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Google To Open VC Unit

The Wall Street Journal reports that Google is planning to start its own venture capital unit. The venture will be lead by David Drummond, Google's SVP of corporate development and chief legal officer, and William Maris, a 33-year-old former entrepreneur. But details, such as how the group will be structured and what sorts of investments it will pursue, remain murky. In fact, the plans could still fall through.

Google would join such tech and media giants as Intel Corp., Motorola, Comcast, Amazon and Walt Disney in setting up its own formal venture capital arm. Their respective investment records have been spotty at best, in part because corporate venture capital units face different challenges from traditional VCs, which invest in private startups at an early phase in hopes of a big payout when the company is sold or goes public.

Startups, meanwhile, are sometimes wary of taking corporate money because the agreements often come with requirements like a buyout clause if the company becomes successful. These funds also don't usually allow senior employees to invest their own money, whereas VC firms typically do. According to PricewaterhouseCoopers, corporate funds' share of the overall VC market fell to 7% in the first half of 2008 from 8.4% in 2007.

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