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Google Gets Into VC Business

By Paul Kenjora | March 31, 2009

Recently all the major news papers have covered the same story. Google is getting into the VC space. Its nice to know the company that saved the web is now saving the VC market. Although I expected some new cool social investment platform instead of a simple. "We’ve got $100 Million to spend.". I guess its the Google version of a bailout.

Its getting attention:

New York Times Wall Street Journal Huffington Post

My biggest concern is their term sheets. Y-Combinator has your best interests in mind mainly because they don’t have the full expertise on hand to take over every project. With Google however, we are talking about a company that has built up a reputation for acquiring smaller ventures for no other reason than to corner the market. Take Grand Central for example, acquired shut down, and now cornered. So whats left to protect your ongoing involvement in any startup Google sponsors?

Typically there are a few things, talent, time to market, term sheets, IP, and sheer luck. Google has talent in spades. I guarantee they can get a product to market faster than anyone. Without looking at their term sheets I can’t be sure but I’m guessing their terms like all other Google agreements are stacked in their favor. You are definately out gunned in the IP department. As far as luck, Google makes its own. Any of the above are risks for any startup, the danger here is that they all come from one investor.

Would I let Google invest in my startups? I haven’t gotten an offer yet so I can’t tell you. Will I go out of my way to get an offer? No, for the reasons named above, but I will keep an eye on this one to see where it goes.

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Topics: Tech News | Comments

  • It means that Google likes to do anything in everything. We can't stop them because they can. Like their new "Buzz" feature on their email. It seems like Facebook. -Amy
  • Nice post, very interesting!
  • I am looking for a venture capital for my trading business ,can anybody suggest me where to approach for a vc?
  • It depends on the startup, to be honest. If it was something that brought me unexpected success, then sure, why not. But if it was my secret project I've spend years working on, and was planning to keep doing that - then no way. Instant $ is always a nice concept, but always think about the long run.
  • I am looking for funds for one of my ambitious ideas. Does anyone know how i can get funding from a VC or what's the procedure for the same.
  • To be honest I don't really care why they do it. If they offered me a mil, or even half that for my startup, I wouldn't hesitate. Sure, potentially I could make more ... but from a different perspective, think of how this $ could help your next startup! Not to mention you'd be driving a nice car while doing it ;)
  • A seed round is super critical to a startup. Your first million may seem like the most important thing at first but the terms surrounding it will dictate if you are able to get further funding. later stage investors may be turned off by Google's terms. Anyone know if this is true?

    Also, no one drives a nice car in a 2009 startup. So don't plan on it.
  • Not surprised at all with the news. I guess this is Google's effort to take advantage of our resources to support innovation and encourage promising new technology companies. It seems a great initiative from a business point of view. What is it for the public??
  • google's version of everything is "here, have couple million dollars, do whatever you like". It was the same with mapping the underwater world. Who needs that? How is that supposed to make money? But still google did it just because they could.
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