Several sources have recently reported that Google is currently working on plans to launch their own Venture Capital fund. I will start with some of the facts (at least as reported by more reliable sources than myself) and then I will share an opinion or two.The new fund would supposedly be led by Google's current SVP of corporate development, David Drummond, however Google has recently hired former entrepreneur Bill Maris to help get the fund going. Details are few and far between at the moment: no information on deal types, typical deal sizes, or even annual fund alotment.
Will it happen?
There have been plenty of rumors about a Google VC fund for years, but nothing has ever materialized up to this point. Until now, Google seems content just waiting to see which start-ups will gain traction and then buying them (and we all know they have the money to do it). However, getting involved in venture capital investing would not be unusual for a large tech company (Intel, Motorola, Comcast, Walt Disney, and Microsoft have all done it) - although acting like a large tech company is not Google's usual cup-o-tea. Given the recent hire of Maris, this does seem much more likely to finally happen. This would also help accomplish Google's goals to invest in clean energy (google.org). Now the question is...
Will it succeed?
Google will likely be hampered by many of the same issues that bother other corporate VC's. Any funded deal would likely contain purchase rights for Google, which may deter some start-ups and even other investors. Corporate VC's also tend to pay less to their management and don't always allow co-investment by managers - making it harder to keep good people.
However, Google has alot to offer potential start-ups. They have significant technical resources and creative/personnel resources that could make all the difference in success for a new start-up. Not to mention the access to information and the natural "gravitas" that comes along with being involved with Google in any way.
My humble opinion - the fund will probably happen, and see some success. But I definately don't think funding from Google will prove to be any golden ticket, afterall, not all their investments have proved that successful - they still can't make any money with Youtube...and didn't they buy some company called Grand Central a while back (what ever happened to that?!).
Here are some more places to read about this story:
Wall Street Journal
TechCrunch
**Images used here are not actual Google images**
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