Google's two main venture capital backers, which were hoping to raise more than $700 million (€567.83 billion) by selling shares in the initial public offering (IPO), have agreed to hold onto their entire stakes.

Kleiner Perkins Caulfield & Byers and Sequoia Capital, which originally invested $25 million for an 18 per cent stake in Google, were each planning to sell more than two million shares in the IPO. But under the revised terms they will not sell any.

The firms, which had been the main movers behind the IPO, will see their combined stakes valued at between $3.82 billion and $4.27 billion at the limits of the new price range.

Sequoia Capital was due to sell a further 1.19 million shares if the overallotment option was exercised but it will not now participate in any overallotment.

Mr Larry Page and Mr Sergey Brin, Google's founders, have seen the number of shares they will sell cut in half, as has Mr Eric Schmidt, the company's chief executive.

Mr Page and Mr Brin will now be raising about $43 million at the mid-point of the new price range, compared with $117 million at the mid-point of the old range. They will each be left with stakes valued at $3.4 billion at the mid-point of the price range.

Mr Schmidt will raise $33 million and be left with a stake worth $1.3 billion.

The biggest single seller in the IPO is now Yahoo, which will raise about $145 million in the IPO and be left with a stake worth $446 million at the mid-price. America Online is selling 744,000 shares and a further 1.14 million (up from 867,000) if the overallotment is exercised in full.

Even after the price cut, the investment by Kleiner Perkins and Sequoia Capital will be one of the most spectacularly successful in Silicon Valley history, turning $25 million into a holding worth about $4 billion.

The fact that Kleiner Perkins and Sequoia have been unable to realise any of their investment in the IPO will raise expectations that they will look for an opportunity to sell some of their holdings. - (Financial Times Service)