Why Google hasn’t hired any ex-bankers for its investment arm
Google Ventures has landed. As trailed in July, the investment arm of the world's second favorite technology firm has manifested in London. Yesterday, Google Ventures set out its strategy for investing $100m in Europe and disclosed who it's hired to lead the new unit.
The five new partners at Google Ventures' London office are:
1. Eze Vidra - a former senior product manager at Ask.com, principal product manager for EU search at AOL, tech entrepreneur and head of 'Google Campus' (Google's London start-up hub).
2. Peter Read - an Oxford graduate and INSEAD MBA who (seemingly) went straight into becoming a successful angel investor.
3. Tom Hulme - a Bristol University physics graduate with a Harvard MBA who made his money as a sports car manufacturer and inventor of a new magnetic filtration method before getting into angel investing.
4. Avid Larizadeh - a Stanford University graduate with a Harvard MBA and a history of working as a product manager for eBay and Skype before setting up her own, 'luxury bazaar of fashion accessories' (Bottica.com) and becoming an angel investor.
5. MG Siegler - a former film script writer, journalist, columnist and programme director at AOL.
So, none of Google's investment specialists has ever done anything as conventional as working in a bank. In fact, none of Google's investment specialists has ever done anything as boring as spending a chunk of their lives working for a large corporate - the closest any of them came to this was Larizadeh's three years at eBay.
Google's investment specialists make bankers look boring and unadventurous. While bankers work the corporate treadmill in search of ever-more elusive rewards, Google's men (and woman) have been starting companies, writing columns, making films and designing sports cars. And they've still earned more than bankers. And several of them look like surf bums.
More than anything though, Google's hires illustrate how tech investing is its own universe in which bankers' valuation and analysis skills are obsolete. This is somewhat the case with all early-stage investing, but as blogger Felix Salmon remarked recently, it's especially the case in tech. Even late stage deals in the tech industry aren't based on product synergies, said Salmon - they're based on an assessment of whether a product is revolutionary and a leader is visionary. Bankers aren't equipped to judge that. Product specialists with a strong tech pedigree are. From a banker's perspective, that might not be so bad - if only the tech sector didn't seem so much sexier than their own.