The first session on the second day of 2019’s Global Corporate Venturing Symposium was moderated by Josemaria Siota, director of research at the Spain-based IESE Business School, who referred to an article he had written detailing the seven lies of corporate venturing.
Julie Kainz, an investor at Salesforce Ventures, enterprise software producer Salesforce’s corporate venture capital (CVC) unit, and Marc Rennard, president of Orange Digital Ventures, telecommunications firm Orange’s investment arm, discussed the points.
When asked how a CVC unit can be effectively aligned with its parent company, Rennard said Orange is large enough that it can be complex to manage Orange Digital Ventures, but affirmed the unit’s aim is to help startups scale and gain visibility, both internally and externally.
Salesforce Ventures launched a $125m vehicle called Europe Trailblazer Fund today, having already invested in approximately 50 startups across the continent.
Siota then enquired about how CVC units manage their autonomy. Kainz said that because customer success was the main concern for both Salesforce and Salesforce Ventures, having a common goal helped the unit “know our position as a venture fund”.
Rennard said Orange Digital Ventures was in a similar position. It moved its operations to a dedicated investment committee and has total freedom to select investments without reporting to the group’s chief executive, meaning it has no business conflict with Orange as a result.
“The main point is to establish and support the startups and form relationships with entrepreneurs,” Rennard said. “We are not forced to invest in companies just because of commercial relationships with Orange.”
Siota asked for suggestions to integrate a unit’s portfolio companies with the parent. Rennard said: “As small startups want to act faster than the big corporate, we need to reconcile these two kinds of approach.
“CVC’s role is to facilitate the relationship between the startups and the large group,” he explained, and communicating regularly with the group CEO and business units was crucial.
Kainz added: “Because we are a platform business, it is easier to connect with startups from a technology standpoint,” adding that feedback from the senior level was especially valuable in the due diligence stage and on the technical side.
“When we make an investment, there is a venture partner that is not from the investment industry but from the parent company, so he or she knows how the products should work and whether or not to go for it,” Kainz said.
Rennard added: “We have someone who simplifies the term sheet. It is not easy to do, but we try,” and pointed out the importance of having one decision-making process in the investment committee. “If startups lose time because of you, you also lose value.”
Kainz agreed and recommended forming a clear CVC strategy to accelerate the process, while Rennard urged that focus should be on people instead of Excel sheets, saying the earlier the stage, the more important a factor people are, so that is where time should be spent.
