Google Ventures, the in-house venture division of the online search engine company, has this month revealed more of its 16-strong team and said it was preparing to invest $100m a year from its funds.
Google Ventures launched last year with $100m, which the firm said had already been invested in 10 companies. Bill Maris, managing partner of Google Ventures, at a meeting with reporters, including news provider Dow Jones VentureWire, at the company’s California headquarters, said Google Ventures was seeking companies with huge potential and was not basing its investments on companies that bring strategic benefits to the parent company.
Maris said: “We are not serving a strategic purpose and looking only for companies to help Google. We are looking for companies Google can significantly help.” The company said in March 2009 that Google Ventures’ investments would be vetted by Maris, the founder of website hosting company Burlee.com who joined Google in 2008, and Rich Miner, a co-founder of Android, its phone operating system.
The other professionals reported by VentureWire are: Joe Kraus, a serial entrepreneur who sold JotSpot to Google in 2006; Wesley Chan, an early employee responsible for Google Analytics and Google Voice; Karim Faris (partner), a former venture capitalist at Atlas Venture who joined Google’s corporate development team in 2008; Braden Kowitz (partner), a lead designer at Google who led design for Google Buzz, Gmail, Google Apps for Business, Google Spreadsheets, OpenSocial and Google Trends; David Krane (partner), Google’s long-time head of communications; Krishna Yeshwant (partner), who first joined Google as part of the new business development team; Scott Davis (venture partner), who contributes to Google Ventures on a part-time basis while he completes a post-doctoral fellowship at Dartmouth College to develop new optically-based cancer imaging techniques; Graham Spencer (venture partner), an engineering director at Google Ventures who was one of the original founders of Excite.com and its former chief technology officer until its sale to @Home and also a co-founder of JotSpot with Kraus.
Google Ventures also lists 10 select advisers who are Google employees, such as YouTube co-founders Steve Chen and Chad Hurley, and early employee Georges Harik, chief economist Hal Varian and chief technology advocate Michael Jones.
Google Ventures is also adhering to a venture capital model in seeking out strong returns, unlike its more experimental cousin Google.org. Eric Schmidt, chief executive of Google, told US reporters: “This is a for-profit investing firm.” Google Ventures is investing across all stages and in a range of sectors from biotech to energy as well as internet technology. While not directly saying how partners would be compensated, Maris said Google Ventures would follow more of a venture model, which pays performance-related fees of at least 20%, called carried interest.
Maris said: “The venture business does one thing well – pay for performance. That is an important part of aligning everyone’s incentives and Profit- seekers: Eric Schmidt, far left, will allow Bill Maris, top, and Rich Miner, bottom, to lead the risk-takers objectives.”
Unlike most corporate venturing divisions, Google Ventures is structured as a separate but wholly-owned entity, with a new fund each year, according to Maris. Google is the only limited partner in each fund. While Google Ventures is currently investing only in the US, Schmidt told US reporters the firm could expand to international territories.
Schmidt said he was not personally involved in investment decisions. He added: “Venture investing is best done by partners who suffer the consequences of investing very directly. Venture is a phenomenal achievement of America. I think all of us, certainly my entire life, were defined by early people who created the venture industry. We are trying to follow the best practices of that model.”
Google Ventures said it was making a new, undisclosed investment in Texas-based financial payments company Corduro. As for the firm’s nine listed portfolio companies, all of those investments have been publicly disclosed except for Recorded Future, a Boston area start-up that “extracts time and event information from the web”, offering “customers new ways to analyse the past, present and the predicted future”, according to VentureWire.
Among the firm’s other investments are Silver Spring Networks, which makes smart meter networking technology, and Pixazza, whose web technology lets consumers “mouse over” product images to learn more about them.