Checking In With Google Ventures

SAN FRANCISCO ( TheStreet) -- Google ( GOOG) Ventures, the venture capital arm of the search giant, is only two years old but has already had several big exits.

Among them, HomeAway ( AWAY), the online vacation rental marketplace which went public in June, and iPhone game developer Ngmoco which was acquired by Japanese gaming company DeNA for more than $400 million.
Google Ventures Managing Partner Bill Maris

This year, the venture arm plans to invest up to $200 million in over 100 companies.

TheStreet spoke with managing partner Bill Maris at the Web 2.0 conference in San Francisco to learn more about Google Ventures, what it looks for in young start-ups and how Google's CEO transition has impacted the fund.

How does Google Ventures interact with its parent company?

Maris: Google Ventures is a separate entity from Google. There are 43 of us right now. We don't invest to further any of Google's strategic products, we invest for financial return. Google is not involved in our investment decisions. The partners that manage the fund are.

What can Google Ventures offer promising start-ups that other corporate venture arms or traditional venture firms can't?

The people on the team are the most important piece. We're people that have founded companies -- Rich Miner, who co-founded Android, is on our team. And the co-founders of Excite, Graham Spencer and Joe Kraus, are on our team. I've also founded companies ... we've all been there.

Beyond that, there are massive resources -- there are over 30,000 people at Google who are experts in something, whether its finance or legal assistance or product development.

Technical and engineering recruiting is another thing we can offer. A core strength of Google's is finding engineers. We have a team of recruiters whose sole purpose is to find and place engineering talent into portfolio companies.

Our third resource is something we call Startup University, where we hold workshops with portfolio companies to teach them about topics like mistakes we've made, or design or data security.

What are some areas that you're devoting specific attention to?

Social, local and mobile are the three buzz words, they touch a lot of consumers so you hear a lot about them.

You also see a lot of activity around areas like biotech and life sciences where there is a lot of innovation going on. It doesn't get the massive press coverage that a consumer app distributed on iPad might get but it's really important work. DNAnexus and Foundation Medicine are two companies we've announced investments in within the week that are working on improving human health care.

Our overall theme is looking for fantastic entrepreneurs working on hard problems--the category is irrelevant.

What do you look for when you're evaluating investment opportunities?

We look for flexible entrepreneurs that are engaged, highly technical or know how to hire and find technical talent. We look for people that will be able to make hard decisions and change their businesses if need be.

Having started a web hosting company in mid-90s that was originally web design, we were only successful because we changed our focus a number of times. It's hard to do when you have a cognitive bias towards the idea you invested in.

We're looking for someone you can sit down with for the next five years with while we're sitting on their board. This is long ball, this is not investing in a company and trying to flip it in six months, that's not how we invest.

Talk to me about your background.

My background is in neuroscience. I then went to Wall Street where I was a portfolio manager. In the mid-90s, I decided to take a break and I started an Internet company. I became a rookie again and built a web hosting platform called Burlee which was one of the largest in the world at the time. I sold it and merged with the company that's now It was a fantastic ride and I learned a lot and I know how hard it is.

That's a theme in our team--its easy to empathize what an entrepreneur is going through if you've been there. If not, you're just simulating that, and entrepreneurs can read through it. I could read whether someone could feel my pain or not, and it was harder for me to connect with those that couldn't understand what I was going through.

You specialize in investments within the life sciences and bio space. Do you have a special affinity for these types of companies because of your background?

Yes, it's my background and it's something I enjoy. We know that investors who invest outside of their domains of expertise are not correlated with positive investment returns.

But my interest in life sciences is deeper than that. These companies are trying to solve important problems --we all know people with cancer. You can't start a biotech company in a garage -- it takes a lot of money, PhDs moving physical molecules from one place to another, its something that can take a long time and is really different than starting an app company.

We'd like to invest in companies that can alleviate suffering and cure disease. Its personally rewarding--to be able to help a company in some way do something positive for the world is not just good business, it's a good way to be.

Google co-founder Sergey spends a lot of time thinking about Parkinson's Disease and donates a lot of money to the cause. Google's values are a reflection of Sergey's values, and things that we care about.

How has the CEO transition impacted Google Ventures, if at all?

Google changes so often and so quickly that it's hard to ascribe one difference to one CEO or another. Google CEO Larry and former CEO Eric have always been big supporters, as well as Sergey. Those three have always operated as a triumvirate and it's hard to find airspace between the three of them. I constantly get the question 'can you do more, faster.' Whether it's coming from Larry or Eric or Sergey is irrelevant.

-- Written by Olivia Oran in San Francisco.

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