Google Gets Into VC BusinessRecently 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.
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.
Published Dec. 9, 2011