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My point was: if you buy Google stock, you're paying Google multiples on top of venture investments' multiples. That's exponentially costlier. When I say you'r
by franciscomello 11y ago
My point was: if you buy Google stock, you're paying Google multiples on top of venture investments' multiples. That's exponentially costlier.
When I say you're investing at book value, I mean, of course, book value at fund share level, so no second layer of multiples.
The venture investments made by Google have the same liquidity constraints, and you could argue Google's SG&A are much more expensive than 2% management fee (not sure about the performance fees, though).
- 7Figures2Commas 11y agoI would suggest you're overcomplicating this by directly comparing Alphabet to a venture fund, which it is not. > My point was: if you buy Google stock, you're paying Google multiples on top of venture investments' multiples. That's exponentially costlier. Google's venture investments are negligible compared to Google's overall enterprise value. I doubt they are a real factor in the stock price and in fact, it's possible that you're getting exposure to the venture arm for free. > The venture investments made by Google have the same liquidity constraints... You're missing the point. When you invest in Google, you can exit your position at any time. > ...and you could argue Google's SG&A are much more expensive than 2% management fee (not sure about the performance fees, though). Google's overhead is associated with a business that generated more than $65 billion in revenue last year. The management fees paid to your friendly neighborhood VC are not.
- franciscomello 11y agoI really do get your point. But you are maybe failing to get mine: you get one great business, and a bunch of VC-like bets. And they just made it painfully more clear that that's the case.