Amit Garg and Sanjay Rao have spent most of their professional lives developing technology, creating startups, and investing in startups in places like Google and Microsoft, HealthIQ and Norwest Venture Partners.
During their decades-long friendship, the two men discussed working on a venture fund, but the time was never right – until now. The two men have been raising capital for their start-up fund Tau Ventures since last August.
Like the two partners, the name is a bit shaky. Tau is twice pi and Garg and Rao chose it as the name for the partnership because it symbolizes their analytical approach to investing at a very early stage.
It's an odd thing to raise a venture fund in a pandemic, but for Garg and Rao, the ability to provide investment capital to startups working on machine learning applications in healthcare, automation, and business was very early on miss.
Garg had worked at Google in Silicon Valley for twenty years, starting companies like HealthIQ. Over the years, he had built an investment portfolio that included the autonomous vehicle company Nutonomy, BioBeats, Glooko, Cohero Health, Terapede, Figure 1, HealthifyMe, Healthy.io and RapidDeploy.
Rao, a Palo Alto, Calif., MIT alum, Microsoft product manager and founder of the Accelerate Labs accelerator in Palo Alto, Calif., Said it was important to return honing skills to entrepreneurs after decades in the valley of an operator.
Both Rao and Garg acknowledge that a number of funds have emerged that focus on machine learning, including Basis Set Ventures, SignalFire, and Two Sigma Ventures. However, these investors lack the direct business-building experience that the two new investors have.
Garg, for example, actually built a hospital in India and has a deep background in healthcare. As an investor, he's already seen an exit from his investment in Nutonomy, and both men have a deep understanding of the corporate market – especially when it comes to security.
To date, the company has made three investments in automation, three more in enterprise software and five in healthcare.
According to Garg, the firm currently manages $ 17 million in capital raised by institutional investors such as the law firm Wilson Sonsini and a number of undisclosed family offices and individuals.
Much of that capital was tied up after the pandemic, Garg said. "We started on August 29th … and finished the finals on May 29th."
The idea was to close the fund and bring capital into operation – especially in an environment where other investors were burdened with sorting their existing portfolios and were unable to deploy capital so quickly.
"Our last investment was made entirely through Zoom and Google Meet," said Rao.
This virtual environment extends to the company's shareholder meetings and conferences, some of which have attracted over 1,000 attendees, according to partners.