2. provision of venture capital by one
company for another in order to
obtain information about the
company requiring capital or as a
step towards acquiring it
(dictionary.com)
activity of a large company
investing money in a smaller
company in return for a share of
its profits (Cambridge Dictionaries
Online)
5. Corporate Venturing in Technology
Companies
Tech Dev
• R&D
• Labs
Product Dev
• BU Dev
• Open
Innovation
HR
• Recruit
• Knowledge
Man
Bus Dev
• Strategy
• Tiger
Teams
Market Dev
• PR
• Marketing
Acquisition
Licensing
Funding
Joint Dev
SIG
Open Source
InternalExternal
Source: Corporate Venturing in Technology Companies . SDG Group. 2012
6. Access to existing
distribution
channels
Access to
proprietary
technology
Lower cost of
capital
Lower operating
costs
Lower market
entry costs
Pre empt
competitive
retaliation
Make (a lot of)
money
Source: John Bates (C) London Business School 2009
7. Access to new
distribution
channels
Access to
proprietary
innovation
Lower
organisational
cost of failure
Lower
operating costs
Lower market
entry time
Pre empt
competitive
attack
Meet
Corporate
strategic goalsSource: John Bates (C) London Business School 2009
13. provides seed, venture, and growth-
stage funding to the best companies
— not strategic investments for
Google.
Target: Enterprise, Mobile,
Consumer, Health, Data, Science
14. Nike+ Accelerator
(in association with TechStars)
Target: use Nike+ fitness
technology to create products
and services that will inspire
athletes across a broad range
of activities
20. “Intel Capital has the mandate to get the best exit
possible for Intel Corp., not to serve as a feeder for
Intel Corp.,” Sam Hamadeh
Target: invest across the broad spectrum of
technology innovation to encourage the creation of
the technologies of tomorrow
21. Ranking of Tech VC firms, rated by total
number of 2013 exits
Source: http://venturebeat.com/2014/05/08/intel-capital-saw-more-exits-than-sequoia-greylock-or-google-ventures-last-year/
22. The Economist: “Samsung tiptoes into the
technology to get familiar with it, then waits for its
moment…. When it pounces, the company floods
the sector with cash, moving into very high volume
production as fast as possible.”
Target: semiconductor, telecommunication,
software, Internet, bio engineering and medical
industry, film/video industry
23. Amadeus Capital Partners
$75 million
Target: Cloud-based
Software to be used by the
middle class in Africa,
Middle East, Asia and Latin
America
Term Corporate venturing is tricky – many different definitions
Market progress is separate from technology progress. Customers do not always know what they need.
Innovation requires resource allocation which is extraordinarily difficult for disruptive technologies.
Disruptive technology needs a new market. Old customers are less relevant. Disruptive technology is a marketing problem, not a technological one.
Organizations have narrow capabilities. New markets enabled by disruptive technologies require very different capabilities.
Information required to make investment decisions does not exist. Failure and iterative learning are required.
It is not wise to always be a leader or always a follower. Disruptive innovations reward leaders.
Small entrant firms enjoy protection because they are doing things that do not make sense to the industry leaders.
Good Examples of start of CV are Pharma and Chip Industries – both were facing disruption and needed to cover their backs:
Faster response to market transformations
A better (and quicker) view of threats
Easier disengagement
Combine with VCs to magnify the impact of investments
Increased Product/Platform demand
Direct ROI
Corporate Social Responsibility
Start-up View of Corporate Venturing
Corporate View of Corporate Venturing
Playing backwards – currently deal is being handled by Venture Integration Team at MS
Acquisition would have been processed over last many months by MS M&A Team
GreenButton was a Top App managed by Global Azure Incubation Team:
Explain how big corporates have early adoption programs etc. for new Tech
People on the ground are needed to drive engagement
Raised a funding round in 2010/2011 – apparently including $1million from MS
Joined Microsoft BizSpark
So, where are the from – New Zealand. So why aren’t SA companies doing the same?
Consider these factors when dealing with CV programmes