Google launches venture fund with $100 million.

April 01, 2009

For a minute I considered a spoof, April Fool's day blog post, but the guys on the creative side, at njoynow.com have that covered.  I'll keep it business.  I am very happy to announce that quarter one at NJOY NOW was stable, and we are looking at a wonderfull year, with some large announcements pending.

Business and investors appear to be taking a wait and see approach.  I've spoken to a VC that said he and his fund are sitting out quarter two.  The big tech players aren't doing this.  IT venture capital is available.  Our rep's at the wireless convention in Las Vegas are telling us books are being requested.  Does this turn into venture capital?  Depends on the firm that requests and/or delivers the book.

Google has turned around, and like a martial artist, has transformed from student, to master.  Google, which is universally recognized as the leader of all things Internet, has launched Google Ventures, it's own $100 million dollar venture capital fund.  Bill Maris, and Rich Miner are running the fund, and they have already contributed to Pixazza's first round of funding.

Google would not be Google without the backing of firms like Kleiner Perkins and Sequoia Capital.  These firms have invested billions of dollars in early stage web and tech start ups, like Google, and they have yielded billions in returns for their firms and investors.  The early vision to invest in what is still an infant, the Internet, and the companies that form the Internet was not always as obvious as it is today.  What is shocking is, there are still firms, investors and entrepreneurs that are not holding positions in Internet businesses.

So Google, who is the leader of the World Wide Web, is now putting a little department together to invest in the most obvious, and strong modern investment available, Internet companies and entrepreneurs.  This is not only obvious, but it is elegent and intelligent.  What better way to manage cash for a business like Google, then to reinvest it in young companies that have unlimited potential.  I think the stable old S&P 500 and Dow Jones has shown us that companies that are huge, may not be good modern investments.

Is Google forming this fund to make acquisitions at a discount?  Are they going to mold businesses that are early stage so they become a compliment to Google, rather then competition?  Is Google going to eventually make pass through revenue off of all things Internet? Maybe?

I think they are trying to make great products, and want to help small businesses, that can make moves fast, make great products.  I also think Google is trying to make more money.  Small companies, well run, with adequate cash flow have potential to yield enormous return on investment.  CNBC, and 500 cable channels of doom and gloom may have otherwise bold, savvy investors forgetting the obvious.  The ROI must be considered as much or more then the risk.  Google "get's it."