Amazon is Introducing Private Investors To High-Risk Startups in a New Pilot Program (cnbc.com) 16
Amazon is testing a new way to bolster its relationship with startups and possibly bring in more capital to the ecosystem. From a report: The fledgling effort, known as the Amazon Web Services Pro-Rata Program, is designed to link private investors with companies that use AWS, as well as venture funds whose portfolios are filled with potential cloud customers. Amazon is not investing money through the program.
The Pro-Rata program is being run by Brad Holden, a former partner at TomorrowVentures (founded by ex-Google CEO Eric Schmidt), and Jason Hunt, who are both part of AWS's business development team focused on angel and seed relationships, according to an email they sent to investors in January. "The Pro-Rata Program is a new pilot intended to connect family offices and venture capitalists for specific investment opportunities from the AWS ecosystem," according to the email, which was viewed by CNBC. "Pro rata" refers to the rights investors have to put money in subsequent rounds. Mike Isaac, a reporter at The New York Times, writes, "If Amazon is using its direct knowledge of startups' health based on the fact that Amazon literally owns and operates the servers, how is this at all ethical? If that's not the case, Amazon should make that crystal clear (even though i'd have a hard time believing it). It's like Facebook's years of insights into [various] apps' data with the Onavo team, only instead of ripping companies off (which FB did), they invested in them."
The Pro-Rata program is being run by Brad Holden, a former partner at TomorrowVentures (founded by ex-Google CEO Eric Schmidt), and Jason Hunt, who are both part of AWS's business development team focused on angel and seed relationships, according to an email they sent to investors in January. "The Pro-Rata Program is a new pilot intended to connect family offices and venture capitalists for specific investment opportunities from the AWS ecosystem," according to the email, which was viewed by CNBC. "Pro rata" refers to the rights investors have to put money in subsequent rounds. Mike Isaac, a reporter at The New York Times, writes, "If Amazon is using its direct knowledge of startups' health based on the fact that Amazon literally owns and operates the servers, how is this at all ethical? If that's not the case, Amazon should make that crystal clear (even though i'd have a hard time believing it). It's like Facebook's years of insights into [various] apps' data with the Onavo team, only instead of ripping companies off (which FB did), they invested in them."
Ethical? (Score:3)
It is insider trading. Plain and simple.
Re: (Score:3)
If they were the owners it wouldn't be a factor at all. But they are a third party. Technically? It might currently not be insider trading. But SEC is like the IRS, all it takes is for them to decide it smells bad and they can apply discretion. Following the letter of the rules to do something shady doesn't pass unless they decide to let it pass.
IANAL. But in this case they are systematically trading on insider information to gain an advantage over other potential investors in companies that are in a pre-pu
How do you determine health from server activity? (Score:2)
If Amazon is using its direct knowledge of startups' health based on the fact that Amazon literally owns and operates the servers, how is this at all ethical?
That assumes you CAN determine a startup's health from server activity.
Maybe there's not a lot going on, but they have one huge trial customer and a really low burn rate.
Maybe there is a lot going on server-wise, but the burn rate is high and the large amount of traffic is really killing the company sooner rather than later as they are not moving towa
Re: (Score:2)
they have unfiltered access to all of the commands you send to AWS in cleartext. sending data into ML? they can read it. storing data on S3 unencrypted? they can read it.
Yes... but so what?
First of all, if Amazon were ever to be found to be scanning containers that would be the end of AWS, so honestly I doubt they are dong this even if they technically COULD.
Secondly as I said, even if they do risk the company by scanning text uploaded to containers for every tiny startup, what honestly would they really l
Re: (Score:2)
AWS specifically forbids itself from examining or otherwise gaining access to customers' resources.
Oh, just great (Score:2)
(What? Too soon?)
How can I get in on this? (Score:2)