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Topic : The Future of Venture Capital
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Will Google Ventures be successfull?

Created by : Veena Gupta, Analyst, Blackstone Group  | 07 29 2009 13:26:42 +0000
Functional Area : VC funding(Entrepreneurship)
Keywords : google entrepreneurs vc's start ups funding google apps google wave google ventures ventuere capital
Activity:  249 views;  last activity : 07 06 2010 20:18:09 +0000

Recently Google announced the Launch of Google Ventures which is into funding all kinds of start ups. And by the looks of it Google ventures has a very broad investment philosophy. And Google was also quoted saying that they are studying a broad range of industries which includes consumer Internet, software, hardware, clean-tech, biotech and also health care where they can make their investing. So what do you think Will Google Ventures get a taste of success? do give your views in this regard.

  
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Top Argument
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Kindly see the full picture.

Google Chrome OS will require a huge distribution & partner echo-system.It's various other initiatives [ like green initiatives (power-meter etc.) ] to counter the giants cannot be handled in-house.

Google Ventures, in my opinion, is a wise move to influence budding entrepreneurs in creating this eco-system in the shortest possible time to counter giants like Microsoft.

sample this :(here's what GV says)

"We're studying a broad range of industries, including consumer Internet, software, hardware, clean-tech, bio-tech and health care"

"You don't have to be a potential Google acquisition for us to want to work with you; we're out to build great companies"

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In my opinion it translates to:

a) Hey! we'll teach you how to develop clean-tech,bio-tech & health care solutions on top of Chrome.then we'll acquire you

b)Hey! Chrome is the next reality, so if you are a software,hardware,internet vendor, we have some very special margins to dole out.Jump in!!

 

Having said that, i believe that it is a win-win proposition for start-ups as well as  GV.Let the battle begin!
By Dhananjay Raturi, Head of the Department, XYZ  07 29 2009 13:59:21 +0000
 
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The history of corporate venture funds is a grim one. Companies invest in startups for all sorts of “strategic” reasons, not all of which end up making them any money. That is the problem with corporate VC funds; their main goal is not always to maximize returns. If a startup is truly strategic for Google, it should just acquire it outright. In effect, this has been its venture strategy so far (outside of its philanthropic arm, Google.org).

Starting a venture fund is not really the best use of Google’s capital. It is in effect saying that it has so much cash it doesn’t know what to do with it. Google would be better off paying a dividend to shareholders or buying back stock than playing venture capitalist, no matter how smart its venture capitalists might be.
By Viktor Stephen, COO, I Entrepreneur  07 30 2009 05:08:23 +0000
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you seem to have made a good diagnoses of America's current economic dilema. Google's venture may prove to be a good solution.And google may find itself in the banking world soon.
You also have the resorces,other than financial,to help new industries such as you mention:solar energy,bio-tech,etc.
good luck
By ravindra shrivastava, Information Systems(MIS)-Manager, iifs pvt ltd  | 03 30 2010 04:46:09 +0000
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I think venture funding should be aimed at generating an exuberent return rather than acquiring. Global behemoths like Microsoft, apple, intel etc received venture capital funding in their early stages, even google received venture funding.
By Padmanabhan R, Articled / Audit assistant, Finance student  | 07 29 2009 17:47:52 +0000
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Here i would like to be on both the sides but then What Jyoti has suggested is right it would do more good if Google is sponsoring the start ups in their quest for their dreams, in a way they are giving people hope where it was difficult to get fundings for the start ups, but then Google ventures if i am correct is most probably looking at sposoring US ventures for that matter, and what Veena has suggested is also right like, Google makes investment where it can actually acquire them later in the future, But to realise the potential of a idea a start up one needs backing and google is doing that, so i guess it will be successfull.
By Sudeep Tarafdar, Senior Consultant, IBM  | 07 29 2009 13:54:39 +0000
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Veena i don't agree with you here, we are talking about Google here and not some or the other company, i think it is good that they are funding start  ups, there are many start ups which will go for some time and then without adequate funding the start up just vanishes...so in a way google is doing a noble thing by funding new start ups in different areas, this also shows they want to give back something for the people who have dreams to create something like google...so i think they will be very successful to me.
By Jyoti Rath, Sr. Associate, Barclays  | 07 29 2009 13:37:34 +0000
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I think Google won't be successfull in this regard as investment is totally different ball game and Google till date has made only investment where they are able to acquire them in the future, this is the way they have evolved till date and would expand their territories in the same manner by investing in different avenues. So if this sort of approach they are having then it would be difficult for them to invest, as many would not want their start ups to be acquired by the Giant later, this is the case where only Google will be growing and not the start ups..so start ups would have apprehensions about funding done by Google ventures...
By Veena Gupta, Analyst, Blackstone Group  | 07 29 2009 13:26:42 +0000
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