More On Paid “Scouts” Who Secretly Invest For Big VCs

As noted here previously, relationships in Silicon Valley keep the money flowing.

The Wall Street Journal revisits the use by the big venture capital firms of their “scouts” who look for promising startups, make a small investment to keep their eyes on the company as it takes shape, then brings in the big players for the next round.

The story focuses on Sequoia, the VC that has made its bones with early investments in Apple, Google and Cisco.

The dirty little (although not-so-) secret is that the VC’s are providing the scouts money in order to get the VC’s foot in the door.

So, are the scouts friends or spies?

http://www.wsj.com/articles/secretive-sprawling-network-of-scouts-spreads-money-through-silicon-valley-1447381377

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
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