Is there growing resentment of top Wall Street banks--such as Goldman Sachs and Morgan Stanley--in Silicon Valley? Well, truth be told, there has always been a lot of skepticism toward big investment banks in tech circles, especially in the VC community, not that venture capitalists rate that much higher in entrepreneurial circles.

Fortune weighs in with an article that says some recent moves by big banks have generated more anger. The recent Goldman Sachs alliance with Facebook, the author suggests, symbolizes why tech companies are increasingly wary of banks.

"The problem with these kinds of multilayered relationships, some say, is that the bank always wins, even if the startup and individual investors lose. By being both an investor and an underwriter, the banks are often in a position to dictate when a company should do a stock offering--often before they have the financial strength to be traded publicly--collecting fees and seeing big returns without putting much of the banks' own money at risk."

Well, if they're making a big investment pre-IPO, they are putting their own skin in the game. As for going public prematurely, that ended as a widescale phenomena when the dot.com bubble burst. My sense is that Facebook didn't feel bullied by Goldman Sachs. Google certainly did let itself get bullied by banks. Indeed, one could argue that it bullied the banks ahead of the bakeoff, which was won by Morgan Stanley.

Recall how the company summarily nixed Goldman Sachs as a candidate for breaking bakeoff rules. In the end, Wall Street and Silicon Valley enjoy a symbiotic relationship that works when times are good. We are in one of those times now. It will not last forever.

For more:
- here's the article

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