This morning at its Mountain View headquarters, Google held a press roundtable to share some updates about Google Ventures, the search giant’s sort-of-independent investing arm that was officially announced in April 2009. Back then, Google Ventures only consisted of two people — it’s now up to fifteen, with another ten advisors (and it has a new homepage). Leading the discussion were Google Ventures Partners Bill Maris and David Krane, who were joined by Google CEO Eric Schmidt .
The roundtable covered quite a few topics, including why Google Ventures could have an edge on its competition and just how independent Ventures is from its namesake. Among the key details surfaced: Google Ventures hopes to invest around $100 million in 2010, though that isn’t a firm target. The Ventures team is open to investing anywhere from hundreds of thousands to tens of millions of dollars in a deal (and has already made investments in both ranges), but there wasn’t much guidance as to how many investments they’ll make this year, other than it would be more than ten and less than 100.
The big concern we had before Google Ventures was even officially announced was how Google’s interests would play into its investment decisions — are these investments meant to maximize returns or help Google? The Ventures team says that this isn’t an issue; they’re not making strategic investments based on how they can benefit Google, nor do they care if the companies they are looking at are using any of Google’s technology. Likewise, the Ventures arm is not related to Google’s M&A activities — while a company in the Google Ventures portfolio could eventually be acquired by Google, that isn’t one of the criteria going in.
However, while Google Ventures and Google are separate legal entities, Ventures is not entirely independent. “The Ventures team is actually 20,000 people,” Maris says, referring to the approximate number of Google employees. He explains that at any time they might tap into Google’s massive resources, calling on Googlers to help with growing a startup, due diligence, and whatever else Google has expertise in.
This network of Googlers, and their expertise in technology, is what Schmidt referred to as Google’s competitive advantage, contrasted with the business-minded folk who often populate VCs. A significant number of the investments made by Ventures have already come from referrals from Google employees, many of whom have friends that are launching startups (though this isn’t the only way to get Google’s attention).
Maris conceded that some people are initially skeptical about working with Google, but that once they work with the Ventures team, they “understand [Google] is not some amorphous corporation. It’s a group of people trying to work really hard to make the company successful. And comfort follows from that.” In general, Maris says that entrepreneurs are usually excited to work with Google, and that it’s the established VC’s (who are considering co-investing with Google Ventures) who have had the concerns. Ultimately, Maris and Krane say that it will be the actions and behavior of Google Ventures that determine how it is perceived.