On Sept. 10, 2001, Robert Levitan was mourning the demise of his Internet startup. Within hours, the New York native was mourning for his city.

Flooz.com, a once-promising online gift company he co-founded in 1999, had closed Sept. 10, and Levitan had planned to head to Europe for a few months to teach at business schools in London and Paris. Then the planes struck.

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Levitan spent the ensuing weeks working with a charity group, helping to organize volunteers to work at Ground Zero and elsewhere in the city. "If you saw any of the response in New York, you come away feeling better about humanity than you did before the event happened," he says. "I'm a bigger fan of New York City today than ever."

Indeed, there are few technology entrepreneurs who are as high on New York as Levitan, 46, who has co-founded three companies in the city, including Flooz and, more successfully, iVillage Inc., which NBC Universal Inc. bought in 2006 for $600 million. He also chose to base his latest endeavor, video-sharing startup Pando Networks Inc., in Manhattan despite Silicon Valley's gravitational pull on engineering talent and venture capital.

Clearly, Levitan has flourished in his hometown, and he rejects the idea common in local tech circles that startups launch in New York at their peril. The city is "the most important social experiment in the world today," Levitan says, citing its creative and intellectual energy as a valuable resource for entrepreneurs. "There are times when people tell me I should be doing this on the West Coast, but I prefer to live here."

Levitan's entrepreneurial spirit took hold early. Shortly after graduating from Duke University in 1983, just as video cameras were becoming popular, he started YearLook Enterprises Inc., working with high schools and colleges to help them publish video yearbooks.

But it was his success with iVillage, a woman-focused Web site Levitan co-founded in 1995 that made him briefly a corporate celebrity of the dot-com era. He led business development at iVillage, which went public in 1999, raising $250 million. However, he left shortly after the initial public offering to launch Flooz, though he couldn't roll his gains from iVillage into Flooz because of a six-month lockup on the stock. Instead, the startup raised $40 million in venture capital from strategic investors including NBC, NextCard Inc., Mobius Management Systems Inc. and Hikari Tsushin Inc. and from a list of backers such as Silicon Alley Venture Partners LLC and Oak Investment Partners LP.

Flooz took off fast. It racked up sales of $30 million in 18 months, and Media Metrix in 2000 ranked the company as the top online gift site. Yet the end came even quicker. Its largest customer, Cisco Systems Inc., scaled back as the tech bubble burst, and it became ensnared in a federal investigation into fraudsters stealing credit-card data and making purchases over e-commerce sites such as Flooz. The coup de grace arrived when Chase Merchant Services LLC, which processed Flooz's credit card sales, required the startup to maintain a bank balance of several million dollars to cover future fraud-related costs.

Despite Flooz's failure, Levitan maintains that the company was a better business than iVillage and grew faster. Its downfall, he says, resulted from a cascade of unusual events. "The hardest thing as an entrepreneur is dealing with success and failure and losing perspective from either, meaning thinking that success is due to your brilliance or the failure is due to your failure," Levitan says. "And it's important as an entrepreneur to keep going and learn and realize that some of it is not in your control."

After Flooz collapsed, Levitan worked as a consultant until 2004, helping launch a TV show in China for Pearson plc and working with AT&T Wireless Services Inc. to set up its Internet division.

But the consulting stint didn't satisfy Levitan's desire to start something of his own. "I enjoyed working with really smart people, and I enjoyed developing new applications of technology, and I enjoyed the speed of development in a startup, as opposed to the way big companies operate," he says. "So then I started to look around."

Opportunity arrived when VCs asked him to help start and run a then-unnamed peer-to-peer video company. At Pando, Levitan joined a team of seasoned technologists, including Laird Popkin, formerly director of digital technology for Warner Music Group and chief technology officer of the Internet division of News Corp., and Yaron Samid, co-founder of DeskSite TV.

Pando may be Levitan's most promising startup, given the avalanche in online video and in advertising. If the venture succeeds, it's sure to attract big Web, media, telecom or tech companies.

Yet the startup may also be his riskiest. Competition is fierce, with numerous rivals vying for a piece of the video-sharing pie, including publicly held Akamai Technologies Inc. of Cambridge, Mass., and VeriSign Inc. of Mountain View, Calif., and privately held BitTorrent Inc., of San Francisco, which has received $28.7 million in venture capital from Accel Partners of Palo Alto, Calif., and DCM of Menlo Park, Calif.

Pando makes peer-to-peer software--the same approach of some online music services for swapping audio files--that allows consumers and enterprises to download, stream and share large, memory-choking digital files over the Web. These range from advanced applications, such as watching Internet-based television and posting videos, to more prosaic tasks, such as sending large attachments by e-mail or instant message.

Levitan says he chose Pando as the vehicle for his return because the company is a perfect intersection of media and technology.

Pando has raised $11 million from three investors: BRM Capital, a Herz-liya, Israel-based early-stage venture capital firm; Wheatley Partners, a tech-focused private equity firm in Great Neck, N.Y.; and Intel Capital, the venture arm of Santa Clara, Calif.-based Intel Corp.

Levitan says Pando is now looking to raise an additional $10 million. The company expects to start fundraising by the end of November. Charlie Federman, formerly a managing director at BRM and currently a member of Pando's board (he is now a managing partner at New York venture firm Crossbar Capital LP), says BRM is "very happy" to continue investing in the company and is unconcerned about Levitan's record at Flooz. "I believe Robert learned a lot from that experience," Federman says.

Indeed, one of Levitan's strengths, Pando's investors say, is his ability to outline a clear mission. "We look for very high-quality entrepreneurs to back, and Robert is an entrepreneur who has been around the block and displayed a tremendous amount of energy and a tremendous amount of sophistication in both customer-facing interaction and in the capital markets," says Lawrence Wagenberg, a general partner at Wheatley.

Lewis Schiff, a personal investment guru who worked with Levitan to create a finance Web site at iVillage, says he excels at assembling teams. "I don't think Robert is particularly money-driven per se," Schiff says. "He just loves to get smart people together and help them build things and turn them into reality."

Reality is setting in. Since Pando launched its consumer service in 2006, over 14 million people in more than 150 countries have downloaded its software. Pando gives the application away, making money from companies that use it to deliver video software and games. Customers include cable sports network ESPN Inc., video-blogging service Blip Networks Inc. and online video game company K2 Network Inc.

Levitan won't disclose Pando's pricing, but says the service on average costs 80% less than what traditional content delivery networks would charge. He also won't offer details about revenue or financial goals, saying only that revenue is growing at 15% to 20% per month.

Yet Levitan predicts that Pando is destined to become part of the essential infrastructure for delivering online media. "We believe the Internet will be the dominant media delivery platform, period, meaning all TV shows, all movies, all music, all video games, all software. We'll be distributed electronically across the Internet directly to consumers." Spoken like a true New Yorker.