Penny Schiffer and Jonathan Grahm, Swisscom Ventures; Summary: Corporate Venture Capital is the practice where a large firm takes an equity stake in a small but innovative or specialist firm, to which it may also provide management and marketing expertise and other assets like customer access or IT infrastructure. The objective for the corporate is to gain a specific competitive advantage, benefits for a startup may include speed of execution and access to resources. In this workshop we explained the concept of corporate venture capital, gave an overview over such activities in Switzerland and provided examples of how startups have used corporate venture capital to achieve their goals. We then worked on concrete examples – own startup ideas or case studies – to explore how to pitch to a corporate venture capitalist. We discussed pros and cons of such concepts and potential roadblocks. www.startsummit.ch

1. How to pitch to a Corporate
Venture Capitalist
(=VC in a big corporation)
Workshop with
Penny Schiffer
Jonathan Grahm

2. Why come to our workshop?
2
1. You will learn how much a corporate
VC can add to your business and
what they‟d expect from you
2. How you can approach a corporate
VC and work with them successfully
3. What to avoid when pitching to a
corporate VC

3. Agenda
3
Introduction (14:15-14:45)
1. Why should a startup work with a corporate (venture)?
2. What‟s happening in the VC world?
3. Pitching to a corporate VC: Strategic fic / Leverage of assets
Preparation of pitches (14:45-15:30)
Pitching-Session (15:30-16:00)

4. Introduction
1. Why should a startup work with a corporate (venture)?
2. What‟s happening in the VC world?
3. Pitching to a corporate VC: Strategic fic / Leverage of assets

5. Definition:
What‟s Corporate Venture Capital (CVC)?
5
CVC is a subset of venture
capital, whereby a corporate is investing
directly to take minority stakes in external
start-ups
vs.
Corporate Venturing refers to when a
company supports innovation and new
projects internally

6. Who are we?
6
Swisscom Ventures (SCV) Penny Schiffer & Jonathan
• Founded in 2005 Grahm
• Team in Zurich,
Lausanne, and Palo Alto,
USA
• 80 MCHF invested in 24
participations:
– 3 Venture Capital funds
– 6 Swisscom spin-offs
– 15 external startups
• Typical portfolio
company:
– 6 years old, 45

7. Innovation Management:
Corporates are moving from innovation project to
start-up + innovation co-creation 7
Revisiting “Build/Buy/Partner” decision-making
Redefining “core” vs. “non-core”

8. Why should Swisscom
25.03.2013
work with Startups?
Folgeauftrag M2M Ventures

9. work with us?
Why should a Startups
Folgeauftrag M2M Ventures 25.03.2013

10. • Low acceptance over large vendors
• Long decision cycles with many
influencers, complex teams and changing
25.03.2013
responsibilities
Folgeauftrag M2M Ventures
• Tough negotiations
• Slow execution

11. Introduction
11
1. Why should a startup work with a corporate (venture)?
2. What’s happening in the VC world?
3. Pitching to a corporate VC: Strategic fic / Leverage of assets

12. Advent of the CVC:
There are more active corporate venture programs (750)
than active financial venture capital firms (>400) 12
Private Equity
1,000
US$M Under Management
Financial VCs
(Consolidated)
500
Financial VCs (Historical)
Corporate VC
100
Micro VCs <$100m
“Super-Angels” <$20m
10
Angels
What does this mean for Startups?
P2P/Crowd
Seed A Round B Round C Round Growth Round
Stage

13. CVC industry:
CVCs are becoming important players that will gap
between angels and financial VCs 13
• Booming segment: 750 CVC funds worldwide
(+ 100 vs. 2011 , + 300 vs. 2005)
• Representing 15-20% of total VC investments
• Largest funds:
– Intel Capital ($10b)
– IDG ($3.5b)
– T-Ventures ($0.9b)
• Recent trends:
• Multi-LP funds
• CVC units broadening scope, e.g. adding incubator and
late stage MBO funds

14. Conclusion:
The Venture Industry has to and is in the process of
reinventing itself 14
• Top players reap 90% of rewards as “the winner takes it all”
=> More competition - everyone wants to be part of the game
• Entrepreneurship is going main–stream
=> number of start-ups exploding but quality going down
=> Innovation is everywhere + no longer consolidated
• Deal scouting will become harder with new „Gatekeepers“
(incubators, accelerators, government)
• Corporates needs are not met and are looking
for faster, cheaper, better access to innovation
=> Creating of Corporate VCs
• Before start-ups died or thrived but now
there are lots of zombies who are in or
should be pivoting

15. Introduction
15
1. Why should a startup work with a corporate (venture)?
2. What‟s happening in the VC world?
3. Pitching to a corporate VC: Strategic fic / Leverage of assets

16. Objectives for the CVC:
Combining financial and strategic benefits
16
Financial benefits
• Minimum target: self-funding status („evergreen‟ fund)
Aggressive
Strategic benefits Business
• Accelerated time-to- build
Financial returns
market for product Strategic growth
launches
• Insight on new
Innovation
Business
culture
potentially disruptive scope
technologies and
trends
• Organizational Value capture Window on
learnings Early-stage
technology
• PR and reputation tech./business
development
benefits
Strategic ties to 16
Strong Weak
corporate

17. Investment Process:
Different Challenges for Startup and Investor
17
Investor
Selecting the right startups Adding value to investees
1 2 3 4
Lead Due Business Exit
generation diligence development
Startup
Selecting the right VC Leveraging the Assets of a VC
Investment

18. Exit:
In an ideal scenario the CVC can play a great role in
acceleration and exit 18
1. Investing just before contracting with Swisscom line
2. Business development:
• First launching on Swisscom channels
• Then winning other telcos as customers and co-
investors 5-6 years
3. Exit opportunities from Swisscom‟s network
(suppliers, customers)
In reality, not all investees end up working with
Swisscom, but the proportion is increasing over time as
we learn

19. What’s in it for YOU?
19
Strategic benefits Financial benefits
• Corporate can become your • Direct: VC investment
first customer / reference
• Indirect: Access to other
• Access to the customer base VCs
• Know how from the
corporate, e.g. product/
software development
• (Sponsored) Infrastructure
> 6 Mio > 1.7 Mio 20‟000
19

20. Group work (45 min)
20
Steps
1. A-Z Grouping
2. Chose one out of two cases or your own
business idea (!)
3. Use the business model canvas to get a
common understanding of your business
4. Prepare an innovative five minute pitch in
which you outline the strategic value for
the corporate and how you want to
leverage its assets
5. Convince us to give you the money that is
needed to make your business fly
6. Presentation of the pitches (3)

21. Cases
21
1 iZettle, the social payments company, creates services for
person-to-person and business-to-consumer commerce. The
first service includes a free iPhone app and a mini chip card
reader that lets anyone take card payments anytime,
anywhere.
2 No need for having different paper loyalty cards in your
wallet anymore. Poinz App brings all your loyalty cards to
your smartphone device.
Cases are not portfolio companies of Swisscom ventures.