Re:The Sudden, Mysterious Exit Of A Quora Cofounder Has Sili...
by rdl on Tuesday October 02, 2012 @08:14PM
(#4605115)
Ugh, "industry/strategic investors" tend to suck a LOT, at least for early stage. Google doesn't suck, Google Ventures sucks. Intel doesn't suck (in most ways), Intel Capital is ok but would have to be amazing to be as good as Intel is at chipmaking, etc.
Cisco, which has one of the best acquisition strategies of all times, isn't a VC -- you go outside to get VC, even if your staff and product is all stuff people from within Cisco mostly thought up (which some investors have complained about)... if it goes well, Cisco is a natural acquirer.
The problem with taking a strategic in your first round is that there's an implied option preventing any other strategics from investing later or buying you out or in some cases even using your product (especially if adopting your product has a large investment/risk).
I feel like Yahoo would be much better served by building a world-class internal VC arm than by aggressively chasing acquihires. Most acquihires aren't going to stick around after their terms vest, and even while they're around, their hearts and minds won't be dedicated to Yahoo. They're a stopgap solution at best. They can be used to good effect (i.e., to bring innovative projects into the company and to attract young talent to those projects). But they aren't the solution at the scale Yahoo needs.
What Yahoo needs is to win the war (or at least be competitive in the war) for the top talent graduating from university every year. Offering a really innovative, supportive, deep-pocketed, world-class incubator is one way to do this. Possibly a better long term solution than paying superstars for the privilege of their company for a few years at a time.