Did Google Just Snatch Back Its Funding From Bryan Goldberg's Bustle?
All does not necessarily end well just because your startup scored $6.5 million and a profile in The New Yorker. TechCrunch reports that Google Ventures pulled its $100,000 investment in Bustle "divesting after deeming the startup out of touch with its values."
A representative for Google Ventures told Valleywag: "We have no comment." Goldberg, who is currently aboard a flight to Austin for SXSW also declined to comment.
According to TechCrunch, Google didn't distance itself because of Goldberg's tone deaf attempt to tell women how they should blogged at. Rather, Alexia Tsotsis says Google pulled their funding because of a mismatch of morals:
From what we know, the decision was not made because of the backlash specifically, but because Google Ventures and Bryan Goldberg were not on the same ethical page. I've heard that reports of Goldberg's misogynist comments and his glossing over of San Francisco's socio-economic issues in a PandoDaily guest post were the straws that broke Bustle's Google backing.
In other news, the startup world died today after being engulfed in a sudden wave of simultaneous schadenfreude.
Update: "Sources" tell Pando that Google didn't divest. Rather, Goldberg personally bought out their $100,000 because Goldberg offended Google Ventures' Kevin Rose by asking Time Warner to invest in Bustle without checking with Rose first.
When it came time to raise a Series A, other investors in the syndicate advised Goldberg that he'd be wise to get a "media investor," so he began talks with Time Warner. The terms were highly advantageous given Bustle's age and size and, of course, Goldberg knew Time Warner, having sold Bleacher Report to them a year or so earlier.
When Goldberg reached out to Google Ventures' Kevin Rose to tell him about the potential deal, Rose was offended that Goldberg hadn't come to Google for a right of first refusal. Indeed, it was rookie investor management error on Goldberg's part [...]
With Bustle and Google Ventures' relationship strained, other investors suggested Goldberg just buy out Google Ventures' stake. Goldberg readily agreed and bought out the investment with his own cash. Moreover, our understanding is that, legally, Google Venture could not pull out their investment unilaterally.
This sounds about as plausible as Google Ventures making a fuss over Goldberg's public buffoonery rather than just losing its scant $100,000 investment. There is no Occam's Razor here. Even a clash of egos doesn't explain this much Strum und Drang over $100k.
There's more where that came from. Pando also called out TechCrunch on lack of disclosures, while avoiding the question of whether Goldberg, a regular contributor to Pando, was one of Pando's sources:
(Although TechCrunch did not name its source, Google Ventures GP MG Siegler is a former TechCrunch employee, and a current contributor to the site. Siegler's dual role was not disclosed in the TechCrunch post and a request for comment from TechCrunch co-editor Alexia Tsotsis [~1hr ago] was declined, citing source confidentiality. Pando has confirmed that the Google Ventures partner most involved in the Bustle deal was former Digg founder, Kevin Rose.)
To contact the author of this post, please email nitasha@gawker.com.