Only in the curiously narcissistic and parochial world of venture capital could a firm proclaim itself to be a “radically different kind of venture fund” from its peers partly by dint of having read academic papers that identify where other firms have succeeded in the past, but Google Ventures is nothing if not confident in its abilities.
That confidence extended last year to search engine Google doubling its annual commitment to its independently-managed ventures team, whose staff are not employed by Google, to $200m per year. It is also boosted by Google using quantitative analysis to process deals data to help make investment decisions in a way few venture capital firms have managed.
The only peers with growth comparable to that of Google Ventures since its official launch in 2009 are perhaps China-based media group Tencent setting up a $1.5bn Industrial Collaboration corporate venturing fund at the start of last year, or Andreessen Horowitz, a venture capital firm that has raised $2.7bn in just three years.
Google Ventures was set up in 2009 with a financial returns objective as a consequence of the company having developed a scattered and incoherent basket of about 50 minority equity investments in companies around the world and across multiple sectors.
Google Ventures has in three years invested in more than 100 companies, of which more than 80 are listed on its website, including at least three exits – HomeAway, Milk and Dasient.
In a profile by news provider Fast Company published in May, Bill Maris, managing partner of Google Ventures, said it had “already generated tens of millions of dollars of profit for Google. That is almost unheard of in the venture industry for a firm our age.”
Maris is sole managing partner after Rich Miner, who also had the role when the unit was formed, became a partner and concentrated on striking more deals.
In its re-evaluation of the venture industry, Google has divided its team into a number of different streams, including investment, hands-on support of portfolio companies, administrative and entrepreneurial outreach and incubation.
Along with an investment team of 17, with a further six people in engineering, three in marketing, four in recruiting and four in design – including some of the investment partners – there is a Startup Lab run by director Rick Klau that includes Stacy Brown-Philpot as an entrepreneur-in-residence and Yuan Yuan as a statistician.
As Google Ventures says on its website: “Our hands-on teams work with portfolio companies full time on design, recruiting, marketing and engineering. Startup Lab is a dedicated facility and educational programme where companies can meet, learn, work and share. We invest hundreds of millions of dollars each year in entrepreneurs with a healthy disregard for the impossible.”