Thank you James, Toby, and to the entire Global Corporate Venturing (GCV) team, with a particular shout out to Christina Riboldi, for pulling off what appears to be a tremendous gathering, chock full of wonderful content that we’ll get to learn from over the next couple of days. It’s a great chance to network, learn the latest trends in corporate venture capital(CVC), pick up on some of the best practices on how to solve our collective and individual challenges, hear about the latest and hottest deals and, not to mention, get to see old friends. This type of conference, and all that it stimulates around it is why we, at GE, enjoy working with GCV.
CVCs have become a larger, more influential and important player in the entrepreneurial ecosystem over the last five years. Last year was quite a year for CVCs…you all have heard the numbers: corporate venture investment hit a 15-year high in 2015. In 2015, CVC groups deployed more than $7.5bn to the [US] startup ecosystem through our collective participation in 905 deals, accounting for 13% of all venture capital dollars deployed and participating in 21% of all venture capital deals, according to US trade body National Venture Capital Association (NVCA).
CVCs have arrived, we are participating throughout the funding spectrum from seed to IPO, we are being invited into the most elite of syndicates (and much earlier in the equation) and now the experienced entrepreneurs seek us out instead of just looking to the financial VCs.
With the explosion of CVCs, we share a collective responsibility. We need to be mindful of our role in the innovation ecosystem, a role we all claim that brings more than just money. Our actions need to back up our claims. We must continue to drive towards thinking “what can I/my company do to make these startups successful” vs “what can this startup do for me”. I realise that his sounds motherhood and apple pie, but by behaving consistently with our claims, all boats rise in our CVC segment and we will become a preferred and sought after partner to startups and VC firms alike. So, this means our individual behaviours will be important to our collective CVC brand. Let’s continue to demonstrate to both financial VCs and to entrepreneurs alike that we do as we say…that we deliver.
The EDGE programme is a clear example of how GE is making this ambition a reality. EDGE was created to support our portfolio companies through what we can bring to their growth and development by providing access to our research and development (R&D) experts, our distribution channels, our worldwide footprint and our regulatory and policy expertise. We have really fueled this effort by also offering leadership educational programmes at our Crotonville campus, with curriculum ranging from leadership skills, hiring to marketing, and the art of storytelling, geared at enhancing entrepreneurs’ development.
I believe our benefit to our respective corporations go beyond investing and can be seen in the strategic returns we generate. Our efforts bring optionality to our parent company in seeing the future through the entrepreneurs’ lens, learning new business models and how they complement new technologies to create value, and de-risking corporate strategic learning by being able to do so with best in class VCs and entrepreneurs, while leveraging OPM [other people’s money] and driving financial returns.
GE has given us, the GE Ventures team, a chance. We started in 2013, so we are still under three years old. We had to earn our place in the fabric of the company, and we have to keep doing that every day. Starting a VC discipline is tough as we are a cost centre versus a profit centre during the early days when your portfolio is in the J curve. During that time, it is especially important to prove your value beyond financial returns. Despite showing very strong IRR [internal rate of return] in these early days, we charted a path to bring strategic returns to GE. We do this by creating new startups through our New Business Creation discipline. We have done it through Licensing, where we create value from our IP [intellectual property] and technology transfer efforts beyond royalties by activating relationships that become longer-term partners for the innovation ecosystem. We earn our stripes by being engaged in corporate strategy for our business units, educating on new business models, emerging technology trends, and working to always sense emerging trends. We have helped do this through the infusion of talent from the VC and entrepreneurial world. These are among a few things that we have done and yet there is much more to do both internally and externally.
We are delighted to sponsor the Rising Stars dinner for the Global Corporate Venturing and Innovation Summit. Supporting this ecosystem is vital to our collective success. By doing so we allow networks to form and flourish, allow for cross fertilisation and best practice learning.
We are all on this continuous learning journey and that is why we’re so pleased to support GCV. The evolution of an ecosystem depends on having a thriving next generation. We need to foment the innovation catalyzers. This is vital to our continued success.
It is an exciting time for the CVC world …it feels that our collective has arrived! Our efforts are so important to our parent companies who recognise that they can’t innovate alone and that they will find many answers amongst the entrepreneurial innovation community. They realise the value of having the discipline of corporate venture helping to drive corporate growth for stakeholders: shareholders, employees, and the entrepreneurial ecosystem.
Thank you to the GCV for this excellent gathering.