Corporate investment teams come in all sizes, from one-person-bands to teams of more than 50 people. With nearly three thousand corporations having done at least one minority investment in 2021, there is a huge amount of variety in the space. But what size is most effective? Is there such a thing as too large or too small, when it comes to corporate venture?
GCV subscribers can also take a deeper dive into these case studies of different-sized teams:
- Capita Scaling Partner (big team)
- Saint-Gobain NOVA (medium-sized)
- TDK Ventures (small but growing)
- Prologis Ventures (very lean)
“There is no ‘one size fits all’,” says David “Dede” Goldschmidt, managing director and head of the Samsung Catalyst Fund, which has a team of nine.
“Obviously, a key parameter is size of targeted portfolio, and pace of investments (new or follow-ons). But not less important is the investment strategy and portfolio management approach – purely strategic motivations? Financial? Is there a separate team working on business units’ engagement or does the investment team drive that (which I personally think to be better)? How actively is the team supporting the portfolio (as some VCs would do) vs. hands off?”
It depends on the innovation mandate
An example of a medium-sized corporate venturing unit is Evonik Venture Capital, the investment arm of chemical company Evonik Industries.
“The Evonik Venture Capital team consists of 16 investment professionals in Germany, China, North America and Israel,” says Bernhard Mohr, managing director. “We are currently recruiting two additional team members to complement our new sustainability tech fund, which will then adequately reflect the size of our overall fund and ensure that we can achieve our financial and strategic goals.”
“Resources allocated to meet investment mandates[are]…similar to those of financial VCs. However, resources allocated to meet innovation mandates vary a lot.”
Tianyi (tony) sun, GC Ventures America
Evonik’s chemical industry peer, GC International, on the other hand, has a team of just six, although it also has a global and strategic mandate. The venturing team scouts for disruptive technology and identifies new investment opportunities for the mothership via two CVC arms: GC Ventures and GC Ventures America.
Tianyi (Tony) Sun is the director of corporate venture capital for GC Ventures America. He heads a team of three full-time employees in addition to temporarily roles, such as interns and secondees, covering North America. The other three members of the venturing team (GC Ventures) are based in Bangkok, where the corporate mothership is headquartered, covering Asia and Europe.
“I think the size of a CVC team fundamentally depends on two things – investment mandates and innovation mandates,” says Sun. “Resources allocated to meet investment mandates appear to be similar to those of financial VCs of similar fund size or stage. However, resources allocated to meet innovation mandates vary a lot from one company to another — we have seen team sizes both very big (a complete business development function) and very small (e.g., only minimal tech scouting).”
And the age of your fund
The size of a corporate venturing team tends to evolve over time. This is most evident in the case of more seasoned corporate venturing funds. Chevron Technology Ventures (CTV) has been around since 1997, making it one of the oldest standing CVCs in the industry. “We have two venture teams managing two groups of funds,” says Kemal Anbarci, managing director of CTV . “Each team has about eight investment professionals and both teams are supported by common investment committee and back office, as well as much larger technology validation and deployment groups in CTV.”
“I do not think there is one ideal size that fits all groups strategy and process,” Anbarci says. ”The ideal size of a VC or CVC team depends on the process of decision-making, volume of deal flow and investments as well as current portfolio size and back office support. The experience level of investment professionals is also a factor in the total group size.”
“I would say at least 3 people per $100m – one senior and two juniors.”
Girish Nadkarni
Girish Nadkarni, who has been head of two corporate venturing units – ABB Technology Ventures and TotalEnergies Ventures – agrees: “The team size is a dynamic issue. It is linked to many issues such as the size of the fund, the geographic foot, the size of the portfolio and whether or not the CVC wants a dedicated team to do business development and support its portfolio companies.“
He does offer a rule of thumb, however. “I would say at least 3 people per $100m – one senior and two juniors,” he says.
“If you are planning to make three to four investments a year, you will need two to four people to start.”
Michael Young, Caterpillar ventures
Michael Young, director of Caterpillar Ventures, the venturing subsidiary of machinery maker Caterpillar, also provides a more specific piece of advice to newcomers who may consider setting up venturing team: “If you are planning to make three to four investments a year, you will need two to four people to start but will need to scale as the number of investments as well as active portfolio companies grows.”
How very small teams work
The corporate venture team at vehicle parts manufacturer Denso is a good example of a lean team. Tony Cannestra, director of the unit, explains how just four members manage to cover a lot of strategic and geographic ground: “Three of those members are based in Denso’s Silicon Valley office and one is based in Denso’s Japan headquarters.” According to PitchBook and GCV´s own data, the unit tends to make two to three investments per year.
Even smaller venturing units are feasible. The venturing team at SEI Investments, the investment management company, started as a one-person operation, growing to three people today, plus a programme manager (Jennifer Ciotti) who is responsible for the onboarding of portfolio companies with the corporate parent.
Russ Kliman, the global leader of SEI Ventures, says: “The team needs to be right-sized to your strategy, thesis and deal pace. Initially our team started small, with the strengths and skills aligned to understanding our parent company, strategic growth opportunities and the ecosystem of clients we serve. From there, we have begun to add scale with team members focused on deal flow and analysis.”
To get more of a sense of how different team sizes work in practice, we’ve taken a deep dive into four units from different industries with very different team sizes and investment mandates:
