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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

#131

Post by smabie »

objclxt wrote: post #38
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…

> Since startups aren't publicly traded, I don't think insider trading laws apply to trading their securities. FAANG is legally allowed to use their access to information to make better investing decisions than other companies are able to Insider trading laws apply to all companies, be them public or private. It is illegal to trade based on undisclosed material information the other party doesn't have - the law doesn…

I don't think you understand what insider trading is. You can trade on information other people don't have all day long. In fact, that's what a good market is for. What you're not allowed to do is steal other people's information and use that to trade.

Re: Facebook establishing a venture arm to invest in startups

#132

Post by dbuder »

alasdair_ wrote: post #67
Fezzik wrote: post #60

Earlier quoted context omitted.

I mean, that’s a bit of the stretch. The implication in “an offer he can’t refuse” is that the mob is going to kill you if don’t accept the offer, not that they are going to drown you in more dollar bills than you can swim through.

That was the point of the joke :) I don't mean this impolitely - the fact it wasn't clearly obvious as a joke means I should have tried harder.

It wooshed because we expect a sub optimal deal from facebook where they will eat your face if don't take their initial offer. Then they will undermine you anyway.

Re: Facebook establishing a venture arm to invest in startups

#133

Post by smabie »

scollet wrote: post #105
raverbashing wrote: post #68

Earlier quoted context omitted.

And? You'd probably walk away with at least 6 digits in your bank account. 7 or maybe 8 if you're lucky. This is the kind of money I wouldn't say no except for a very good reason.

Money > ethics in your worldview? This is compounding the issue and creating a toxic incentive.

Everyone has a price.

Re: Facebook establishing a venture arm to invest in startups

#134

Post by smabie »

shoo wrote: post #90

If you were an investor in Facebook, instead of Facebook investing excess cash, wouldn't you prefer Facebook to return the excess cash to investors? Then if you agree that investing in startups is a winner, you could reinvest the cash through some venture fund? Or if you disagree and feel that there's a better use for the cash, such as investing in index funds or paying off your student loans or buying a yacht or wha…

This is exceedingly fascinating. Thanks for the link!

Re: Facebook establishing a venture arm to invest in startups

#135

Post by scollet »

missedthecue wrote: post #116
scollet wrote: post #105

Earlier quoted context omitted.

Money > ethics in your worldview? This is compounding the issue and creating a toxic incentive.

Money is objective while ethics are not

This is a meaningless comment.

You can mark assets on a spreadsheet, plot profits on a graph, and the result is simply a representation of the abstract concept: finances.

When you factor intent, then money becomes objective. When you factor the ethics of the entity using financial influence, then the result is objective because it affects the real world.

I don't know how else to explain this, and maybe I can't convince you, but real people are affected by these choices.

Profits are never a meaningful metric precisely because they can't be divorced from ethics.

Re: Facebook establishing a venture arm to invest in startups

#136

Post by RestlessMind »

csallen wrote: post #112
riantogo wrote: post #69

Earlier quoted context omitted.

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.

The game isn't rigged because it isn't zero sum. Billionaires getting richer doesn't normally impact your ability to get richer. And as long as you're free to maneuver how you'd like, it shouldn't really matter to you that someone else is succeeding faster or slower. Also, it's generally the case that there are more opportunities to turn $1 into $2 than to turn $1B into $2B.

> Billionaires getting richer doesn't normally impact your ability to get richer.

I believe this is not true for multiple reasons.

First - regulatory capture. Once a sector of economy generates a handful of billionaires, legal / regulatory barriers go up which make it much harder for startups to compete.

Second - competitive barriers. Google can acquire all the search channels (eg. paying Apple and Mozilla billions of $$$ to be the default search engine on iOS / Firefox).

Third - price undercutting by subsidizing a subset of the incumbent's product portfolio by profits from other parts of the business. See: Amazon vs diapers.com.

So yes, the game is definitely rigged in favor of billionaires.

Re: Facebook establishing a venture arm to invest in startups

#137

Post by yesexactly89 »

ISL wrote: post #74
riantogo wrote: post #69

Earlier quoted context omitted.

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…

I disagree with your assessment of the options

Simply outlawing extreme ownership of capital, via high taxes is a way to avoid privacy issues.

Unfortunately, we don’t seem keen to enable people to live their lives. We seem keen on making people ogle these giant initiatives and enterprises.

I don’t believe that’s natural. Growing up “off the grid” until the 90s, I’m still aghast at how sycophantic people act towards Amazon or a Gates like rich person.

Then I started seeing how forced social interaction is for upper middle class especially.

I should point out my family wasn’t poor. On the contrary, my parents just wanted to raise us outside the mainstream.

Don’t get me wrong I, love the gaudy culture. What I’m talking out against is demands to organize it just so. To normalize to the point of absurdity human agency to propping up of finance markets and banal old men’s gambling fetish, lavishing praise and riches on men as “owners” of the things we build collectively at scale is absurd to me.

There’s too much evidence out there suggesting success like that is luck not skill, and continued success like that is due to corruption of human social goals, not a lifetime of extremely good luck.

Continuing to play that social ladder game is hilariously morbid motivation to me.

Why not just have these men take their genitals out and prove who can take more whacks to the sack. That’s really what all this stuff feels like to me.

Lookit Bezos dashing back in to save Amazon. The idea is the place is winning!! Oops reality gets in the way and they stumbled with logistics hard.

Thanks to lavishing Amazon with praise in the form of billions, they’ll power on through it no problem. Tens of thousands of employees spared!

Meanwhile, thanks to the tax system literally millions of people are fucked.

Re: Facebook establishing a venture arm to invest in startups

#138

Post by aspenmayer »

aspenmayer wrote: post #111
colonelanguz wrote: post #77

Earlier quoted context omitted.

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.

Has this law ever been enforced against a company; that is, is there a ore-existing verdict against a Delaware company for violating this statute? Or is this more of a hypothetical threat? What would the damages or penalty be for violation? It’s not like you can demand money a company should have made without cause or more importantly, verifiable harm to the counter-party.

*pre-existing

Re: Facebook establishing a venture arm to invest in startups

#139

Post by ta17711771 »

yeldarb wrote: post #88
riantogo wrote: post #69

Earlier quoted context omitted.

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.

But Facebook is publicly traded. If you truly think this is the case why not just put your $1000 in their shares and let it compound at the same rate as Zuck’s?

Some people don't want to support companies they don't believe in, regardless of potential profit involved.

Re: Facebook establishing a venture arm to invest in startups

#140

Post by ta17711771 »

colonelanguz wrote: post #126
missedthecue wrote: post #114

Earlier quoted context omitted.

"maximize the value over the long term" isn't the same as "upend the company to pick up a couple dimes"

I agree! Were you attempting to respond to my comment, or just venting?

They were responding to the top level comment.
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