The WSJ is reporting that Google is set to launch a venture fund to give it the option of investing in startups instead of just flat out buying them. The fund will be led by Google’s SVP Corporate Development David Drummond and Bill Maris, a long time business friend of Anne Wojcicki, Sergey Brin’s wife. Maris is a tech entrepreneur with a degree in neuroscience and worked with Wojcicki at a San Francisco-based for-profit company called Catalytic Health.
This hasn’t been confirmed by Google, and it’s clear they’ve been thinking about a fund off and on for years. From the article:
The move would make Google the latest technology giant to take on a more-formal role in seeding start-ups. Intel Corp. has had a large venture-capital arm for years, as have Motorola Inc., Comcast Corp. and many others. In the consumer-Internet area, Walt Disney Co.’s Steamboat Ventures has invested in a number of Web start-ups. So has Amazon.com Inc., which has funded a number of young companies without structuring a formal fund.
Their track records have been mixed. Corporate venture-capital arms have been hampered by challenges that traditional venture-capital businesses don’t face. Venture capitalists invest in private start-ups at an early stage, usually in hopes of a big payout if the company is sold or if its stock goes public.
Many start-ups fear that taking corporate money limits their options and comes with strings that could turn away other potential investors — such as a right to buy the company at a later date. Some funds with less competitive compensation have struggled to retain managers, and corporate venture funds often don’t allow senior employees to invest personal money in their funds, while other venture funds typically do.
This wouldn’t be the first time Google started a fund to invest in other companies. In June 2007 they launched Gadget Ventures, a pilot program that, in part, invests seed money in companies looking to develop for the gadgets platform. They have also previously invested through Indian VCs.
I wonder what the Google spin on VC will be…
I’d be wary of pitching to Google. A typical VC does not have the resources or need to ditch you and run with your idea. Google on the other hand can.
I wonder what kind of milestones Google will set for the startups they choose to fund. Or they could use this to set a precedent in the venture capital industry.
If Google is involved, they will surely check everything in and out.
http://blabtech.blogspot.com
I think Google brand and connections can add a lot to VC in technology.
Wow finally they are putting all that money to some use, but I doubt that they would fund smaller ideas, with Google I definitely think they would want to aim for some pretty good ideas.
Nice.. how to get funded?
The standards for leaking a story to WSJ vrs Techcrunch are interesting.
Does WSJ get first option to print – then it goes to Techcrunch.
Oh the politics!
Yes, how about funds ?
Would be fun to start a People Venture Fund. Let’s see.. with 1 billion members and everybody investing $100 (something like 50 pounds) we could buy Google and some promosing new comers… I am in!!
and later whos gonna buy the successful startup funded by google? or maybe google will control everything coz they have the decision making power, probably they end up working for google without any big buy out.
Google VC should invest in Orjii LLC. They should at least ask to see a demo of our technologies that aren’t public then consider if they want to invest.
Google should invest in Orj11 LLC’s new widget set, and technologies. Email us for a demo. The new tech isn’t public.
wonder how this would interact with google.org which also invests in startups
Anything with VC in it is a great opp. for the business world
My guess is that this is less about ROI and more about making sure they have a “farm system”.
Right now if someone approaches them with something that is interesting their only option is to acquire it, and bring it into the fold. If the product is far along that is great and the Google team and infrastructure can help push it out fast and big.
If the idea is promising but unproven they are best to let it incubate further in a start-up mode. If it eventually takes off they obviously get first choice on acquisition and if it is a dud there won’t look silly for acquiring junk.
The question for anyone who takes money from this is what would your exist options be if Google did not acquire you. Could they risk giving something of value to their competitors by letting them acquire what they did not want?
This is really good.. what they are doing.. instead of buying bigg niche sites they will be encouraging small upcomers which will reveal the new talent who are handicapped with funds..
It is indeed a good news, but what surprises me quite often is why
everyone becomes so interested in Google, when Google has its own
culture and style. In this way, Google would always be a Monopolist
in Search & Advertisement. I reckon, SERGEY and LARY was looking
at 500 projects and picked up top 20 projects, others was there in
the Q, which is still there…
We have seen in past, how Yahoo and Microsoft is struggling for its
share in this market and time is not very far, when Google would
be there like a Mega Giant, unless and until people like us tend to
think about Information system for every enterprises and find a way
to fund and expand business, rather than asking Google to do it…..
Bad idea to get Google funds at the start – you loose a chance to take their money on the exit and take a chance to be blacklisted by MS, Yahoo and all other “Google funs”…
It is essential that Google treat the Seed investing stage differently from the Series A/B investing stage.The care and feeding of the Seed Entrepreneur requires a much larger geographic footprint for sourcing than a Series A/B fund; a strong relationship working with and supporting the Entrepreneur Infrastructure already in place (incubators, tech transfers, economic development agencies); assistance with pre-investment company sourcing; and, assistance with post-investment company oversight.
Additionally, small and vulnerable seed companies are very wary of exposing their technology, business models, etc. to corporate investors. Series A/B companies are a little less wary because of their VC/Institutional partners, but Seed companies are very leery of any outside entities.
The Google Fund should be designed to be a 2 part initiative with distinct processes and metrics: one part for the Seed and one part for the Series A/B.
What is Google?
Glad they a are sharing the wealth a bit. Hope they consider smaller startups too.
Finally Indians have a chance I guess.
Rather than just a couple of venture firms in 2007 and the Google bus in villages.
http://www.goog...e.com/ventures/
Do u guys find this venture fund suspect? What if its just a strategy for them to actually gauge competition that are gaining traction in the market and to survey new ideas as well. My company is developing a unique product that we think will sell and we are thinking of going to Google but are wary of their intentions. Our product is still in its inception stage and if Google happens to get a hold of the idea, it would literally take them just a day to create and implement our project without us knowing and poof! Idea gone! Whats your take on this?
walruswheedchic; did they do that with the game changing sites such as flikr, twitter, YT and many other successful start-ups!!! don’t be paranoid. if your idea is novel enough they wont see its value or proposition – else they’ve already thought about it!!! pitching to GVC will be no different to any other VC.
all the best
from another lewny