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Google Ventures

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167 pointsepi0Bauqu48 comments

If this is anything like every other corporate venture arm that has ever existed, this will be a political (interally) and financial mess. This may also mean that the acquire-to-hire era is coming to an end at Google, which would be a negative situation for seed investors such as Y-Combinator. Overall, I'm not seeing the value equation here -- it's not as though Google and its employees didn't already have a birds'-eye-view of the startup scene.

It might not be like every other corporate venture arm, though. A lot of the things Google does, they do differently from other corporations. I've met these guys and I'd tend to give them the benefit of the doubt.

I agree that it might not be like every other corporate venture arm. Although, if I had to speculate, I think Google is doing this because it needs to diversify its business outside of generating cash through advertising. By investing in ventures, Google should be able to supplement its income nicely, keep its stock price high, and not have in increase operating expenses too much should anything that they invest in takes off.

If I were a shareholder, I'd much rather have them pay me a dividend than enter the distracting world of venture capital. These types of moves inevitably risk turning the company into yet another bloated enterprise, even if they are successful in their investments.

Google has always had a significant amount of cash. They used to use that capital to do really interesting, strategically smart things, like buying dark fiber. This was similar to Apple's philosophy - you don't see Apple distracting themselves with some sort of "Apple Ventures" play; instead, they will take advantage of their cash position to do things like cornering the market for miniature hard disks, which leads to a direct benefit to the bottom line.

Methinks there are too many cooks in the kitchen.

Wait, are you leaving out that block of time that comprises most of Apple's history where they made bad business decision after bad business decision?

I think that their motivations are different too. Wanting to build companies that might one day compete with Google is unthinkable; so one must assume these are ventures that either do something totally different from Google's current businesses; or are somehow attractive as "experiments" Google doesn't have the focus to perform itself (the last obvious category is "companies Google wishes to acquire"; but smart founders who happen to have such an idea would not use Google Ventures simply because of the conflict of interest).

Btw, is this typical of corporate venture funds or is Google trying something new?

Wanting to build companies that might one day compete with Google is unthinkable

I don't see why that would be true. Nearly any web company might one day "compete with Google", which would rule out a lot of potential startups. Investing in or buying out a competitor is a long-established strategy used by many companies.

Do you see the future of YC investments as being acquisitions or building profitable companies?

Corporate venture arms like this tend to be too conservative and not willing to take risks.

"If you would like your venture to be considered for funding, email is the best way to reach us. Please limit your presentation to no more than 20 slides or three type-written pages. Unfortunately, due to the large volume of email we receive, we can not promise a response to all inquires."

The ones that we really like, we'll just send to our product team. Those will be the ones with no response.

Yeah, Google hasn't stolen your idea yet because they hadn't launched a venture arm to serve as a honeypot for hackers and their brilliant ideas.

Agreed. If your strategy to compete with Google is, "They haven't heard our idea yet." you're probably screwed.

Or simply the fact that you should probably have more than an idea in hand. i.e. early execution.

"We welcome new ideas. However, please do not send us information that you consider to be confidential or proprietary. Because of what we do, we receive a high volume of business plans, presentations, pitches, memos - you get the picture - and because these materials are often similar, because they come to us in a variety of forms, and because we read a ton of stuff, we cannot and do not accept responsibility for protecting against the misuse or disclosure of any information unless we have expressly agreed (in writing) to do so." -- http://www.google.com/ventures/contact.html

Is it just me, or does this seem like a bad idea for entrepreneurs? I mean, if Google backed you, wouldn't that make you less desirable to many acquirers who compete with Google?

Fair enough, but furthering the question: If you were made an offer by google to acquire your company and google ventures is your sole investor. Who would help you leverage or give your company advice on how much you could really earn from the deal.

No, it wouldn't. I've been at companies that took money from large company investment arms (in my case, intel and idg) and it didn't really change things either way. Well, a little on the positive side from a connections standpoint and a lot from the fact that they gave us moolah.

(not speaking for google, btw) That said, this isn't an april fools joke, it's real. Rich Miner and Bill exist!

I do wonder to what extent Google can control the company from the board. It seems they could abuse this control to make sure that the company is not able to compete with Google, except on its terms.

To me this looks like another google idea to outsource projects to smart volunteer people, who are not on Google's payrol.

Maybe this is similar to the various Google initiatives: android application competition, Google Summer of Code, Google Code Jam etc.

I think this is pretty smart because even if some project do not work out, but Google decides the people were valuable, Google can recruit them.

Maybe this is a way to provide more degrees of freedom to some of the more promissing 20% projects that don't make sense internally?

Is this not in direct competition with their "hire-by-acquisition" model? Generally, Google acquires companies early on for a price that is favorable to the founders, but wouldn't be favorable to any institutional VC since it wouldn't "move the needle" enough. If Google Ventures invests, then this means that they'd be hesitant to sell for a founder-friendly price to google itself.

Then again, maybe companies that say no to an early stage acquisition, are prime candidates for investment. Something that was impossible before Google Ventures.

Seems to me their 'innovation' machine stopped working long time ago. It was expected though, after all those acquisitions. In reality, I haven't seen anything 'new', but just 'better'. This could be their way to go through the downturn.. As for us, we've applied at YC, but when I weigh it out, it's not the money that we really need, but guidance. Real costs of doing a startup, in the beginning, cant be a lot more than 100€ per month. If they are, you are simply not an entrepreneur...

Two things:

First, I'm not sure Google has ever made anything new. They've always just done it better. And that is a kind of innovation. In fact, I would argue it's the only kind of innovation. Making new things exists on a completely different level.

Second, you are right that for start ups the biggest need is guidance. But I balk at your 100/month figure. Cost of living is a cost. Even in the cases when it isn't monetary (say living in your parent's basement), there's an opportunity cost.

true. it's incremental innovation. However, they're bad at it too IMHO. Search hasn't changed since they've launched. And even then, they had nothing new..Their new algorithm..blahh. Using microcomputers for search processing. Thats the startup thinking, alright, cut all the costs, do it cheaper, do it better. There is no recipe, but they hit the right time. Thats what they did right, recognize the moment. However, google search sucks, and it sucks badly. Crawlers are as bad as spam. It clogs up. It's inefficient...and Google is too big to do anything about it, it's victim of its own size. There ARE better ways. I miss those days when we pulled hair by trying to save a KB in the mem.. efficiency and efficacy for their own sake.

Regarding the 100/month, my starting point is that you've gotta live anyway, regardless where your efforts are. I understand your view, I am trying to change it in self, and found that I approach my business efforts with much higher perseverance... = I am doing it no matter what, and I will find the cheapest way to do it, it's worth it!

Good Luck!

I don't know if I'd want to pitch my idea to Google at such an early stage. They have enough resources to duplicate a lot of entrepreneurs' efforts. Seems like it is still best to start small, think big, and dream even bigger. Pitch the idea to Google once it has tangible promise.

My gut tells me to head to Google for sizeable funding, on the order of 100k and above. Anything less and I'd keep it with places like YC and friends and family (oh and fools too). Just my 2 pesos

Is this for real or did Google start with the April jokes early this year?

Wow, finally, a real competition to Y-combinator?

No; they're planning to operate like a regular VC fund.

The fund will focus primarily on companies seeking seed funding and early stage funding, and Google Ventures will have the ability to make investments ranging from tens of thousands to "several tens of millions" of dollars, Maris said.

http://www.wired.com/techbiz/media/news/2009/03/reuters_us_g...

Sounds like competition to me. But it may also bring new opportunities for YC start-ups to be bought.

The small investments are not what makes YC YC.

Existing VCs also have the ability to make investments in the tens of thousands. But they rarely do because that's not what they're designed for.

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There's some confusion in what "seed" means in investing, since when YC came around it kind of changed the rules. To VCs "seed stage" means "half a million dollars", not "$15k and Paul's secret rice and beans recipe".

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Or maybe some of us just hate it when people whine about their comment scores, instead of providing commentary relevant to the discussion?

how? this seems a lot more traditional VC:

We invest anywhere from seed stage to mezzanine and embrace the challenge of helping young companies grow from the garage to global relevance.

Does this mean mentorship? Demo Day? Who knows, but I think not...

My Angle: I am curious to see how Google structures their fund. How entrepreneur friendly will they be? Will they be a strategic investor (translation: driven by internal priorities) verses financial profit motive?

http://www.siliconangle.com/ver2/?p=3668

This is probably the best news of the year for startups. I see Google as a great partner for entrepreneurs who will not go for small seed money like what YC, TechStars and other incubator give. A lot of founders I know are people with career not out of college folks. Kudos Google!!

Why does this guy get negative points? It's legitimate...

aaaand...? The site is cold and impersonal and gives no real details about their strategy or vision. I mean, c'mon...one paragraph + a few one sentence FAQs? It's almost like, yesterday, someone at Google said, "Hey, we should do that too.", and threw up a website for it. At this point, I'd much rather get funded by YC and have a good feel for what I'm really getting out of the deal, rather than just some $ thrown at me.

Also, and this might not be a negative, but Google is only throwing two guys at this venture? I'm just not convinced their heart is in this one yet. It doesn't seem well thought out for a "launch".

April Fool's joke?

Kudos! The more the merrier, entrepreneurs should be happy there is another source of capital for their startups.

Welcome Google Ventures!

Could this be an early April fools?

Yes, it would be AWESOME PR for google to laugh in the face of everyone who submits a 3 page pitch tomorrow! HAHAHA suckers. Maybe they should publicly bash every entry that comes in.

Come on.

Agreed. Good grief.

Google always launches their April Fools' joke on April, it's always themed to look like a preexisting Google theme, and it's always obviously a joke. This one uses custom font sizes, a custom logo/theme, and it's not funny.

The joke tomorrow will be that this announcement was a joke and all the submissions were a total waste.

No. That's not how April Fools works. That's not how Google does April Fools. Google's jokes are funny for people who don't spend their lives in front of computers. That's because they're, y'know, actually funny and not inside jokes.

Example of not thinking clearly at 5AM with no sleep...

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