The Double Bypass: Writely goes to Google without passing through the money pitstop

A common theme in interviews I have given since the Truveo acquisition by AOL is how angels (and seed funds) are funding startups, helping them develop and reap the profits of an early sale to GEMAYANI as opposed to doing a Series A funding bla-bla-bla–but don’t build to flip-bla-bla-bla–Russian roulette with a fully loaded gun-bla-bla-bla (bla-bla statement still holds true).

When I put together the Investment panel of Les Blogs 2.0, I prepared a series of slides clarifying the money/financing ecosystem and explaining the “Money Flow” – economics and expectations of entrepreneurs, investors and buyers. I put this slide up to mention a trend where a few companies would actually sell directly without raising any money, therefore bypassing Angels and VCs (hence the “Double Bypass”), and receiving much more than a glorified sign-on bonus – i.e several million dollars per founder.

From what I hear, this is what just happened with UpStartle, maker of Writely, which stopped its fund raising discussions some time ago to engage in M&A discussions – which were confirmed today with the official announcement of their acquisition by Google – at a price which has not been communicated but the rumor is that it is pretty substantial for a beta-stage company.

Congratulations to Writely’s founding triumvira…

And just for fun, we’ll call this “Double Bypass Episode 1”. We’ll see how long we need to wait for the sequel.

More:

• Om scooped the rumor
• Peter Rip calls this acquisition a top for the market, and makes some pertinent remarks
• The message from the founders: Writely So
• I like BW TechBeat snarky comment: If Selling Out to Google Isn't a Good Business Model...

PS: Writely is an online collaborative word processing tool, in case you wondered.

PPS: Because of my office move, I missed to write about “Social Media Consolidation Act 9”: Microsoft has acquired OnFolio.

Tags: writely

Comments

[Rodrigo Sepúlveda Schulz]

Hey, that's that picture of you and me again :)

[hugh macleod]

i was sitting in the front row at that talk =)