Sure Google loves the almighty algorithm, but does it love it so much that it actually thinks it can have a venture firm without a committed, stable partnership of flesh and blood humans? With a revolving door at Google Ventures over the last year, it’s a valid question.

It's also a question that Google is going to have to answer for itself now that two of the most visible members of that team – former Digg and Milk co-founder Kevin Rose and former Crunchfund partner and Techcrunch reporter MG Siegler* – have changed roles in dramatic fashion in the space of three weeks. [Disclosure: MG Siegler was a partner at Crunchfund at the time it invested in Pando.]

Both Rose and Siegler were relatively new additions to the firm, and just a few months ago, longstanding partner Joe Kraus -- on sabbatical in Europe at the time -- was referring calls to them, telling would-be investments that the two were leading the firm’s early stage investment practice. The sense in the market was that Kraus was phasing out, and Rose and Siegler would be the heart of the "firm" going forward.

Or not.

Rose announced on Friday that he will be stepping into a part-time role with Google Ventures with the goal of focusing more on building his own products under an oddly named incubator, N-O-R-T-H. Never mind that he tried that once before with Milk and seemingly lost his nerve, selling to Google after his first product, Oink, disappointed. Everyone is saying the right things publicly, and Rose is contractually obligated to give Google Ventures exclusive access to his future dealflow, but that’s hardly a consolation for a firm that needs ongoing leadership and investment stewardship.

Meanwhile Siegler was recently shipped off to London to open the firm’s new European office there and, presumably, to build out a practice around its newly announced $100 million new overseas fund. This as he himself admits that the Valley remains the undisputed "center of gravity" of the startup world. We’ve heard that his role will be largely operational -- hiring people and setting up structure, not doing actual investments. And it’s also supposed to be temporary. It’s possible, he’ll return to the Valley eventually and resume doing deals there full time. But given the importance of ongoing relationships and new deal flow in this business, that seems like an ill-conceived strategy at best.

The important thing to note is that in the venture business no one is ever really fired. Rather, people just fade away. Partners commonly still have titles, slots on their firm’s website, and even maintain offices and admins long after they’ve been asked to leave or even decided to leave on their own. Case in point, Siegler’s girlfriend, Megan Quinn. The former Kleiner Perkins Partner is still listed on the firm’s website as a Strategic Advisor, even though she too has moved to London where Kleiner doesn’t actively invest. The firm has confirmed that it thinks the world of Quinn and that her departure was entirely voluntary, but what exactly a "strategic advisor" is certainly isn't clear to the market.

After publishing, a representative from Kleiner Perkins offered the following statement: "In her role as strategic advisor to the firm, Megan will continue to actively advise portfolio companies, serve on boards and source new investments."

The entire point of this exercise is to be vague and allow people to save face and continue relationships with existing investments, while preventing anyone on the outside from guessing what’s really going on. It's possible the phasing out Rose and relocation to a non-investing role for Siegler is all a wild coincidence of timing.

But this much we know: At its core venture capital -- particularly seed investing -- is still a people business. Startups want one of two things in a venture firm. They either want dumb, deep pockets or a committed partner they know they can count on for advice, hiring help, and future funding. With the revolving door of departures, Google Ventures has solidly put itself in the first camp -- at best.

That's not necessarily a disaster when it comes to returns. Yuri Millner created billions in market value by investing at high prices, and not taking board seats. But it's not how Google Ventures has billed itself in the startup world. At the time of the Milk acquisition Rose and his team were supposedly committed to doing hands-on work of helping companies on design and product -- two of his strengths. Ditto Siegler. Their dozens of portfolio companies have just learned otherwise.

Partnership in Flux

At Google Ventures, this much seems clear: Earlier this year, Rose and Siegler were positioned as the future of the firm. Now, neither of them is a full-time partner in the US.

This means one of two things. Either, being a partner at Google Ventures simply doesn’t require the same level of commitment as a partnership of a typical venture firm. If that's the case, companies should beware taking their money, or they should do so without any expectation of continuity. (Add to that the history of asking money back, and leaking that to the press and this argument only grows stronger.)

The alternative explanation is that Google Ventures has cleaned house, albeit discreetly, due to disappointing performance or a strategy that's fallen out of favor with the top. Either way, it doesn’t look good for the corporate VC firm that so many people thought would reset the perception of corporate venture.

Let's do a quick roll call, before we dig into performance issues. According to the Google Ventures website, the firm’s Seed practice is still led by just Rose and Siegler, both of whom have very obviously turned their attention elsewhere. Add to this the January departure of the firm’s then third “seed stage”-focused partner, Wesley Chan, and the obvious question is: Who will make the firm’s earliest bets? Who does a first-time entrepreneur recently graduating from Stanford or MIT aspire to meet with?

Every partner at Google Ventures reportedly has the latitude to make seed investments, even doing so without the approval of the full partnership. But seed stage companies can be the most difficult to source and evaluate, not to mention they often need the most handholding post-investment.

The Google Ventures consumer team, on the other hand, consists (consisted?) of Rose, Kraus, and David Krane, while the mobile team includes Rose, Kraus, Krane, and Rich Miner. Kraus is freshly back from sabbatical, and while it appears that he's recommitted to the firm, the perception among several of his portfolio companies has been anything but confidence. This would leaving the above lists especially thin with just David Krane in the Bay Area and Richard Miner in Boston as partners on stable ground.

Commerce, Enterprise, and Life Sciences were never really in Rose and Siegler’s wheelhouse, but when it comes to seed, consumer, and mobile, there’s an obvious void.

Rose and Siegler aren’t the only partners at Google Ventures, but over the last 12 to 18 months, the firm’s public perception has been inextricably linked with these two. Take, for example, the report by Kara Swisher that the firm opened a San Francisco office “for Kevin and MG.”

We’ve heard from some people in the industry that in both cases Rose and Siegler’s moves were voluntary, while others tells us their marching orders were more likely handed down from the top.

Ultimately, who decided what doesn’t make a huge difference for portfolio companies. Either way, this is horrible news for Google Ventures and their portfolio companies, marking effectively the third reboot of the partnership in just five short years.

Seed Venture Report Card

Sure, Google has a lot of cash -- but it takes more to be a player in the insanely crowded Silicon Valley venture world.

While Google Ventures makes headlines by investing late (and big) in the likes of Uber and Nest, the firm has historically spent the majority of its time and energy sourcing and backing early-stage ventures. Pulling from CB Insights data, 64 percent of all Google Ventures deals over the last five years occurred in the Seed or Series A rounds. Over the last 12 months, the firm invest in six deals of less than $1 million in size, 36 deals between $1 million and $5 million, and 12 deals between $5 million and $10 million. The numbers in the prior 12 months period followed this same pattern, with 8, 31, and 13 deals in each respective category.

How should an entrepreneur who took money from Rose, Siegler or Chan (or Kraus) feel in light of recent leadership changes? They've effectively been orphaned, by -- not one, or two -- but at least three, maybe four high profile partners.

During his 27 months at Google Ventures, Rose made (or was associated with) 25 investments. Most notable among these deals were AngelList (Series B), Medium (Series A), Nextdoor (Series B), and Ripple Labs (Seed). Not bad, but no obvious unicorns in the bunch, especially ones where he made his trademark early bets. Rose’s track record as an angel, however, is far more impressive, including personal bets on Square (Series A), Twitter (Series B), Zynga (Series C), Wealthfront (Series C), and Foursquare (Seed), among others. On the other hand, investments in Path (Seed) and Fab (Series A) look less likely to pay off as anticipate, although that’s par for the course in this game and plenty of other smart investors made those bets.

Siegler spent just 14 months in Google Ventures’ Bay Area office, and made 10 investments during that time. He’s perhaps most notable for his apparent obsession with messaging anonymity and secrecy, backing Secret (Seed), Rumr (Seed), and Confide (Seed) – deals which could be more memorable for the harm they cause to users than the returns they generate for investors. While at Crunchfund, Siegler constructed a more pedigreed portfolio spearheading the firm’s early stage investments in Mailbox, Vine, IFTTT, and Tilt, as well as later-stage bets on Uber, AirBnB, and Tumblr.

The burning question is, did Rose and Siegler’s output at Google Ventures match that which they achieved prior to joining the firm? The data clearly says no. Further, neither has shown a penchant for identifying the kinds of far-out science experiments that Google Ventures founder Bill Maris professes to love – or even the type of industry disrupting business model innovations demonstrated by Uber or AirBnB.

Of course, it takes time to prove you can be a good VC, so judging them off a ten month stint isn't entirely fair. But that's precisely the issue: If we take them at their word that they're thrilled about the new moves, there's something disturbing and irresponsible about investing in this many young companies and then abandoning them so quickly.

You could argue, Google should have anticipated this. Rose has long seemed to be the victim of a recurring case of FOMO that sees him flip-flopping between builder and investor, or even between different companies like when he got distracted from Digg during its peak by building Pownce. And, similarly, Siegler already jumped from one long term commitment at another venture firm when he left Crunchfund after just 19 months to join Google Ventures, saying at the time:

Just as I took my time in deciding to switch careers a year-and-a-half ago, I’ve been talking with the Google Ventures team for a few months now. After getting to know the partners and hearing the vision for the fund laid out by managing partner Bill Maris, it became clear that this would ultimately be a perfect fit.

Sure, people flip-flop between jobs all the time in the Valley. The free-flow of human capital from company to company is what built this place. But in general, that doesn't happen in the venture business. It's the one corner of the Valley where a commitment is supposed to mean something, which is one reason it typically takes a year or longer for partners to get hired. Most funds are ten year commitments, and startups whose partners leave are generally considered orphaned when it comes to future support. Even highly dysfunctional firms tend to stay together "for the sake of the children" and their own self-interest. A reputation that partners come and go would be death for even top firms.

So what, exactly, is Google Ventures' MO?

A Firm Searching for Identity

Most corporate VC arms struggle to retain superstar partners. In most cases, the economics aren't there to support them, so great investors are better off being at a traditional venture firm. But what makes this such a head scratcher is that Google Ventures was supposed to be different.

Google Ventures was founded in 2009 by Bill Maris with the goal of reinventing corporate venture capital – which is why the firm is notoriously adamant about being a financial rather than strategic investor. Maris and crew now manage $1.5 billion in capital and are allocated an additional $300 million per year from their deep-pocketed LP (Google), although this number is flexible as demonstrated by its single $258 million investment in Uber earlier this month.

But as idealistic a vision as Maris has outlined for Google Ventures, there remain very legitimate questions about the ability of corporate VCs to behave like traditional, independent investment firms. External perception of Google Ventures has remains mixed according to dozens of conversations with entrepreneurs and investors in recent weeks, with many in both camps still hesitant to work with the firm. For VCs, the fear is that Google Ventures doesn’t share the same motivations as a traditional venture firm, ostensibly maximizing the success of its portfolio companies. For entrepreneurs, the fear is similarly that the firm is less engaged in each deal than other investors, and that Google isn't as "arms length" as it would like companies to believe.

As for its investment focus, Maris has been known to emphasize making the kind of ambitious, moonshot bets that Google Ventures’ corporate parent has become known for, and does not appear to be too excited about backing the next anonymous messaging app or photo-sharing experience. In a recent ReCode interview he said, “I think [Google CEO] Larry [Page] would be quite happy if we invested in far-out things that didn’t make any money, even if it took ten years, as long as it furthered the science.”

Doesn't quite sound like anonymous bullying app Secret, does it?

According to CB Insights, Google Ventures may actually be de-emphasizing the sectors with which Rose and Siegler have been most closely associated. The research firm writes:

While Google Ventures has upped its involvement in the Internet Software & Services industry as a whole within the last few years, the firm has drastically decreased its investment in the Social space within the internet sector and increased it in more “enterprise-y” areas, as evidenced by its investments in Cloudera, DocuSign, and Hubspot.

The firm has also shifted away from the Social space on the Mobile Software & Services side and increased investment in the Video and Health & Wellness sectors, as evidenced by their fundings of Vungle, Jumpcam, and FitStar Labs. Google Ventures had a banner year in 2013, completing 75 new investments, while it cashed out via ten exits, including Monsanto’s mega-acquisition of Climate Corp and IPOs of RetailMeNot, Silver Spring Networks, and Foundation Medicine. With this as a jumping off point, it's hard to argue that this is a firm in trouble.

But what is clear is that Google Ventures needs to decide, quickly, how it wants to be seen by the entrepreneurial community. And then it needs to rebuild its partnership accordingly. And someone, somewhere has to make a believable commitment to be there for the companies they back.

Until then, the message to founders seems clear: Need cash? Great. Google has tons of it. But if you're looking for a true partner, you'll probably be wise to look elsewhere.

Google Ventures declined to comment for this article while request for comment from Rose and Siegler were not returned. We will update this post in the future if additional information becomes available.

[Image via NDTV]