Facebook establishing a venture arm to invest in startups
It's pretty interesting that FAANG doing venture capital is basically like legal insider trading.<p>They clearly have data on web traffic, consumer usage, advertising spend, etc. that other VC firms and investors generally don't have access to.<p>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.<p>I wonder if this is how Facebook identified that Instagram was on the path to success, and knew $1B was a great deal. Meanwhile everyone at the time thought they were crazy for spending that much.<p>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. (IANAL)<p>It seems like they have a high chance of getting a great ROI. Once you're a big tech company, this is just another way of monetizing the vast troves of data you have.