It is over six years ago since I interviewed you for this column when you were leading Dow Chemical’s corporate venturing arm. It would be great to get an update now on your role in UK Trade & Investment (UKTI).
It is hard to believe it was six years ago. I started running Dow’s corporate VC in Europe in 1996. So after 16 years of doing that I moved on, and in the last two or two and a half years, I have had a role advising the venture capital unit within UKTI. That unit serves to connect corporate VCs and VC funds from around the world with UK companies that fit the investment profile of those particular investors.
My role is particularly working with the corporates, many of whom I have known for many years, really understanding what they are looking for and then selectively introducing them to UK companies.
What are the key technology and new business models corporates and VCs are now investing in and developing?
Apart from making one-on-one introductions, one of the things we do is run showcases – pitching events – where we choose a specific sector we know is of particular interest to corporate VCs. We select 10 of the best UK companies in that sector to pitch to a room full of corporate VCs and VC funds that we invite along. We run the showcases jointly with Silicon Valley Bank.
The sectors we have chosen for those showcases really reflect areas that are of strongest interest. So we did one on digital health, we did one on cybersecurity, and we did one on the internet of things. The next one, coming up in late March, is on smart retail. I just sent out the invitations to the corporate VCs and VC funds in our network to that event.
The development of corporate VC is another thing I would highlight, the growth not only in quantity – I think there are over 1,500 corporate VC units around the world now – but also the geographic spread and the improvement in the quality and the sophistication of corporate VCs. That is really something that has changed, I think, certainly in these last six years.
What better example could you get than one that was just announced, that one of the leading figures in corporate VC, Claudia Fan Munce from IBM, has been accepted on to the board of one of the leading independent VC funds, New Enterprise Associates in the US. That is a great reflection of the esteem in which leading corporate VC figures are held in the independent VC industry today.
How are you seeing the ecosystem change in terms of governments and the shift in that relationship?
What I do find, going to conferences and events, bumping into people from various governments around the world, is that there are different initiatives to try to stimulate investment, and in some cases specifically corporate venturing investment in those countries. I include New Zealand, Japan, France, Canada, the Netherlands and many others. There is a growing awareness among governments around the world that VC, and particularly corporate VC, is something that is probably worth their time and attention.
I don’t know anybody else with a model similar to the UKTI venture capital unit, but certainly I think the awareness and the importance of corporate VC is being recognised on a very broad, global scale.
What other types of partners do you work with, apart from VCs?
Our role is to work with investors and understand what they are looking for and then connect them with UK companies.
There are two groups of external people that we like to work with – first, people who can help us connect with additional investors around the world. I would include organisations in that group, such as the UKTI offices. UKTI has hundreds of offices in consulates and embassies around the world, so we work with those people, but also organisations, such as Global Corporate Venturing, that are very well connected with the investor ecosystem.
Second, we work with organisations in the UK that can help us connect to UK companies looking for funding. I would include incubators and accelerators in that, UKTI sector colleagues, who have specific sector expertise and contacts with companies in those sectors, and also UK venture capital funds.
What types of people will they be interacting with in the UKTI teams?
It is an interesting structure, because this is a very, very small, specialised team. On the one hand you have the civil servants, notably Aekta Patel, who heads the venture capital unit. She is responsible for ensuring that we have the support internally, really setting direction and strategy and making sure there is budget available for this activity.
Then the external facing work is mainly done by people with very deep and long and relevant industry experience. So I lead the interactions with investors on a global basis, and then some colleagues on the ground in the UK are experts and very well networked in their own sectors. They are the ones who identify the companies we then look to support, by introducing them to investors. That small, specialised team is led by one of my colleagues, Roy Williamson.
You have provided some great insights in the GCV Academy, on the best approaches and pitfalls of corporate partners working with VCs. What are your key messages?
From everything I have seen and the feedback that we have had from the academy programs that we have run in the US, Europe and China, I would say “attend it” would be one of the key messages, because I think people get a lot out of it.
From my particular perspective, the module that I cover is really to raise the awareness with corporate VCs of the importance of having a well-thought-through and well-defined engagement strategy for independent VC funds.
That may or may not involve taking limited partner or general partner positions, but even if it does not, rather than just stumbling across VC funds in an ad hoc way, as and when they happen to invest in a deal with you or be looking at a deal, I think you should have a well-considered engagement strategy. You will find that that can be very beneficial for a number of reasons that we cover in the course.
Can you describe an example of a CVC fund that is located in the UK and how it is effectively leveraging the ecosystem?
We are working with over 100 corporate VCs globally, and of course that is an awful lot of contacts. So we try to focus, putting some extra time and effort into a small number that we think really have the greatest potential – both a desire and the ability to invest in the UK. Where those corporates are, say, North America-based or Asia-based, we encourage them to come and set up a base in Europe, obviously in the UK, to set up a fund there or at least an office.
One of the examples that we have worked on for the past couple of years, and there was a big announcement following a meeting at 10 Downing Street with the prime minister and other officials, was the setting up of a new fund by Cisco. In fact Cisco has committed $1bn to invest in the UK and $150m specifically in a corporate VC fund to invest in UK startups. So we were very, very pleased to see that.
What do you do to relax?
What I would like to do and what I am doing are different things. A lot of my way of relaxing and just getting away from everything, all my life really, has been sport. I played a lot of rugby and cricket and more recently cycling and a lot skiing as well. I am a little bit incapacitated recently following a hip operation, but as and when I get that sorted out I shall be back to my regular activities.