REDWOOD SHORES, Calif. – In many ways, Oracle Corp.’s newly launched $100 million venture fund looks a lot like its corporate brethren: The vehicle will make strategic investments in technology companies whose products or services are based on Oracle’s latest technology, a platform for Internet operations.
The Oracle Venture Fund, however, differs from other corporate venture funds in that its main objective is to seek high returns. “It’s our number-one priority,” said Catherine Buan Peterson, senior director of corporate development and one of three people overseeing the venture fund’s day-to-day operations. She hopes venture firms are attracted to Oracle’s returns-first strategy and will be more likely to co-invest with the corporate fund.
At the same time, the Oracle fund will try to entice top-flight entrepreneurs to bypass capital from institutional investors in favor of Oracle’s money by offering young companies access to Oracle’s large customer base, distribution networks and marketing capabilities. In addition, Oracle sees its backing as a seal of approval for start-up businesses.
Formed in January, Oracle Venture Fund has no interest in being the first venture backer of a fledgling company; however, the fund will invest in earlier-stage deals than many other corporate vehicles. Oracle plans to invest $2 million to $5 million in portfolio companies in a first round of financing, and there are no plans to back public companies. Oracle does not want board seats.
Oracle Venture Fund will take advantage of its parent company’s connections – Oracle received many business plans prior to the launch of venture fund – and also will consider opportunities scouted by other VCs.
The database and Internet company had made a few equity investments prior to creating a formal venture fund, but Ms. Buan Peterson declined to name them. She did, however, emphasize that Oracle made efforts to avoid the reputation that corporations have for making slow investment decisions because of big-business bureaucracy.
Senior Directors Gene Frantz, Laurent Sandrolini and Ms. Buan Peterson are in charge of the venture fund’s operations. Final investment decisions are authorized by a three-person committee made up of Gary Bloom, executive vice president of system technologies, Jeff Henley, executive vice president and chief financial officer, and David Roux, a former Oracle executive who recently left to join Silver Lake Partners (story below). There are a total of six professionals involved in Oracle Venture Fund’s investment decisions, less than the staff of an average venture firm, Ms. Buan Peterson pointed out.