Yahoo, Google Are Competing With VCs As Start-Up Funders

Google and Yahoo aren’t just acquiring or, in many cases, acq-hiring small companies; they’re also funding start-ups in competition with VCs. (Amazon has been doing this for a while; it’s the sole investor in The Robot Co-op, parent of 43 Things.) John Battelle reports from London, where he was on a Web 2.0-VC panel with Simon Levene of Yahoo and spent some time talking with the Yahoo exec: “… Yahoo feels it can and must compete to buy early stage companies before VCs can get in with larger financing. An interesting development. He added that entrepreneurs are weighing the risks of having to execute against the exit requirements of a second or third round of financing, vs. the bird in the hand of a deal with a big player like Yahoo, and often, as with Flickr, they are going with the platform.”
Update: Battelle now reports that his contacts at Google say there is no Google VC fund. Maybe they just buy companies.

Related: 43 Steps From Jeff Bezos

Comments have been disabled for this post