Gene Frantz is a leading investor in enterprise and cybersecurity, having led investments in some of the most consequential cybersecurity firms of the past decade, such as Crowdstrike (CRWD), Zscaler (ZS) and Expel. He has also led investments in game-changing enterprise firms, such as business software maker Freshworks and data analytics company Looker (acquired by Google).
Gene joined CapitalG at the firm’s inception in 2013. Before then, he led technology and telecommunications investments for private equity fund TPG Capital and for Oracle Corporation's venture capital group.
Gene has a B.S. from UC Berkeley and an MBA from Stanford University. Outside of work, Gene enjoys spending time outdoors and reading everything from historical non-fiction to self-help.
You have been with CapitalG from the very beginning. What attracted you to a young investment fund from Alphabet?
After spending a long time in private equity, the industry increasingly felt commoditized; there had come to be many great, well capitalized investment firms with talented, experienced professionals.
CapitalG offered real differentiation in bringing Google’s insights and expertise to companies that otherwise wouldn’t have access to it in a systematic way. Senior Googlers are energized by the opportunity to share the expertise they’d gained through helping transform Google from an upstart to a global powerhouse.
What types of companies, verticals or technologies excite you most?
Enterprise broadly and cybersecurity specifically have been a big focus for CapitalG and me personally. These markets are very dynamic and brimming with opportunity, and Alphabet’s deep pool of talented engineers and product experts have developed specialized knowledge and insights that really benefit businesses in this space.
In cybersecurity specifically, the challenges are always evolving and solutions are constantly changing - whether election security, data protection or the proliferation of devices across our home and work environments, cybersecurity is more a race than a static problem to be solved at a point in time. The constant change keeps the field extremely dynamic, driving incredible innovation and making it a captivating industry in which to invest.
What is the most challenging aspect of your job as an investor?
Saying no to inspiring entrepreneurs is hard. We often build relationships with management teams well before fundraising, even with teams we don’t end up funding. On balance I like this longer courtship; the earlier dialogue means that when the time comes both we and the company have high conviction in working together.
Another challenge - but also opportunity- arises when companies face tough times. Our portfolio is concentrated, and the time we invest with each business is meaningful. We live with management teams through all the obstacles, so when they struggle, so do we - and when they ultimately triumph through these challenges, we celebrate with them as well.
What are some ways that you try to be helpful to entrepreneurs and CEOs?
I’m always eager to share my personal and professional insight, but what really thrills me is connecting entrepreneurs to Googlers with the deep, specialized expertise to help them tackle any technical or business challenge.
In addition to the Google and Alphabet connections, we also make introductions to leaders from across our portfolio and provide active, hands-on insights and expertise from our incredible in-house growth team. We make these connections actively and also provide ample opportunities for organic connections through our frequent portfolio-wide events for functional leaders who are eager to network and share best practices with one another.
How do you balance head and heart when making a decision? Is diligence just data, or do you sometimes just have to make a bet?
It takes a combination of intuition and analytics to make smart decisions. I’ve had times where the numbers looked right but something felt off, and down the road I’m happy or sad to have paid attention to or ignored that intuition. Likewise, emotion can push you to invest when you really shouldn’t. Successful investments balance both head and heart. One without the other doesn’t work.