1) Google raised
$25 million from Sequoia Capital and Kleiner Perkins Caufield & Byers. Would
you have invested in Google’s Series A round if they had presented to you?
Joe Rubin, Director, FundingPost:
"We received mixed answers – the Angel Investors basically said ‘yes’
as they liked the technology."
Atul Madahar, Principal, TL Ventures:
"No, because it would have been too difficult for us to really understand the
superiority of their engine without working code. Also Yahoo was the dominant search
engine at the time followed by half a dozen other engines, meta-engines, etc."
Darren Wallis, Venture Partner, Cross Atlantic Capital Partners:
"I would have passed on it because I would have thought the business model would not
be sustainable, given the highly-fragmented space at that time. It just shows you that
sometimes you have to look past the business model and focus on the superior technology.
Then, the technology drove the business model."
Eric Janszen, Managing Director, Osborn Capital
(Early-stage angel fund):
"We have certainly invested in bright students with good ideas out of universities,
but not recently. Would we have invested in these particular bright students at that time?
I was fortunate enough to meet Google's founders last year at Stanford and was impressed
by the simplicity and clarity of their vision, which had not changed from day one, and no
doubt that would have appealed to us then. Most company ideas you see today are features
of Cisco or Microsoft products, or business applications."
2) Does the Google IPO
have any impact on venture investing for the next 12 months? Will it increase valuations?
Does this mean there is new "hope" for exits for venture-backed companies?
Joe Rubin, Director, FundingPost:
"The majority of the VCs told us that it is ‘business as usual’ and there
will not be much of an impact. At FundingPost, we believe that the impact will be felt at
the CEO level – where a founder of a startup sees the potential for a home run in
their exit."
Jack Carsten, Managing Director, Horizon Ventures:
"The firms that invested in this company are going to be ‘rescued’ from
poor returns, as it is one of the only successes in the sector. That might influence LPs
to reinvest in Internet centric funds...but I doubt it. Public and private valuations tend
to move together sector by sector, even though this often does not make logical sense. So
if the Google IPO valuation holds up over time, it can become a benchmark for exit
valuations. On the other hand, if it tanks, it will only reflect badly on the sector - the
greedy VCs cheated the public again...."
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