The World, And Facebook, According To Reid Hoffman

Facebook stock is likely an attractive long-term buy, Y Combinator might be seeing stress signs from its expansion, and Greylock Partners’ Discovery Fund is now three-quarters through its $20 million in capital.

These were nuggets from Reid Hoffman’s appearance Monday at the TechCrunch Disrupt conference. Hoffman, a partner at the firm and co-founder of LinkedIn, was interviewed on stage by Michael Arrington, the founder of TechCrunch and now a seed investor.

He said his initial Facebook investment was $37,500 at a $5 million valuation. Now he describes himself as bullish on the social network’s long-term prospects despite its flagging IPO and its current $18.80 share price.

“If it continues at this price, it will be a good buy at some point,” said Hoffman, adding that its challenges making money with mobile shouldn’t be hard to solve. “I’m very bullish on its future prospects.”

He said he would wait for share lock-ups to pass and review the company’s stock price before mapping a stock strategy.

On the topic of the Y Combinator, he said the startup incubator began with a commendable goal. It hoped to prove that more than five to 15 tech startups should matter each year to investors because of their success and size. “I think that is really a good mission,” he said.

But its expansion now faces founder Paul Graham with the question of whether to expand services to keep up with demand. “I definitely think they are seeing some stress signs from size,” he said.

Hoffman went on to say he still views social investing as attractive, despite the often expressed Silicon Valley opinion that it is yesterday’s new, new thing.

“I actually think social is very much alive,” with massive new areas to explore for social startups, he said. One new investment of his is Wrapp, the social gift card company; another is Edmodo, a social network company for teachers and classrooms.

Hoffman added that his two-year-old Discovery Fund has distributed $15 million so far into 75 companies. Investments are often $100,000. He said a number of companies have gone on to raise follow-on funding from firms including Benchmark Capital, Andreessen Horowitz and Khosla Ventures.

Photo courtesy of Shutterstock.

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