Google's Not Investing in Young Startups Anymore (qz.com) 26
GV, the division of Alphabet, is no longer investing in startups that are at their nascent stage. According to data from research firm CB Insights, GV completed no seed-stage deals in the first half of this year, down from 10 such deals last year. That represented a 77% drop from the number of deals it did in 2014. Quartz reports (edited and condensed): GV's former chief executive and co-founder, Bill Maris, who stepped down earlier this month, told the Wall Street Journal in December that he was cutting fewer checks at the seed stage because he thought that market was overheated. He also said that he was mystified by the reluctance of some portfolio companies to avoid a stock market flotation. "They would benefit from the rigor and discipline that the public market requires," he said.
Re: (Score:2)
Things you haven't even thought of, but the start-up in question has.
shortsightedness and quarterly investors (Score:3)
Maybe an idea which needs a year to properly develop an idea is justifiably afraid of quarterly meddling at the beginning.
That's discipline to avoid that short term trap
Re: (Score:2)
Besides, rigor and discipline is something that a good VC can bring... perhaps in the form of a "nestor", a highly experienced consultant who knows what it takes to grow and run a company, what to do and what to avoid, often a (semi) retired CEO or entrepreneur. Not sure how common it is in the US for a VC to provide (or even im
Re: (Score:2)
You only get to impose a VC if you give enough money to convince the founders to give up a controlling stake. If the guy doesn't like the direction then I think basically, he didn't invest enough money to force it but is whining that they're not doing precisely what he wanted. I believe it's time to play a really really tiny violin, because honestly I don't have a lot of sympathy for someone in charge of an immense amount of money complaining when a small investment doesn't buy everything he wants.
But yes y
Re: (Score:2)
mystified by the reluctance of some portfolio companies to avoid a stock market flotation. "They would benefit from the rigor and discipline that the public market requires," he said.
Maybe an idea which needs a year to properly develop an idea is justifiably afraid of quarterly meddling at the beginning.
That's discipline to avoid that short term trap
I assume he's not talking about small companies, but GV portfolio companies like...
Uber, Slack, Cloudera, Blue Bottle Coffee, etc...
Which seem to be happy to continue to take new rounds of VC money leaving GV and early investors with no exit. W/o an IPO it is more challenging for GV to get their money back to invest in other companies which means their returns might look good on paper, but these companies are essentially holding GV's investment hostage and using the new VC money to invest in new projects
Re: (Score:1)
That's why they're named "Alphabet" and not "Numerals"
Re:Math (Score:4, Informative)
45 deals in 2014, 10 in 2015
45-10=35
35/45=0.7777
Maybe it's actually reading comprehension that's hard? It's a story problem...
Re: (Score:2)
10 deals in first half of 2015, 0 deals in first half of 2016. (10-0)/10 = 1. 100% drop!
Re: (Score:2)
Which, given a little thought, tells you that they've completed no deals in 2016; 10
How about not (Score:1)
"They would benefit from the rigor and discipline that the public market requires,"
If I'm trying to get a business off the ground, the last thing I want to be worried about is people probing around every square inch of my operation doing due diligence, SEC regulations, having to impress shareholders, having one piece of bad news or a missed earnings call tank my entire business overnight, etc. The scrutiny that comes with being a public company is absolutely not worth it in many cases.
Grammar (Score:1)
GV, the division of Alphabet, is no longer investing in startups that are at their nascent stage.
It seems like it should be:
GV, a division of Alphabet, is no longer investing in startups that are at their nascent stage.
That's kind of funny (Score:2)
Given we've read a number of recent stories where Google/Alphabet has been cutting ties with acquisitions that can't turn a short term profit (e.g. Boston Dynamics), I'm rather puzzled as to how a Google employee would be "mystified by the reluctance of some portfolio companies to avoid a stock market flotation". You'd think he'd be intimately familiar with the reasoning.
Struggling to figure this out... (Score:2)
"Reluctance to avoid" to me means that they want to do a stock market floatation, then he says...
"They would benefit from the rigor and discipline that the public market requires,"
Which implies the first sentence should have been: "He also said that he was mystified by the reluctance of some portfolio companies to WANT TO DO a stock market flotation."
Is it just me confused?
Artificial value (Score:2)
he was mystified by the reluctance of some portfolio companies to avoid a stock market flotation
Maybe some people have wised up to the fact that market valuations are completely artificial -- they are numbers picked out of the air, and being listed on the stock market places you at the mercy of mass psychology, media spin, gross subjectivity, market volatility, and trading algorithms that solely exist to milk profits from the market.
FBI FRONT PAGE NEWS (Score:1)
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