there are companies that are very early stage, even seed stage, that just need a few hundred thousand dollars that we might be able to help, and there are later stage companies that we can add value to as well.
MHT: Many other venture capital firms have moved away from being stage-agnostic and are, if not focused entirely on one stage, have partitioned the stages out among their partners. What makes you think you’ll be able to succeed? Most people think these are very different skill sets.
BM: It’s really important as venture investors not to worry too much about what other venture investors are doing. There is a herd mentality that can take over. We have a strategy that is independent. When I say “stage-agnostic” what I mean is that ventures as an asset class is pretty specific. To limit that more specifically, by saying that we are looking for things that are strategic to Google or only early-stage or only growth capital, you immediately limit the subset of companies you can look at. If you do that you may create higher peaks, but also deeper troughs.
Your second question was about who is an early stage investor and who is a late stage investor and are those skill sets complementary. Our definitive answer is yes. We are looking for great teams and we have a team of people who have started, in some cases, their own companies; Joe Kraus started Excite [Kraus is also an individual investor in San Diego-based OpenCandy, one of Google Ventures’ portfolio companies–Eds.] and Rich Miner started Android with Andy Rubin. The skills that it takes to execute at the early stage are not that dissimilar from late stage. You need to hire great people and execute on the plan and adjust when the plan isn’t working. In my previous life I was a public market investor, and then started a startup and raised venture funding for that company, and didn’t find the skill sets that different from doing one to the other. Great people are able to adapt.
DK: By the way, we’ve been using the nice number 10 for the number of companies in our portfolio. The tenth is one we’re announcing today, Corduro, outside Dallas, TX, in the financial payments space. That one will be up on our site shortly.
X: So far, there is only one life sciences company in your portfolio, and that’s Adimab. Bill, I believe you have a background in neuroscience. I’m wondering whether you are aggressively courting other biotech startups as potential investments. Is that something we can expect to see more of, and what kinds of companies interest you in that space?
BM: You’re correct, my background is in neuroscience, and Krishna and Scott also have life sciences backgrounds. In terms of what we are looking for, the answer is yes, we are actively and aggressively looking at other life sciences companies. You should expect to see future investments in that area. We are not looking for incremental sorts of startups. We are looking for companies that have transformative technologies or are tackling new problems in new ways, things from regenerative medicine to bioinformatics. It’s less likely we would invest in a company that’s moving one therapy from Phase 2 to Phase 3 clinical trials. We are looking to make more transformative investments. That is a primary part of what I spend my time on.
X: You are unlike most venture funds in that you have, in essence, a single giant limited partner instead of lots of smaller ones. I’m wondering how that affects the way the managing partners work?
BM: It is Google Ventures, so while we do operate independently and make our own investment decisions, we do look at the world through Google-colored lenses. The areas that we are interested in, you all know about-=–cloud computing, et cetera. Google is, for us, sort of like the sun and we are one of these planets orbiting around it. Gravity does have an effect on the deal flow that comes in and what kinds of entrepreneurs might be interested and it influences the kinds of companies we -invest in. We are looking for companies for whom access to Google resources and engineering support is beneficial. We don’t require there be some kind of fit there. But when you have a single LP structure, that LP has a lot of influence. In this case, it’s a hugely beneficial influence. The fund wouldn’t exist without
