In large technology corporations where managers can lead divisons of more than 50,000 people, being in charge of a corporate venturing or wider innovation unit of a few dozen people (usually) can seem a bit of a backwater to those swayed by sheer numbers.
But the role of leading a corporate venturing team is a challenging one and, once aims and strategies are set, the hardest task is, unsurprisingly, finding talented people and building a group of complementary skill sets.
The important blend is between those with domain expertise in specific areas and often strong internal connections with business units and those with perhaps more deal-making exposure.
But whether the deal makers should have gained their experience from venture capital firms or other corporate venturing units is also an interesting perspective – and one made more critical as a wave of talented VCs emerge from the collapsing VC industry in the US and Europe as dot.com vintage firms finally implode.
One former head of a large corporate venturing unit that set up the team and grew it for nearly a decade, said: “I think CVC experience is more useful than straight VCs as it is a very different beast.”
But having deal making experience is important. The former head said: “[We] started out as two to four people in my team which then grew to 12+ in the venture group supported by many more in my business and beyond.
“We mostly recruited internally as opposed to bringing in experienced professionals. In retrospect that would have been useful to have one to two folk with experience and the scars to prove it, although you always need the deep internal connectivity.”
Qualcomm Ventures, the corporate venturing unit of US-listed technology company Qualcomm, has certainly applied these insights from its own experience rather than from the above interviewee.
Its three latest hires have all deep business domain expertise and in Carlos Kokron and Gareth Keane have picked up investors with considerable experience and potential.
Other firms have looked at the extraordinary talent emerging from VCs to bolster their ranks. Japan-based drugs company Takeda snapped up Ilan Zipkin, former chief executive of venture capital firm Prospect Ventures, which is managing out its first three funds with an aggregate $1.5bn under management rather than looking to raise a new vehicle following the death of co-founder Alex Barkas.
Dell reopened its corporate venturing unit by hiring Jim Lussier from VC firm Norwest and he promptly set up a venture debt fund to back deals done by VC firms without causing trouble by diluting their stakes.
(Venture debt is increasingly popular among VCs to fund portfolio companies without needing to reveal down rounds or just as a way of providing lucrative returns with a claim on assets especially when underlying limited partners receive tax breaks to juice their overall returns – yet another unintended consequence of government policies.)
So, while trade bodies, such as the US’s National Venture Capital Association might hope talent will recycle from VCs to corporate venturing units, the overall shift in personnel might not be as large as anticipated but for experienced corporate venturers their talents will be increasingly in demand as the wave of new units being formed continues to increase, thereby allowing them to drive better terms and power even in well-manned corporations.