US-based café chain Starbucks made a big splash in corporate venturing sealing a $25m deal to invest in fast-growing US-based financial payments company Square, founded by Jack Dorsey, also a founder of social network Twitter.

Starbucks chief Howard Schultz will be joining Square’s board in a sign of how seriously Starbucks is taking the investment. He personally signed off the deal, as this cute photo from Dorsey shows. Fascinatingly it marks a bit of a change for Schultz, who until now appeared to have separated his interactions with start-ups from his day job.

Starbucks is not a big presence in corporate venture investing, although it was relatively active before the bursting of the bubble, and it has seldom crossed Global Corporate Venturing’s radar in the past two years. Schultz’s venture activities with Maveron, a venture fund with $800m under management where he is co-founder, sees him in contact with darlings of the start-up world. Schultz and Starbucks declined to comment for this article.

Last year, Schultz joined the board of daily deals site Groupon after Maveron invested in the company, although he departed that board in June. Schultz has also worked on the board of former Maveron portfolio companies eBay, the auction website,, a US-based online pharmacy, and made-to-order sandwich company Potbelly Sandwich Works, as well as continuing to serve on the board of yogurt company Pinkberry.

It will be interesting to see how Schultz manages any conflicts between a renewed interest at Starbucks in corporate venturing, with his Maveron activities. With increased regulatory scrutiny of such executive conflicts, it could be the case that company executives pursuing venture in their spare time may face anti-trust scrutiny. Of course, it is a well-trodden rode with executives such as LinkedIn executive chairman Reid Hoffman and Google executive chairman Eric Schmidt vigorously pursuing venture and angel deals.

Yet no choice is easy when you wear two hats. To some, Schultz and Starbucks being aligned with Square, could be damaging to Groupon and other companies targeting local shopping experiences. Howard Lindzon, chief executive of StockTwits, said: “[The Starbucks deal] makes [social network] Foursquare and Groupon potentially less relevant.”

Even if Schultz may face these personal issues, the potential of Starbucks getting deeply involved in young companies is generally positive. Lindzon said: “It is just super interesting that huge corporations are partnering so deeply with relative start-ups.”  It is hard not to agree.