Eric Schmidt’s Newest VC Fund

Last December, 16 aspiring tech entrepreneurs were picked to compete for the chance to build a Silicon Valley startup. After an intensive, 48-hour session of team-building exercises and brainstorming, a group of three people who hadn’t previously known each were chosen to create a business: Charles Wang, 36, a psychiatrist; Monisha Perkash, 37, founder of a college financing service; and Andrew Chang, 27, a former energy analyst for Al Gore’s climate change nonprofit. With $150,000, free office space in downtown Palo Alto, and a roster of industry veterans as mentors, the trio tested out dozens of different ideas over the next five months. The team considered businesses around food supply chains, smart grids, and more. Ultimately they decided to make a high-tech remedy for back pain.

This isn’t a plot line for a reality show. It’s a new business development program offered by Innovation Endeavors, a one-year-old tech investing firm funded entirely by Google‘s executive chairman and former chief executive officer Eric Schmidt. The fund has already made small investments in 16 companies, helped two of them get acquired, and nearly completed the pilot round of its Survivor-esque startup-building program, called Runway. While Schmidt provides the backing and big-name managerial gravitas, Innovation Endeavors is run by 33-year-old Dror Berman, an Israeli technologist with no formal investment experience. “You have the fantastic pairing of Eric Schmidt, who is one of the great luminaries of the Internet, and Dror, who is young and hungry,” says Travis Katz, founder of Gogobot, a travel site that received money from Innovation last year.