VCs have found another reason to gripe about Google Inc. Not only is the search giant diverting talent from VC-backed startups, but it's starting to compete with private investors for deals. BusinessWeek reports that Google has begun making small investments, of $500,000 or less, in promising young companies and then, in some cases, turning around and acquiring them on the cheap. The company has been hiring a bunch of finance pros too.

Of course, equally troubling to VCs is the fact that many startups are bootstrapping themselves and thus eliminating the need for outside investment altogether.

It's not like VCs are running low on companies to invest in. The latest numbers indicate that venture investments have reached a recent high. And, in some cases, former Googlers have gone to work at VC firms.

But corporate VC arms are undoubtedly getting savvier and more aggressive, and when a giant like Google steps into the ring, it's not too surprising to hear some concerns. —Olaf de Senerpont Domis

See May 11 Tech Confidential blog
See Aug. 4 story from BusinessWeek
See April 2006 story from TheDeal.com
See Aug. 6 story from TheDeal.com
See June 21 VC Ratings blog

Tags: vc, venture+capital