Raja Jasti’s Blog - Renaissance Thinking

From techcrunch:

If you are an entrepreneur trying to figure out how to navigate your way to a pitch session with them, below is a cheat sheet with the basics you should know.

• A $100 million fund (that is the amount of capital allocated over the next 12 months).  “We don’t have to invest $100 million this year,” notes Maris, “it is what we want to do.”
• It will focus on seed and early stage startups across any industry, but “won’t invest in a company that we don’t think we can properly vet and understand,” says Miner.
• The first two portfolio investments are Pixazza (”AdSense for images”) and Silver Spring Networks (smart grid technology).
• The sole limited partner is Google
• All venture investing from the company will now be done through Google Ventures (for instance, Google.org will no longer be making venture investments)
• Larger strategic investments in the range of hundreds of millions or billions of dollars will still be done by Google’s corporate development team led by David Lawee
• One-way mirror policy to protect startups from prying eyes. “We can look into Google, but Google can’t look into the companies without asking,” promises Miner.
• Overriding investment criteria will be ROI, not strategic motivations.
• But that doesn’t mean strategic considerations will be ignored either.  “If a company comes in the door and it looks like something important for Google to acquire,” says Maris, “we will defer to Google’s corporate development department to take a look.”

I think entrepreneurs need to be careful when taking money from institutional investors as there can be unwritten strings attached and conflicts of interests. With regards to google ventures, this is a problem only if you are a web or media company. Imagine if twitter or facebook had taken investment from google ventures. You get the idea.

Google announced the launching of google ventures, google’s venture capital arm.

SAN FRANCISCO — Google, which has invested in many startups over the years, will announce on Tuesday that it is creating a venture capital arm whose main objective will be to turn a profit.

The group, called Google Ventures, is expected to invest up to $100 million over the next 12 months. It will be overseen by David Drummond, who will continue in his role as senior vice president of corporate developing and chief legal officer at Google. Investments will be vetted by William Maris, who joined Google about a year ago, and Rich Miner, a co-founder of Android, a mobile software startup that Google acquired in 2005.

Mr. Maris said in an interview that Google will tap the connections of its employees and its ties to the venture capital world to find promising startups in areas like the Internet, clean technology and life sciences.

“A lot of the things we have done in the energy area the kinds of things you might see from Google Ventures,” Mr. Drummond said. He said that Google’s corporate development arm will continue to make other investments.

Google Ventures has already made two investments: Silver Spring Networks, a company that makes technology to help manage electric grids, and Pixazza, which links online images with related products that can be purchased. Google declined to say how much it invested in those companies.

This is an interesting move by google in terms of its timing. These times are seen as bad for the VC industry. VC firms cash in when the companies they fund either get acquired or go public. Well, companies are not buying right now and you know about the stock market. But google has always been a contrarian. It will be interesting to see how they do in the venture business.