The GOOG has $238 million invested in Uber.
What it’s like to run Google’s $2 billion venture capital fund
When Google’s co-founders, Larry Page and Sergey Brin, decided to set up a venture-capital fund back in 2009, they chose a relatively little-known neuroscience graduate, entrepreneur, and biotechnology investor to run it. His name is Bill Maris, and over the past five years, he’s become one of the most important and powerful men in Silicon Valley.Each year, Maris has $400 million to invest in startups. So far, Google Ventures, of which he is managing partner, has poured $2 billion into 300 of them, including the likes of Uber, the car hailing service; Slack, the office messaging system; Medium, the blogging platform; and a host of life-sciences and health companies.Corporate venture capital funds have been around for years. Chip maker Intel, for example, has had one since 1991. They serve the dual purpose of enabling tech companies to earn returns on their vast cash reserves, and help them keep abreast of innovation in ways that giant lumbering corporations often struggle with.
But Maris and Google have embraced corporate venturing with a vigor that few others can match. According to CB Insights, Google Ventures was the fourth most active VC fund of any kind last year. Six of its portfolio companies have successfully gone public. Fourteen are so-called “unicorns”—still private, but valued at over $1 billion apiece. Only a handful have failed; of those perhaps the most notable is Secret, the anonymous messaging app that closed down last week.
Quartz caught up with Maris this week to discuss all things Google Ventures. The discussion has been condensed and edited for clarity.
Quartz: With Google Ventures, there is this whole question around conflicts of interest. You guys invest in Uber, but Google may have competing businesses to Uber. You invest in Nest; Google ended up buying Nest. How do you manage that?
Maris: I would draw a really big distinction between competition, or potential competition, and a conflict of interest. A conflict of interest implies wrongdoing, whereas competition is really healthy. I set up Google Ventures specifically to invest in things that might compete with Google. In all of the 300 investments, never once has Google tried to influence an investment. And when we set it up, Larry and Sergey don’t have a say. That was intentional. And I said, the first day Google tries to influence those things will be my last day here.The whole business has to be based on our interests being aligned with entrepreneurs. If there is any divergence there, like you see with some venture funds that are raising really large funds then their interests start to go away from what the entrepreneurs’ interests are.If a company becomes big enough where it is actually in competition to Google, that is a huge win [for Google Ventures]. That’s like a great investment that we have made. I would love that, it would be really exciting and we would celebrate that, because we are trying to build big important companies that sometimes have big overlapping interests.
There is always some conjecture about whether the objective of Google Ventures is financial returns or something strategic for the parent company. I can make it very clear: I get paid if we make good investments. And if we don’t I don’t get paid. I have no incentive to sell our companies to Google, the entrepreneurs get to decide that. We are minority shareholders. I get no special credit if Google buys Nest. I get no special credit if they don’t. In fact we recuse ourself from those discussions, and we have sold more companies to Facebook and Yahoo than to Google....MORE