Photo: Owen Thomas, Business Insider
Entrepreneur turned venture capitalist Kevin Rose addressed the controversy that erupted last week over how his new employer, Google Ventures, invested in early-stage startups.Paul Graham, a partner of Y Combinator, a prominent incubation program for startups, told the founders he advises to watch out for “lowball offers” from the Google-backed venture-capital firm.
Rose, who’s best-known for founding social-news site Digg, said in an on-stage interview with TechCrunch writer Colleen Taylor at the Disrupt conference that he was actually working on completing three deals to invest in Y Combinator companies.
He did say there was something wrong with the expectation that most startups going through Y Combinator were worth between $8 million and $12 million.
“Some are worth $15 million or $20 million,” Rose said. “Some are worth $6 million. Or $4 million.”
But the real issue, he acknowledged, was Google’s due-diligence process for investments, which he experienced firsthand when Google Ventures invested in his startup, Milk.
For seed-stage investments, it was slower than he would have liked. And when he joined Google Ventures, he set about speeding it up.
“We’re getting there,” Rose said.
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