Allen & Company invested in a mobile product-search company called GPShopper LLC.
Any other investor could have made the investment and it might not have been news, but when it’s an investment made by Allen & Company, people notice. I did.
That’s normal, because Allen & Company is the gold standard for private boutique M&A investment banks.
In fact, I had the honor of having a meeting at their office once and I must say, much like going in for a meeting at Yahoo!, Google, Goldman Sachs, GE, P&G, etc., such meetings are the business equivalent of being an athlete and playing at a legendary arena or an entertainer performing at a renowned stadium.
Point is, the gig - or in GPShopper LLC’s case, the investment - is secondary to the rite of passage.
Of course, Allen & Company is notoriously hands off when they make investments. My gut says that one of the bank’s key employees knows someone at GPShopper LLC pretty well, or they’ve worked in the past with a founder and made a tidy sum on the relationship.
But what caught my attention was the following:
While the influential bank declined to discuss the terms of the deal, Executive Vice President Paul Gould said Allen & Co. does not intend to take an active role in GPShopper’s operations and has not stipulated how the funds should be used.
“We have a lot of faith in them being able to implement the business,” Gould said.
Indeed, that is commonplace for Allen & Company, where an investment yields a lot of cachet and potentially, some connections. But clearly, you are not getting a hands-on operator type of partner. That’s not bad, and in many cases, it’s welcome.
But it did make me think, what would the opposite of an Allen & Company investment be?
Not a VC. Not an angel either. I guess the pure opposite would be landing an investment from an entrepreneur who’s cashed out and looking to invest and join a startup.
If that is the case, then this begs the question:
If you are an entrepreneur, would you rather:
- take an investment from Allen & Company
or
- take money from the successful entrepreneur looking to invest and join your team?
Clearly, there are pros and cons to both options. And, of course, they’re not mutually exclusive.
That’s a pretty good question all entrepreneurs should be asking themselves.
Why am I asking the question? No reason.
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