I would suggest you're overcomplicating this by directly comparing Alphabet to a venture fund, which it is not.
My point was: if you buy Google stock, you're paying Google multiples on top of venture investments' multiples. That's exponentially costlier.
Google's venture investments are negligible compared to Google's overall enterprise value. I doubt they are a real factor in the stock price and in fact, it's possible that you're getting exposure to the venture arm for free.
The venture investments made by Google have the same liquidity constraints...
You're missing the point. When you invest in Google, you can exit your position at any time.
...and you could argue Google's SG&A are much more expensive than 2% management fee (not sure about the performance fees, though).
Google's overhead is associated with a business that generated more than $65 billion in revenue last year. The management fees paid to your friendly neighborhood VC are not.
I really do get your point.
But you are maybe failing to get mine: you get one great business, and a bunch of VC-like bets. And they just made it painfully more clear that that's the case.
Comments
I would suggest you're overcomplicating this by directly comparing Alphabet to a venture fund, which it is not.
Google's venture investments are negligible compared to Google's overall enterprise value. I doubt they are a real factor in the stock price and in fact, it's possible that you're getting exposure to the venture arm for free.
You're missing the point. When you invest in Google, you can exit your position at any time.
Google's overhead is associated with a business that generated more than $65 billion in revenue last year. The management fees paid to your friendly neighborhood VC are not.
I really do get your point. But you are maybe failing to get mine: you get one great business, and a bunch of VC-like bets. And they just made it painfully more clear that that's the case.