In one of my earlier writings on corporate venture investment I had discussed economic fundamentals of venturing and why it may and may not work.
Today, I see a very elaborate analysis of Google's venture investment activity in business week. The article lists strategic reasons why corporates may want to invest in early stage startups. Some of the notable reasons given are
1. To get first right to acquire the startup in case it succeeds and a potential bidding war can risk invaluable IP going to competitor's hand
2. To deploy oodles of cash lying undeployed & get better returns on idle cash.
While I accept the first as a valid strategic reason, I reject the second as an inferior way to deploy idle cash as this can potentially harm investors interest.
In short, Google's core competence is technology innovation and not financial investment and that's what investors would like Google to do first (For theoretically inclined, there is vibrant literature available on why it is better to return cash to investors by buying back shares or paying dividends rather than venturing beyond core competence.)
Well, again, as an entrepreneur, one can only be happy to find competition for the right to acquire a share in future.
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Entrepreneurship is different everywhere. It depends on political clime, circumstances, vibrant atmosphere, policy. The entrepreneur has to feel independent and free. The Indian perspective of entrepreneurship is visible in her new grassroots. Read more at http://publicrelationsindia.blogspot.com/2007/09/india-and-its-new-grassroots.html
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