They are the proverbial big shoes for Michelle Gonzalez to fill and a febrile time to do so but the opportunity is also large.
Michelle Gonzalez, head of US-listed Alphabet’s Google search engine division’s incubator, Area 120, has joined software provider Microsoft to run its corporate venturing unit.
Microsoft had been looking for a head of its M12 unit following the departure in February of its founder, Nagraj Kashyap, to be a managing partner at SoftBank’s Vision Funds.
Kashyap has been a titan of corporate venture capital for more than two decades, first running Qualcomm Ventures then transforming Microsoft’s spluttering ventures and accelerator unit before joining SoftBank to help bring the added value to portfolio companies rather than rely on writing big checks as the group had done since raising its first near-$100bn Vision Fund (a move that is already paying off judging by recent performance and decisions there).
Reporting to Christopher Young, the relatively new executive vice-president for business development, strategy and ventures at Microsoft, Gonzalez is taking over M12 at a hot time in the venture market.
Being able to access top entrepreneurs and compete against the wall of cash from hedge fund Tiger Global and mutual funds, such as BlackRock and Baillie Gifford (we are delighted its technology lead, James Anderson, will be speaking as part of our November event series in the UK), is challenging.
Tiger has recently upgraded its value of the private capital markets opportunity to $5 trillion from $3 trillion and this expectation is putting upward pressure on valuations to go alongside the wall of cash available to entrepreneurs.
Fortunately, Gonzalez is inheriting a strong team under managing directors Tamara Steffens, Mony Hassid and Samir Kumar and the ability to source and follow-on with interesting deals, such as PsiQuantum’s $450m round earlier this week.
With more than 100 portfolio companies already and 15-plus exits, M12 has a place at the top table already.
In keeping with the advice given at the GCV Digital Forum by SVB UK’s managing director, Alex McCracken, on the state of the markets, getting access to the next generation of entrepreneurs will remain a focus for Gonzalez, who handily runs the powerful Influencer Series of tech roundtables, as well as building on the incubation strengths she has developed at Area 120.
This might bring Microsoft’s corporate venturing approach to a holistic whole. From using its monopolistic position in the 1990s to try and force its way into venture deals, such as Netscape, to partnering with VCs under the Dan’l Lewin era and then the Microsoft Ventures accelerator approach and most recently M12’s investment activity as an entrepreneur-friendly investor able to add value, Microsoft has tried almost everything.
With Gonzalez in place it now has the chance to do it all at the same time and at scale.