When Web publishing tool maker Pixazza Inc. announced its $5.75 million Series A last month, what caught The Deal's eye was that Google Inc. (NASDAQ:GOOG) was one of the investors, alongside VC firms August Capital and CMEA Capital. A few days later, Google announced that it was the work of Google Ventures, the company's new $100 million venture capital fund. Google Ventures was also behind the company's October participation in a $75 million round led by Kleiner Perkins Caufield & Byers in Silver Spring Networks, a company that uses technology to improve the efficiency of power grids.
To find out more about Google Ventures, we chatted recently with the fund's managing partners, Rich Miner and Bill Maris.
Based in Boston, Miner (pictured, left) is best known as co-founder of the Android Inc. smartphone software company that Google bought in 2005. His past experience includes helping incubate digital-video-editing pioneer Avid Technology, co-founding Wildfire (which made an early voice-based personal assistant) and serving as a principal in Orange Ventures, a corporate VC fund.
Based in Mountainview, Calif., Maris (pictured, right) founded Web hosting pioneer Burlee.com, sold to Interland Inc. (NASDAQ:WWWW), now known as Web.com. Prior to that, Maris was a portfolio manager for Stockholm's Investor AB, where he co-managed the biotechnology and healthcare portfolios.
Together, they plan on investing in companies from a wide range of sectors, including consumer Internet, software, cleantech, biotech and healthcare. - Mary Kathleen Flynn
The Deal: Why is Google going into the venture capital business now?
Bill Maris: There's a general malaise gripping the globe around real economic problems, but passionate entrepreneurs are not dissuaded by macroeconomic trends. Google grew during a downturn. When panic grips the marketplace, smart people, from Warren Buffett on down, go looking for buying and investment opportunities.
Rich Miner: Google didn't decide to do this in an economic downturn. Google has been planning to do this for a while. Bill was hired 10 months ago to help build this. But while a lot of companies might pull back, Google has long-term thinking, and it's a great time to put capital to work.
How is Google Ventures similar to or different from other corporate VC funds?
Miner: The key thing we're trying to do is to put the startup first versus the strategic interest of the company that's putting up the capital. They have different goals. Strategic investment funds rely on someone from the product or engineering side to sponsor the investment. That's not necessarily good for early-stage startups that need to change direction as they grow and learn about the business.
Certainly, we'll leverage the strengths of Google, but our behavior will be similar to that of a top-tier VC fund. Google is the sole LP. The $100 million is not a fixed amount. It's what's available to us to invest, but we have an advantage there. We don't have to roll out a certain amount of money.
What stage will you be investing in?
Miner: We've invested in two startups already. The first was Silver Spring Networks, a company in the smart-grid space at a much later stage. The other was at a much earlier stage: Pixazza, which uses crowd-sourcing to annotate images.
Maris: We'll be opportunistic about these things and look at where we can add the most value as investors and make the most of the assets that we have, which include 20,000-plus colleagues.
Pipeline subscribers will find more about Google Ventures here.
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