get enough capital if not for them. Ex: Google Venture - So…

> Tell me one last known successful launch by Facebook in the last 2 years

Oculus Quest

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