Another issue - backing the next google may not be as profitable as you think. The founders keep a large portion of the shares, and the IPO will raise a lot but

Another issue - backing the next google may not be as profitable as you think. The founders keep a large portion of the shares, and the IPO will raise a lot but that goes into new servers or acquisitions. Then those pesky employees want stock options. The VC firms who backed google brag about how they got 25% of a company that's now worth $600B. They don't like to mention that they were diluted (by both the IPO and employee stock options). I think they made a 100X return, which is certainly very good, but it's not as great as they make it sound. Andy Bechtolsheim, the angel who gave them $100,000 made out like a bandit though. Something like a 10,000X return, I think.