VC Competition

John Battelle’s blog is reporting that Yahoo and Google are effectively setting themselves up as VC firms, sorta.

The logic is simple: if they see a promising company that’s in their space, they have the expertise to do a good due-diligence, and they also have the cash to snap them up before VCs get to them and raise their valuation.

In short: Google/Yahoo are getting startups for cheap by getting in earlier than VCs do.

Now, we don’t know how long this will last, but you could do a lot worse than identify some technology that Yahoo/Google will want and then building it “real” enough so that you get bought out.

1 reply
  1. Brian says:

    This is interesting, and at the same time makes a lot of sense. I know of at least five companies that Google has purchased in the last six months and a few that Yahoo has also bought. Ebay seems to be thinking along the same lines. However, they aren’t just buying small “hot” startups, their acquisition of Skype for around $2.5B a little over a month ago shows that they are also willing to get involved at a later stage.

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