Bill Maris is unimpressed with the mechanics of Silicon Valley venture capital.
He sees a lot of short bets on incremental advances and copycat apps. He thinks partners get paid for putting money to work — not for making ambitious bets.
From the start, Maris sought to do things differently at Google Ventures, which he founded in 2009 after years as an investor and entrepreneur.
The fund’s partners hunt for young companies aiming high and strike deals that could take more than a decade to pay off. They’ve spread money across a broad portfolio, including areas with riskier technical challenges like clean energy and health. And the firm has applied a famously data-driven approach, hiring up quants and devising complex computer models that Maris believes offer better predictions of market outcomes.
The fresh-faced Maris, 39, cuts a low profile in Silicon Valley relative to the dollars at his disposal, deliberately avoiding the industry’s endless glad-handing dinners and conferences.
But last month, he sat down for an hour-long conversation with Re/code in his Mountain View, Calif., office.
Google Ventures occupies a squat building on the eastern edge of the search giant’s sprawling campus. From the outside, it’s just one of many plain white rectangles arrayed across the Googleplex.
Within the recently remodeled space, however, the company’s primary color palate gives way to dark wood and glass panels. You won’t find a nap pod or cartoonish Android statute here.
It’s in Google’s world but not quite of it: A $1.5 billion fund operating with a lot of latitude inside the $400 billion conglomerate.
Google Ventures arguably earned its rope after a bang-up 2013. The fund laid 75 new bets as it cashed chips on ten exits, including Monsanto’s more than $900 million acquisition of Climate Corp. and the initial public offerings of RetailMeNot, Silver Spring Networks and Foundation Medicine.
To some degree, Google Ventures’ unusual approach is a luxury afforded by a single LP with a fat pocketbook and plenty of patience. It also certainly helps that the mothership will occasionally acquire portfolio companies, lend them expertise, guarantee them press attention and present intriguing partnership scenarios (like, say, self-driving Ubers).
But to date, the firm has operated through five booming years in Silicon Valley with loose cash and winner-take-all mentalities driving acquisition valuations well north of frothy. The real test of the model may come during more turbulent times.
As it is, some of the portfolio businesses have already stumbled....MORE
