Noteworthy story by Kevin Delaney of the WSJ in ferreting out the details (registration required) about who among the Google insiders won and who lost at the IPO last year. For those who don't have a subscription, it basically summarizes how Google was forced to bargain tough with some of the smaller early investors in order to get enough of them to sell their shares at the IPO. If you remember, investment bankers were forced by negative sentiment to lower the IPO price at the last minute, and many insiders didn't want to sell -- they were aware that the bad vibes at the IPO (playboy magazine fiasco, etc) probably meant the stock would trade artificially low. The big investors Sequoia, Kleiner, etc, had clout to have their way, so Google apparently went after the small fry.

We'll quote a snippet involving David Cheriton. He is the professor at Stanford's computer science department, and was there when Google co-founders Larry Page and Sergey Brin were students. He'd invested in Google as part of the angel round. He counseled the pair, as they navigated the world of venture capital -- helping them hook up with angel Andy Bectholsheim and so on (Cheriton had worked with Andy at another company). Google basically forced him to sell stock for the so-called green shoe, which was the "overallotment" pool reserved in case the market demanded it:

Friday evening, a Google lawyer, Jeffrey Donovan, told Mr. Cheriton by phone he couldn't back out of the overallotment, Mr. Cheriton says. Mr. Cheriton says he replied that he would talk to his lawyer, but then never pursued the issue, partly because he was already locked in a legal contest with his ex-wife. Google wouldn't make Mr. Donovan available for an interview.

Mr. Cheriton says the episode belied Google's high-minded rhetoric. "The well-connected pulled out. The less-well-connected were green-shoed." Still, his share sales brought him nearly $58 million, and he says he doesn't think about it anymore.

Well, come to think of it, $58 million in exchange for a seed investment of a couple hundred thousand, and then a bit of advice over a coffee or two? Hey, we might forgive a little investor inequality too.

Update: Bill, in comment below, is entirely right about the kicker above. Poor effort at humor on my part, about a subject that is way too serious. I was focused too lightly on the magnitude of the $58 million, at the expense of what could have been really hard work by David. It was an unfair statement. Apologies to all, especially David.