Investment banks are now in the startup scene

Lots of change is going on in the startup investing landscape. Institutional seed funds/incubators/accelerators, acqui-hires (Gowalla), and now investment banks.

Goldman Sachs recently held a “Private Internet Company Conference” in Las Vegas. Why?

Because the internet landscape is changing and they don’t want to be left out. It takes small amounts of investment to get started, you can raise money quickly, and the path to IPO is getting shorter.

Upcoming and recent IPOs and their founding

Zynga – 7/2007
Yelp – 7/2004
Facebook – 2/2004
Groupon – 11/2008; 2011
Pandora – 1/2000; 2011
Linkedin – 5/2003; 2011

Google 1998; 2004
Amazon 1994; 1997
Yahoo 1994; 1996
Oracle 1977; 1986
Apple 1976; 1980
Microsoft 1974; 1986

What does this mean to startups and investors?

The investment banks want the IPOs and the mega-mergers.  They don’t care about sub-$50 million fund raises or acqui-hires. So I think they’ll do their best to help out the both the investors and the entrepreneurs with introductions for hiring, investment, acquisition all in hopes of building the relationship to be at the front of the line for the big deal.