Change and churn are the order of the day in the expanding corporate venturing market place.
Global Corporate Venturing has documented the doubling of corporate venturing units since 2009 with the total of units now standing at more than 1100. The numbers for investment are also on the rise, so far this year globally there have been 1164 corporate venturing-backed investments worth $30.5bn. There were 1089 investments in corporate-backed VC deals worth $16.7bn in the full year 2013. In 2012 there were 1,067 investments worth $18.6bn.
With such a sharp growth curve, the industry needs best practices, and for this reason we have started our GCV Academy, run by Andrew Gaule.
People are the key resource to ensure that this wave of money is deployed effectively and it takes time to develop the capabilities and experience. With the average lifespan of a CVC unit estimated at 3.8 years by Gary Dushnitsky of London Business School, it does not give a lot of time for teams to build the experience to do what is not a normal role in a corporate developing and running a CVC unit.
By definition the role and capabilities are not what the core organisation does as venturing looks for new technologies, different business models and explores partnerships. It is a very expensive programme to learn on the job as they deploy millions of dollars / pounds / euros etc. Intel has had the scale and sophistication to measure the effectiveness of their investment managers and they have the data to conclude that it takes a number of years for them to become effective.
The GCV guides to CVC (101, 201, 301) provide some introduction to areas that need to be considered, but the approach which you need to take does not have a ‘best practice’ or DIY guide. Ongoing sharing of experience in forums such as the Symposium, the IBF conference in Newport Beach Corven Networks and national venture capital associations and the Corporate Venture and Innovation Initiative, a network of service providers of which we are part, provides some ongoing support. Yet the need for a coherent capability programme to help executives develop their knowledge of CVC strategic and financial objectives, variety of venturing processes, governance, people skills, partnering and measuring performance needs to be enhanced.
This has been supported in a survey (www.surveymonkey.com/s/7MFRYCK) and interviews done with leading corporate venturing executives for GCV. This has now led to the industy’s first coherent approach to developing capabilities in the GCV Academy. The needs for capability development are not just about doing an investment transaction and exit but cover the broader corporate objectives and interaction with the core business.
The business may say, but what if we train the CV team and they leave? The more challenging issue is if the team stay and learn on the job in the very expensive use of investment money and time.
Our fundamentals of CVC programmes are scheduled for London (23 and 24 October), Shanghai (25 and 26 November) and Silicon Valley (February) with additional dates and advanced programmes being developed.