The announcement earlier this week by Intel's CEO that, with 24 VC firms, Intel would put $3.5 billion into US start-ups received a wry response from the Wall Street Journal.
'It's not new money', points out the WSJ, 'the 24 venture firms that have signed on have not raised new capital, and they're not pooling their capital into a new fund. While $3.5 billion is a nice big, round number, it simply represents the total amount that this small but prominent slice of the venture industry already planned to invest in
The WSJ adds: 'Intel itself says it's committed to investing $200 million in
When a marketing man speaks, it's wise to check not only the forkedness or otherwise of his tongue, but his underlying motives.
For the VC companies' motives, the WSJ points to their wish to avoid regulation which is very much on the agenda of all worldwide financial regulators at the moment.
For Intel's motives, yesterday's New York Times pointed to the US FTC's anti-trust complaint against Intel, and second to the admission by Rajiv Goel, a former managing director at Intel who worked closely with Intel Capital, that he leaked confidential corporate information to the Galleon hedge fund which is being prosecuted for insider-trading.
In the WSJ's Daily Start-Up column, Intel's $3.5 billion initiative drew a withering comment: 'It appears to be more of a PR stunt than an actual fund.'
Hi David - just wanted to make you aware that the second URL you "invoked" in your Feb 26th blog (entitled "Intel's $3.5 Billion - A Fund, Or A PR Stunt?") does not "trace back" to the NY Times article that I believe you intended to highlight. In fact the URL tracks back to the same WSJ article associated with the first URL you provided.
The right URL, I believe, is
http://www.nytimes.com/2009/12/17/technology/companies/17chip.html.
Mike C.
Thanks very much for kindly pointing that out Mike, I have now put the correct link in.
I'd love to find a European electronics company putting $200m of its own money into start-ups. We all might like to moan at Intel now and then (and then and then .... :-) but the availability of venture capital is what makes the US industry tick and Europe not.
Well of course you're absolutely right, Mike, but it all depends how it's done. If you get up like a man and say in a staighforward way this is what we're doing - that's fine. If you get up in a snake oil salesman type of way and try and give the impression you're doing much more than you are doing - then people get pissed off.
Yes I agree Intel could do themselves a favour and lose the b***s**t & hype. Quite why successful companies need to behave so has always confused me.
But it is surely less dishonest that EC protestations about increasing research funding when all they did was reduce the EC percentage contribution in ENIAC so that governments had to put in double the EC funds rather than match them.
Also despite clear rules on supporting SMEs, EC funds with one or two notable exceptions rarely go near a startup whereas the Intel money will go exclusively to them.
Mike, you are absolutely right - the politicians and bureaucrats are the worst for obfuscation and downright misleading statements. They've spawned a creeping sickness where its hard to find anyone who tells you the plain unvarnished truth. The great thing about the old semiconductor CEOs was that they were scientists and found spin an alien concept. No longer!