Innovation Endeavors managing partner Dror Berman, who runs the fund for Google CEO Eric Schmidt, has already made four investments in Israel, and will announce a fifth investment within weeks. Since it was founded a year ago, the fund has made ten investments, mostly in companies in Silicon Valley and Israel.
"Globes": How did an Israeli student meet Eric Schmidt?
Berman: "When I was an MBA student at Stanford, I was exposed to extraordinary teachers. Schmidt was a lecturer there, teaching entrepreneurship and venture capital. A lot of industry executives there want to teach and contribute to the younger generation. Adults in Silicon Valley and in the US feel responsible to the younger generation."
During his studies, Berman also advised start-ups. "I worked for a few months as an intern at Yahoo!, and I also worked for one summer on a large real estate project in Thailand. After those experiences, I discovered that my true passion was being involved with start-ups.”
Berman entered the job market in 2009, a difficult year for Stanford MBA graduates. "Eric Schmidt offered me a job at his private business, and I was very pleased to take the offer. He is an extraordinary mentor who is forward looking and paints a new world. His extraordinary management style empowers the people who work with him. This gave me a sense of ownership and the drive to succeed."
After a few months of working together, Berman began working on the idea of an investment fund and presented it to his boss. "I wanted to create something that would change the world, and support entrepreneurs. The main motive was to simply be helpful to entrepreneurs.
That year, Schmidt also founded Tomorrow Ventures LLC, a venture capital fund for investing in start-ups, but he liked Berman's idea and decided to finance it.
"The concept behind Innovation Endeavors resembles the investment model of a super-angel: to help and invest in teams that create companies in the earliest stages. We're not restricted to a predetermined format. We do not have to reach huge exits to make a return for the fund, and we do not have to reach substantial holdings in the companies. The strategy is to invest in teams with the best ideas and to help them realize their idea."
What is Schmidt's involvement in Innovation Endeavors?
"He's involved in the vision and strategic direction, and less involved in investment decisions. We have a team of advisors who help in the decision-making, and go above-and-beyond to support our portfolio of companies."
Berman says that Innovation Endeavors emphasizes assisting early-stage companies and matching them with the perfect mentor.
"I don’t have to sit on the board of directors of every company, especially if there is someone more suitable who will add more value than I could. Innovation Endeavors has a number of prominent Silicon Valley executives, such as serial entrepreneur Scott Brady, and Raymond Nasser, Google's media advisor before the IPO. Our job is to connect the companies with the best people in their target market or industry.”
How do you examine new investments?
"We look for companies that do not need tens of millions of dollars of investment, so clean-tech or pharmaceutical companies are not a natural fit for our fund. We look for teams already doing something already running with an idea. We do not invest in a single entrepreneur, because that team members complement each other. There should also be an initial indication of a product."
What sectors do you want to invest in?
“We look for the teams that envision solutions for unmet or future needs, those that dare to challenge how things are done and develop innovative solutions. Our selection criteria are governed by these ideals and not limited by industry.”
Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2011
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