Feb 24, 2023 · 42m · news
IAC CEO Joey Levin: Why Value Investing is BS; The Most Insane Element of SPACs | 20VC #982 · 20VC with Harry Stebbings
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this deep-dive interview, IAC CEO Joey Levin shares critical insights on corporate leadership, the structural flaws of SPACs, and the realities of navigating macroeconomic downturns. He outlines his personal philosophies on value investing, strategic resource allocation, and the foundational drive required to sustain a successful executive career.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 23.2% of the talking time here. How this is scored →
Harry as informed peer 3.4 Guest teaching 2.9 Guest disagreement 1.8 Harry pushing back 2.9
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 24:44 SPAC Mechanics Rejection
Joey aggressively rejects the structural validity of SPACs, arguing that granting uninformed third parties a free option to sell a company to the public in three months is completely insane.
Hardest push from Harry ▶ 8:20 Worker Entitlement PushbackHarry forcefully interrupts Joey to vent about younger employees constantly demanding high salaries, bonuses, and remote work, demanding to know when business needs will be prioritized.
Biggest teaching moment ▶ 13:45 Private vs Public Valuation DynamicsJoey educates Harry on why private market valuations remain artificially inflated, citing dry powder, LP/GP misaligned incentives against markdowns, and the lack of short sellers.
Harry holds his own ▶ 18:59 Elements of Style QuoteHarry demonstrates mastery over product messaging principles by reciting William Strunk Jr. and E.B. White's Elements of Style rule on concise writing verbatim.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Childhood Dreams, Fitting In, and the Inevitability of Success | 2 | 1 | 0 | 0 | Harry opens with rapport-building questions regarding Joey's childhood career aspirations, golf, and career trajectory at IAC. Joey warmly reflects on mentors like Barry Diller and Jack Welch without any friction or pushback. | |
| Career Advice for Graduates: Finding Work That Excites You | 3 | 2 | 1 | 4 | Harry presses Joey on young employees demanding remote work, high salaries, and balance despite macro downturns. Joey thoughtfully contextualizes this as a result of repeated government bailouts after 2008 and the pandemic. | |
| Recession Morale, the Figma Valuation, and Counter-Cyclical Cash | 5 | 4 | 3 | 3 | Harry invokes Benjamin Graham and Sequoia's 100x revenue investment in Figma to probe Joey's claim that value investing is misunderstood. Joey politely reframes value investing to include paying high multiples for high future growth. | |
| The Valuation Mismatch: Private Markets vs. the Public Reality | 5 | 4 | 2 | 3 | Harry brings data from seed markets and quotes PE investor Orlando Bravo to ask if current private valuations reflect reality. Joey educates Harry on why private markets artificially delay valuation write-downs compared to short-seller-influenced public markets. | |
| Simplification, concise messaging, and Angie's Unique Corporate Values | 4 | 3 | 2 | 5 | Harry recites Strunk and White's Elements of Style verbatim to illustrate concise messaging, but challenges Joey's emphasis on corporate values as generic fluff. Joey pushes back by sharing specific uncomfortable values instituted at Angie. | |
| The Logistics of Dual CEO Roles and Work-Life Choices | 5 | 5 | 3 | 4 | Harry brings up SPAC collapse stats (98% below offer price) and quotes Henry Ellenbogen. Joey forcefully criticizes the core mechanics of SPACs, calling the three-month free option given to outside investors completely insane. | |
| The Psychology of Wealth, Parenting, and Character-Building Adversity | 2 | 2 | 1 | 2 | Harry asks reflective personal questions about net worth swings and instilling drive in wealthy children. Joey candidly shares his parenting internal conflict between shielding kids and building character through adversity. | |
| Childhood Frugality, Drive, and Turning Around Dot Dash | 3 | 3 | 2 | 4 | Harry jokingly calls out Joey's mother's extreme frugality rules as harsh on children. Joey defends the upbringing as healthy ambition-building before breaking down IAC's disciplined framework for turning around Dotdash. | |
| CEO Resource Allocation and the 20VC Quick Fire Round | 2 | 2 | 2 | 1 | Harry conducts a quickfire round covering marriage, venture capital, and board members. Joey playfully dismisses venture capital before cautioning against overfunding startups with cash. |
Statements from this episode (19)
Levin: The structural design of SPACs is completely insane
“The way the SPAC works, you build a company for as long as it takes you to build a company, you get it to a position where you think it can maybe endure the public markets, and then in that critical moment, you give somebody else who doesn't know your company …”
Levin: Success clusters form when high achievers inspire peer competition
“I think that the reason they come in clusters is because they have good role models or they see what's possible. In other words, if you're in a group where, and then there's a sort of natural competitiveness too, but if you're in a group where people are achie…”
Levin: Taking clear stances is essential for career advancement
“Having opinions, I think, is a really important thing to advancing in an organization, because you stand out with opinions. You know, you take a position, and taking a position is an important thing to do.”
Levin: Subconscious actions and media consumption reveal true career interests
“If there's something that really fascinates you, you're, even if you haven't identified it, your actions are identifying it.”
Levin: Younger worker entitlement stems from bull markets and bailouts
“I think that, that the level of entitlement that we see in, in the younger generation of that year or those years is, is I think related to That a general bull market supported by when things go wrong, don't worry somebody else comes to the rescue externally.”
Levin: Elevated employee workplace demands will rebalance in a few years
“Look, it, we're at a period where a lot of things are cyclical, and I think that will come back into balance over the next few years.”
Levin: Buying high-multiple growth companies can still be value investing
“Value investing also can be buying something at a very expensive multiple or a very high, I shouldn't say expensive, I should say a very high multiple, but that there's value there because of what you believe in the growth and the future.”
Levin: Investment opportunity requires holding capital until markets freeze
“When capital is scarce, things are cheap, and when capital is abundant, things are expensive. Where the opportunity is, is when you've built up capital and been able to hold on to it through those periods to be able to take advantage of the moments to be greed…”
Levin: IAC holds over $1B in cash and zero parent debt
“We're well over a billion of cash and no debt at the parent level, and so we're, we are well capitalized to take advantage.”
Levin: Private market participants are incentivized to maintain pretend valuations
“Everyone in the ecosystem is incentivized and able to maintain sort of pretend valuations. Meaning the investors want to keep their marks where they are. Their LPs actually want them to keep their marks where they are because they don't want to look bad. The c…”
Levin: Private market valuations are skewed because only believers vote
“In the private markets, only the people who do believe get to vote, so that's gonna be a skewed vote.”
Levin: Valuation multiples will not expand soon nor snap back
“There's no snapback, you know, even if you say, earnings take time to grow. Earnings don't typically, at large, grow in multiples. They grow in You know, increments, percentages, and when that happens, markets grow and valuations grow, but there's no catalyst …”
Levin: Profit margins are earned by simplifying processes for customers
“The more you simplify, the more margin you're entitled to, because that's how you create value for your customers.”
Levin: Effective corporate values must force uncomfortable internal decisions
“The values should make you uncomfortable. Not always. I mean, but there should be times where they force uncomfortable decisions and uncomfortable discussions where you have to call out colleagues, not in a mean way, but where you have to call out colleagues a…”
Levin: Work-life balance is fundamentally an explicit choice
“It's, you have to make, look, you, nothing is so extreme, it's one or the other, but there are people just fundamentally that make a choice, and some choose work, and some choose life, and I don't We grudge anybody which one of those two things they choose, bu…”
Stebbings: 98% of SPACs trade below their original price
“When you look at SPACs today, I think, like, 98% are trading abysmally below, you know, trading price originally.”
Levin: Depressed SPAC companies will either grow or go private
“Which means they'll either have to grow out of that by being big enough that people have to pay attention to it, or yeah, they'll probably go back private and, you know, try and work things out there.”