Investing in many startups requires a great deal of judgement and some due-diligence, far more than either IBM or Yahoo were capable... If direct investment were in-house scalable, institutional investors wouldn&#x27;t invest in VC funds, but it&#x27;s a very high-risk, somewhat hands-on activity to avoid throwing all money away.<p>It&#x27;s not called a warchest for nothing, so although it might give competitors some pause, it does chap investors for not disbursing larger dividends or reinvesting in growth&#x2F;m&amp;a, and it additionally paints a larger bull&#x27;s eye on them for capital extraction.