Cory Levy - Latest Comments

Re: NextGen Conference - a great success!

netspencer — Wed, 25 Nov 2009 19:29:39 -0000

Awesome. It was a lot of fun. I'd definately come back next year. :)

good luck.

Re: NextGen Conference - a great success!

Kevin Hartz — Wed, 25 Nov 2009 13:50:43 -0000

Thanks Cory!

It was a great event and great turn out of entrepreneurs!

Re: Founders Fund (Day Three)

Ed Batista — Thu, 09 Jul 2009 11:25:47 -0000

Great to meet you in person, Cory, and I'm glad your trip was so productive. I hadn't heard about Tina's book--I'll look it up. Good luck in your next venture! --Ed

Re: More on Brad Cohen

cordor91 — Sun, 05 Jul 2009 20:09:18 -0000

Thank you for your comment, Erin. Brad is a great guy. I am fortunate that I was able to both meet him and here him speak. If you are interested, I can definitely introduce y'all via email.

Are you enjoying your current job?

________________________________

Re: More on Brad Cohen

Erin Myers — Sun, 05 Jul 2009 15:32:09 -0000

I understand first hand what Brad Cohen went through in school and finding a job. I grew up with a moderate-severe hearing loss. I went to a special school for 5 years before my parents put in a public school. I struggled in school, but was able to earn a bachelor's and master's degree in Special Education. It took me about 8 years before I was hired as a permanant special education teacher. I know that I had gone to more than 50 job interviews before I was hired. I cried at times while watching the Front of the Class movie, because it reminded of what I went through in my life.

Re: Founders Fund (Part One)

danielbru — Wed, 24 Jun 2009 17:57:32 -0000

Sounds like a good first day :)

Re: Summer Plans!

cordor91 — Fri, 29 May 2009 16:47:59 -0000

Sounds like a plan! I'm working in the Presidio of San Francisco, however I'll probably make a few visits to Palo Alto to see the area. You're based in Palo Alto...right?

Re: Summer Plans!

Chris Yeh — Fri, 29 May 2009 16:31:52 -0000

Very cool! Let's meet up while you're in the Valley.

Re: A Market For Private Companies?

nwcnwc — Fri, 15 May 2009 12:41:04 -0000

Our present financial crisis has shown that not only do non-accredited investors (i.e. normal people) not understand risk, but neither do most so-called "sophisticated" investors. And I'm not even talking about the people who were fooled by Bernie Madoff (most of those people, though, probably inherited their money -- people who've actually toiled and sweated to make large sums of money by definition aren't that stupid with it). I'm talking about the extremely high-paid and for the most part well-educated money managers at various banks and funds who got caught up in the extending-ridiculous-credit-to-poor-people-who-live-in-overpriced-houses madness. If they were making "rational" decisions in their own heads, it can only be that there was something wrong with their heads. They didn't understand the risk of the "securities" they were buying.

But these people are our smartest and brightest -- they MUST have understood the risk. For whatever reason, they thought it was worth it. Worth it for themselves, that is. And it probably was. So their compensation arrangements must have been backwards.

But I digress. My point is that nobody properly understands risk, and even if we mortals were capable of understanding it, in aggregate we will always end up taking too much risk because the downside risk is limited (a bank account at zero, or bankruptcy), while the upside risk is perceived to be unlimited (in reality, I doubt there's much difference between 1 trillion and 2 trillion).

But I still digress. The original issue is Cory's dissatisfaction with the accredited investor rule. First off, this rule certainly doesn't restrict start-ups from taking money from friends and family. Second off, the government rightly controls lotteries and gambling. Investing in start-ups you know nothing about is a little like gambling in a lottery. Third off, there is no shortage of bad people out there who would gladly swindle money from our 80-year-old grandmothers. Not all of these bad people are in jail, and the SEC is never going to find all of them.

So to wisely invest in a company requires both that you have good reason to trust the people running the it and that you have and take the time to understand and feel confident about the business model. If you are missing one or both of these, then your investment is likely adding to a bubble that's going to explode in society's collective face and require wounded society not only to heal itself, but bail you out too. That's what we're living through right now.

The accredited investor rule supposedly keeps this from happening in certain areas of commerce, and now supposedly we've got to find another rule to keep this from happening in the way it just did. Personally, I think government is no better at making rules than bankers are at making loans. So government will look busy until the dust settles, then society will collectively start building its next bubble, with or without accredited investors.

Re: A Market For Private Companies?

Chris Yeh — Thu, 07 May 2009 13:45:43 -0000

While I agree that people should feel free to invest as they see fit, it is also the case that political pressures would inevitably kill any private market that allowed unsophisticated retail investors to participate, regardless of the caveats and warnings employed.

It doesn't take a genius to figure out that if you have no income, you probably shouldn't buy a house, yet in the wake of the subprime fiasco, the answer has been to tighten standards, not educate people on why borrowing $250K when you panhandle for a living is a bad idea.

Re: A Market For Private Companies?

cordor91 — Tue, 05 May 2009 22:15:04 -0000

Thanks for your comment, Fred!

Do you foresee this happening? Also, in our current economic environment, have you noticed capital raising restrictions which are harming small businesses? If yes, what sorts of restrictions are on your mind?

Re: A Market For Private Companies?

fredwilson — Tue, 05 May 2009 09:14:44 -0000

the only way i see this working is if this is an unregulated market and the only way that is going to happen is if it is limited to "qualified investors" - that means super rich people and institutions

Re: A Market For Private Companies?

cordor91 — Mon, 04 May 2009 22:08:24 -0000

Without question, this should be a buyer beware market. Investing in a startup or private company entails great risk and if one is a beginner, statistically, that person will not come out as successful as he/she would have envisioned.

If a private company wanted to raise 100k, would the company be legally allowed to raise money from the local community (assuming people in the local community are not 'accredited investors')? If the answer is yes, would raising from an unaccredited investor hurt the company? The small business community is hurting and needs capital.

Changing slight subjects, do you see a problem with founders illiquid assets?

Re: A Market For Private Companies?

Josh Tabin — Mon, 04 May 2009 17:16:20 -0000

The key thing to understand is that the higher return potential that an investment in a private startup company can potentially bring also has a very large risk factor that only investors with adequate capital reserves should be allowed to make. The accredited investor rule was put in place to protect unsophisticated investors from being taken to the cleaners with bad investments. Public companies have the SEC to mandate disclosure of risks so that a public investor has enough data (in theory but not always in practice) to make an educated investment decision about investing in a company's stock. No such requirement are in place for private companies so to be fair to small private firms and not require them to engage in costly public disclosure practices, the SEC flipped it and put the onus on the investor but requires them to be "accredited" which I define as someone who should be intimately aware of the existence of risk. The thought process is that "un-accredited" investors won't have that level of sophistication and risk being taken by schemes or just lose their investment due to a company's inability to succeed...something that happens more often than not.

I will concede that the SEC has failed the public many times in allowing bad people to pull the wool over investor eyes recently. But that is a factor of failed implementation of the rules and not the rules themselves. And there are no rules stating that small companies may not take investment from "un-accredited" investors; it just limits that company's ability to affect an IPO or be acquired by a public company.

It is also for the protection of the small companies that these rules exist. How many lawsuits would we see in this litigious society that we have if anyone could invest in anything without some level of required investing acumen? I feel that it is in any startups best interest to take capital from accredited investors only because it mitigates significant risk. Any market for investing in startups similar to the public markets would require such a regulatory overhaul that I doubt it would work, let alone ever happen.

Re: Wachovia (WB)

Cory Levy — Fri, 31 Oct 2008 23:17:02 -0000

Sold it at $20 a couple weeks ago...the day before it dropped to $2

Re: Cory Levy - Life without Facebook...

sethlevine — Thu, 12 Jun 2008 09:12:10 -0000

there's a pretty amazing generational shift around social media, cory. people of . . . um . . . my age . . . use it, but i think are mostly messing around on the surface (since we all grew up with email - actually with bulletin boards, then usenet, then finally email). i had an email account decades before facebook. i suspect that there are plenty of people in your age group for whom their first real communication method online was a social media platform. this has to translate into a different way of using social media as they grow older ... seth