Google Ventures is no longer an investor in Bustle, a women’s site founded by Bleacher Reporter co-founder, Bryan Goldberg.
TechCrunch’s Alexia Tsotsis says Google Ventures took back its $US100,000 after Bustle’s founder became a controversial figure. He made a mess of the company’s launch and insinuated that no good female-targeted websites existed. This upset a lot of women in tech.
But Pando’s Sarah Lacy says Google Ventures didn’t take back it’s $US100,000. Instead, she says Goldberg paid $US100,000 from his own pocket and bought out Google Ventures’ initial stake.
What really happened to Google’s $US100,000 and why aren’t the two companies partners any more?
Goldberg declined to comment on the record and we haven’t heard back from Google Ventures. But the nice thing about being at South by Southwest, a 40,000-person tech conference in Austin, is sources are plentiful.
Here’s what seems to have happened according to earlier reports by TechCrunch, Pando, and what we’ve heard at South by Southwest.
Kevin Rose, a partner at Google Ventures, led Bustle’s seed round one year ago. Google Ventures often leads seed deals with the intention of getting a first look at a startup’s Series A. But Rose wasn’t offered a first look at Bustle’s Series A round when Goldberg raised it a few months later. Instead, Time Warner Investment’s Allison Goldberg had the first crack at it and joined Bustle’s board. Afterall, she’s a woman and Bustle is a site for women.
This miscommunication caused tension between Bustle and Google Ventures. Ultimately, Google Ventures opted not to invest in Bustle’s Series A and the two companies mutually agreed to part ways. Google Ventures asked if anyone would be interested in buying out its stake in Bustle. Goldberg decided to pay $US100,000 out of pocket for it.
It’s all really strange. And stranger is the fact that this story leaked to TechCrunch, where Google Ventures partner MG Siegler used to work. TechCrunch founder Michael Arrington, who formerly worked with Siegler at his investment vehicle CrunchFund, left a comment on the Bustle article:
“I get why Google would want to uninvest in this person, but what’s inexcusable is that they made sure everyone knew about it afterwards by leaking it here. He’ll probably never be able to raise money again with this hanging over him. Google could have acted far more professionally by doing this without the press.”
It’s important to note that the tension between Bustle and Google Ventures seems to have been caused before Bustle’s messy launch in August 2013. TechCrunch initially reported that the Google-Goldberg fallout may have been caused by the media backlash after Bustle’s launch. But that can’t be true, since the Series A was raised before Goldberg made any controversial statements.
While Goldberg declined to comment for this story, he did fill us in on Bustle’s current stats. He says his site is generating 3 million monthly uniques, up from 1 million monthly uniques in September.