Google Ventures has quickly become one of the most active venture investors in the country. I recently sat down with Google Ventures’ enterprise guy, General Partner Karim Faris, to learn more about the company, its portfolio investments, and what’s on the horizon for 2013. Here’s a recap of our conversation:
Sanjeev: What exactly is Google Ventures—a division of Google?
Karim: We built a radically different kind of venture fund. We have become one of the most active funds in the country, as you mentioned, with north of $1.5B under management.
While Google is our sole Limited Partner, we are not your typical strategic corporate fund. Google Ventures, like a traditional VC, is an independent entity that invests to build great companies and, in the process, make a financial return.
We launched the firm in 2009 and now have about 200 companies in the portfolio, including seed investments. We are headquartered in Silicon Valley, and have a offices in New York and in Cambridge, MA to cover the east coast.
We have funded a healthy mix of companies across enterprise and consumer sectors, some of which were started by ex-Google employees. We generally look for quirky founders with disruptive ideas and are very happy with the deal flow we’ve seen.
Sanjeev: How do you tend to invest? Do you take board seats as well?
Karim: We usually lead, co-lead, or co-invest. We tend to be more collaborative than most. We like syndication, as it brings a diversity of views to the table and enables the company to leverage the networks of multiple parties as a support structure. We do take board seats in most cases.
Sanjeev: Why do startups come to you? How is Google Ventures different?
Karim: Google Ventures is made up of a team of makers. From the firm’s founding, we decided to dedicate a significant piece of our budget to sustaining an unparalleled SWAT team of experts whose mission is to help the portfolio succeed. Our companies also benefit from the global reach and resources of Google and the world’s largest compute infrastructure.
We “scale” efforts through a number of initiatives, like office hours, where portfolio companies can book time with our designers, engineers, or the marketing team.
We also offer classes and educational workshops through our Startup Lab. Startup Lab provides high-velocity learning on lots of topics like front-end optimization, product management, and demand generation. We bring in world-class experts from Google and other major tech companies to teach the classes, which are open to all companies within our portfolio.
Sanjeev: What are the different practice groups you have on staff?
Karim: We’ve invested in four practice areas. Our Design Studio helps you build better product with a goal to help create better user experiences. The most exciting piece to me is bringing in consumer style discipline to B2B user interfaces that have been neglected for far too long. That is going to be even more valuable as more and more data permeates the enterprise and product usability will meaningfully impact sales cycles.
The second practice is engineering. We help you scale, whether it’s by optimizing the backend or helping you make a new database decision.
The third area we focus on is recruiting. We help you hire amazing people. Typically, VCs help start-ups recruit executive talent. We focus on a different need and help you hire direct contributors, line engineers, and product managers. These are the kinds of employees that will have immediate and tangible impact. We have sourcers and recruiters who help fill pipelines, sort through candidates, and set up a proper process.
Lastly, we focus on marketing. We help you tell your story and position product when it’s ready for launch.
Sanjeev: At what stage do you typically get involved with startups?
Karim: We are stage-agnostic and invest across the spectrum. We have an active seed program that is designed to explore promising ideas and teams.
We have a keen interest in early stage as well as growth, where we seek companies with meaningful revenues and tremendous potential for product expansion
What business sectors do you tend to focus on?
Karim: As a firm, we have a broad focus across a variety of promising sectors. We have eight general investing partners with specialties in different sectors. My primary focus is on the enterprise. I have interest in security services, e-commerce infrastructure, and cloud services. Our partners also focus on life sciences, consumer Internet, mobile, and seed investments.
Sanjeev: Thank you, Karim, for providing a look inside Google Ventures. It’s a VC with a pretty unique way of nurturing and growing startups.
