Reid Hoffman, serial angel investor and co-founder of business networking site LinkedIn, has warned corporate venturing units to avoid over-selling the amount of support they can give portfolio companies.
However, he said corporations could be "critical" in helping an entrepreneur build a diversified syndicate of investors.
Hoffman, part of a visiting group of US-based technology entrepreneurs, companies and venture capital firms to the UK, said last week that indirect corporate venturing – being a limited partner in independent venture capital firms’ funds – meant the corporation was regarded no differently than any other investor.
However, he said direct investing – taking minority equity stakes in third party companies – could help the entrepreneur assemble a mix of investor types in a syndicate. He said this diversification was "critical" for entrepreneurs to do, while warning the corporate venturing units not to oversell the amount of support the parent companies could bring.
Hoffman said LinkedIn, which has software company SAP and media group McGraw-Hill as investors, effectively still had its options open as to a potential flotation. In July, hedge fund Tiger Global Management bought 1% of the company at a $2bn enterprise valuation, according to news provider Forbes.
He made his comments at a media briefing organized by the UK’s National Endowment for Science, Technology and the Arts (Nesta) before the group, Silicon Valley comes to the UK, travelled to Cambridge and Oxford universities.
Hoffman said the next big thing to emerge would be enterprise software for mobile devices.
The rest of the group also gave their predictions. David Hornik, a partner at VC August Capital, said human genomics would be the next big thing, while David Helliwell, founder of cleantech firm Pulse Energy, said it would be reorienting society towards happiness.
Megan Smith, vice president of new business development at search engine group Google, said 900 million Africans being able to use the internet without needing satellite connections would release the talent there. She said: "The big difference between the developing and developed world is access to technology."
Mike Schroepfer, vice president of engineering at social networking site Facebook, said it would be the melding of computation and humans rather than having to bring people to computers. Hans-Peter Brondmo, head of social software and services at mobile phone maker Nokia, said the next big thing would be robotics.
The group admitted while there were some things the UK and Europe could do to improve innovation and entrepreneurialism, they could never replicate the US’s Silicon Valley.
However, Nesta said it was important to try. Its study of six million businesses in Europe, the US, Canada and New Zealand between 2002 and 2005 found European companies grew slower than US peers, but also shrunk less quickly than Americans.