Justin Adams, who stepped down two months ago as head of UK-based oil company BP’s corporate venturing unit, said there was "a renaissance" in corporate venturing, and outlined ways for others to learn from his six years at BP.
Adams, who left BP Ventures this year, cheered the wider growth of the corporate venturing industry in the key note address at Global Corporate Venturing’s second annual symposium on Tuesday.
He said despite its resurgence, corporate venturing faced problems meeting the challenges of creating meaningful growth for the corporate as well as spotting future areas of growth, in an environment where short-term returns would be weak.
He said: ""There are big challenges all corporates are grappling with. One example is big questions around the sustainability agenda. What can corporate venture groups really do to help tackle those challenges? Clean tech promised a lot, but clean tech itself is running into some real challenges."
Adams added a particular area of interest in sustainability was the usage of land. He said: "Bioenergy is one area where we need to reframe the issues beyond simply food versus fuel. There is a huge amount of degraded land globally. As you dig deeper, if bioenergy development is able to bring more of that degraded land back into productivity we could take pressure off food production, enhance energy security and potential also enhance the land’s ability to act as a sink for more CO2…. It is interesting to think how an understanding of different stewardship of the land can create a far larger amount of value for society overall."
Corporate venturing groups should be aware they need large resources to meet difficult objectives, Adams said. He said: "Depending what are you trying to do, you then need to resource that appropriately. There are all kinds of examples of where you are being asked to create a whole new business, but actually you are only being given a couple of million dollars from a CVC budget and that might be a challenge. Ensure you know what you are trying to do and are you resourced appropriately to do that?"
Adams added the venture community was showing a greater interest in corporates, but he said this should be of a long term nature. He said: "It is interesting as the venture capital industry’s own funding has been squeezed they suddenly want to embrace corporates as their best friends to develop some of their companies. It is important for venture firms to have a reputation as a company which is going to stick with other companies as a true partner, in the financial world, as we need both these models."
He also said: "It is hard to build a CVC team which can sustain over time. There are issues with both pulling in people from outside the company, and recruiting people progress up a corporate doing a number of different things. Corporate venturing needs to demonstrate staying power. How do you manage bringing in venture veterans inside the corporate, and often do not understand the culture and mentality of the corporate. It is a real challenge. One, I would say I never solved."