This month’s issue of Global Corporate Venturing welcomes people back from their summer holidays to three of the most interesting issues facing the industry currently and pulling teams in different directions.
First, corporations have spent the past few years looking ever earlier into the lifecycle of entrepreneurs to see how they can support them.
As our analysis of the rise of corporate-backed incubators and accelerators shows, there is attention on the ideas that might disrupt and provide opportunities for established businesses.
This is leading corporate venturing units and their parents to examine how they can work with the other primary source of new and disruptive ideas – those emanating from universities. (Global Corporate Venturing’s sister paper, Global University Venturing, covers more on aca-demic and research institutions’ support for their the ideas of their faculties and students.)
Drawing in the corporations’ open innovation and academic liaison representatives is the second broad theme under analysis this month.
As corporations increasingly look to develop a broader corporate venturing and innovation programme they are starting to formalise the governance of the various tools, such as minority equity investments, mergers and acquisitions, and partnerships and joint ventures, under a chief innovation officer (CIO). Global Corporate Venturing tracks more than 40 such CIOs around the world – many are recent appoint-ments to new posts.
Whether the corporate ven-turing team remains a fiefdom or becomes more integrated into the strategy of the parent will reflect the personalities and politics of each company and the individuals within it.
Corporate venturing itself is a remarkably flexible tool with no single right answer applicable to all businesses.
Instead, the crucial factor is how the governance form fits the individuals to make a better whole, and finding the right people to support and work with entrepreneurs and with the clout to have their ideas taken on board at the parent.
The death in June of Antonie Roux, chief executive of South Africa-based media group Naspers’ internet and corporate venturing units, was one such leader and will be sorely missed beyond his family by colleagues and those who knew him.
Naspers’ tight-knit team of senior managers have been perhaps the most successful corporate venturing group, not just in terms of financial returns but also in its importance to the health and growth wider business.
This month sees the third profile in a series following Naspers and its two main corporate venturing portfolio companies – China-based Tencent and Russia-based Mail.ru.
Naspers owns about a third of each, while Tencent owns less than 10% of Mail.ru.
Together, these three companies have reaped more than $20bn in profitsfrom their minority investments and collaborated on deals.
What differentiates Naspers is not only how it connects portfolio companies but how it integrates minority and majority dealmaking with an eye on the longer-term – the third big issue facing corporate venturing units.
After more than a dec-ade holding Tencent shares, Naspers has yet to sell any of the Chinese media group with a market capitalisation of nearly $60bn.
Instead, Naspers is content to wait for dividends to flowand use the connections and insights to shape its global portfolio.
It is an astonishingly power-ful model in a world increasingly dictated by shorter-term pressures from hedge funds and investment bankers profiting by creating churn and trading costs.
Hopefully, this success will provide an example to help swing the balance towards longer-term investing while financial services becomes a tool to help people, companies and economies to grow, rather than an intermediary reaping an ever-increasing proportion of the returns generated in society.
Most read articles on www.GlobalCorporateVenturing.com in August 2012:
1 BlueRun’s funding challenge
2 Intel Capital cuts listed holdings
3 The big deal: Long-term investing
4 Pierson joins Syngenta Ventures
5 Starbucks shines for Square
6 How venturing disrupts public markets
7 Why value investing is smart
8 Cleveland heart pumps with $30m
9 Profile: Telefónica Ventures
10 How venture success can be stifled