"How IAC will be received on the West Coast remains to be seen, but Safka is already doing what he can, including establishing "strategic relationships" with "five to 10" valley venture firms that he declined to name. "We’ll get plugged into their deal flow and we’ll get them plugged into IAC to share with them what our needs are.""
IAC is launching a venture group… doing the coy thing to suggest that deal flow will not be a problem. It shouldn’t, they’re frickin IAC! But they pull out the time tested "strategic relationships with a couple of top tier venture firms" so "we can cherry pick their deal flow and we’ll leverage IAC for their portfolio companies" messaging. That’s the reading between the lines translation.
It’s a great thesis even if it’s not entirely original, too bad it never works out like everyone involved expects it to.
- IAC is a multi-headed monster and each of those business units has their own agenda and it doesn’t involve being a john for some pimped out VC portfolio company
- IAC isn’t exactly known for it’s entrepreneurial friendly culture
- IAC is putting themselves into competition with venture funds by suggesting they want to incubate companies… which would suggest they are doing a range of early stage deals. These deals don’t typically syndicate.
- It would appear that qualified investments will have to compliment IAC’s existing business, meaning strategic, and Diller will approve every deal. The deal approval conditions are not unreasonable at all, it’s a publicly traded company after all, but I’d be really curious to see how deep into the details Diller/Kaufman go as part of the process.
Best of luck to them.