People in Silicon Valley can broadly be divided into those who use money as a way of gauging their status and sense of personal accomplishments and those who value the views of their peers as well as the advantages money can bring.
Claudia Fan Munce, managing director of IBM Venture Capital Group since 2004 and vice-president of IBM Corporate Development, at her retirement at the end of January chose the latter route.
At the Global Corporate Venturing & Innovation (GCVI) Summit in Sonoma, California, last week she said the high point after a 30-year career was the unanimous vote by corporate venturing peers to select her to join the US trade body National Venture Capital Association’s main board as its first non-independent VC representative.
Fan Munce has been a pioneer in multiple other ways, including now being the first female venture adviser to storied VC firm New Enterprise Associates (NEA) and board director of listed corporations, such as BNP Paribas’ Bank of the West, but it is her legacy to the corporate venturing industry, in part reflected through this unanimous vote on to the NVCA’s board, that could perhaps last longest.
With Fan Munce’s retirement coming coincidentally around the time of changes for other senior industry figures, including Nagraj Kashyap moving to Microsoft from Qualcomm and Arvind Sodhani retiring from Intel Capital to be replaced by Wendell Brooks, it creates an opportunity to look at the skill sets required for the industry’s top jobs.
Effectively, there are three main routes to the top:
- Promotion or switching by corporate venture capitalists (the route chosen by Microsoft in hiring Kashyap and Qualcomm in promoting its US ventures head, Quinn Li – both spoke at the GCVI Summit).
- Transfer of a star manager from another division in the corporation (the decision by Intel to add venturing to its mergers and acquisition leader, Brooks, another speaker from GCVI Summit’s first day – report here).
- External hire of someone with complementary skills, such as a leading venture capitalist.
Sue Siegel, CEO of GE Ventures since its formation three years ago, is one such star who has shown how effective this route from independent VC (in her case Mohr Davidow Ventures) to corporate venturing boss can be. Siegel has joined Fan Munce on the NVCA’s board and built a powerful team and developed a platform for cultural change inside the organisation and external perception for the parent. (See her speech at the GCV Rising Stars dinner here.)
Each corporation will choose a leader who offers the broad skill sets needed to run a leading venturing unit as well as meets their own cultural and strategic imperatives for change or stability.
Promoting an established corporate venturing leader indicates a need for continuity after witnessing impressive success, while hiring-in an experienced manager offers faster delivery of industry best practices and experience.
For drop-in corporate executives, their gravitas and insider experience can translate to a more powerful positioning of corporate venturing in a company’s strategic thinking and requires an established, highly-effective team and infrastructure to work well.
But tapping outside VCs for the top corporate venturing role requires deft handling by senior management for a message that change in the organisation could be coming. The corporate CEO and their executives need also to show strong support for building a team able to challenge accepted wisdom and build a brand able to encourage the best entrepreneurs and investors to want to work with them.
Given IBM has just reported 15 successive quarters of falling revenues, it could be choosing an outsider VC might be logical, although no announcement of a replacement of Fan Munce has been made so we shall see who takes on one of the high-profile and most significant jobs in finance.
The bigger perspective is that any of these choices indicates how far the industry has come. While the number of VC firms continues to shrink, there has continued to be an increase in corporate venturing units formed.
The discussion at the GCVI Summit last week was less about what advantages corporate venturing had compared to other venture investors or whether they can help the parents’ strategic and financial goals. Instead, it was more about how to position this message and take full responsibility for building an industry that could take its rightful place among the mainstream jobs, such as chief financial or marketing or research officer.
That IBM can choose from these three broad options to replace Fan Munce, who will continue as an adviser to the company, is a signal of how far the industry has moved since she helped found IBM Venture Capital in 2000. How far her successor succeeds in taking the whole industry to its potential standing among entrepreneurs, other venture investors and corporate hierarchy will be the new manager’s legacy.
For more on Fan Munce’s legacy her GCV Powerlist profile is here and the exclusive on her retirement is here.