Scott Herren, chief financial officer of networking equipment manufacturer Cisco, said: “Derek’s extensive experience in venture capital and investment banking, combined with his natural leadership abilities makes him a truly unique investor and the ideal leader of Cisco’s corporate development and investments team.
“As a company, we have a long tradition of fostering and capturing innovation through investments and acquisitions. It is Derek and his team who play the critical role of anticipating market transitions and partnering with innovative, emerging technology companies. Over the last year alone, they led for more than 10 acquisitions and more than 30 strategic investments.”
1. Plans for the year ahead
For all of us, 2021 was a year of continued resilience, and we have started to see glimmers of hope. For us at Cisco Investments, we saw an increase in investments in specific vertical areas, including cybersecurity, collaboration, cloud, and more. Also, we focused our efforts on further building our diversity and inclusion efforts to drive greater diversity and innovation in the technology ecosystem.
Looking ahead to next year, we are hopeful and cautiously optimistic to see the world around us improve. From an investment standpoint, we will continue to focus our efforts on making strategic investments and acquisitions in critical vertical areas such as collaboration, cybersecurity, cloud and computing, and more. Furthermore, we will be making regular announcements around our diversity and inclusion efforts, including investing in venture funds and startups with diverse leadership teams. Our goal is to help support and accelerate innovation through diversity and inclusion.
2. Milestones achieved at your unit
Outside of our investments and acquisition activity, one major milestone for our team in 2020 is how we came together following the global protests around racial inequality and social injustice, unleashing emotions in all of us. Almost immediately, we kicked off a Corporate Development Diversity Initiative working group that comprised 25 individuals, representing more than half of our team. As a result, we created a set of four initiatives uniquely tailored to our capabilities and passions.
We launched a Cisco Investments venture capital fund called the Aspire Fund, publicly committing $50m over the next five years to invest in diversity-led startups and venture funds. We engaged dozens of our portfolio companies to track diversity and inclusion metrics on a regular basis and utilize the full force of Cisco to help these startups improve their metrics.
We launched an MBA internship programme for this coming summer of 2021 for diverse, high potential students. Last, we created a stretch assignments program for diverse individuals to target career growth and engage directly with our Corporate Development team. From that experience, I learned that while our voices can be powerful, greater change happens when we are able to make a hire or write a cheque.
3. Pain points and opportunities you have encountered in corporate venturing
The shift to remote work: If resilience is defined as being adaptable and flexible in the face of change, I cannot think of a better example than how our Cisco M&A and Investments team, hardened over 25 years of in-person deal-making, had to rethink every aspect of acquisitions and divestitures to rewrite our playbook on how deals get done in a 100% virtual environment.
4. What do you think all corporations could do better to make it a stronger industry?
Every corporate venture arm has its own perspective on investing that works for them and strengthen the investment and technology industries. Cisco believes in taking a strategic and collaborative approach to supporting the next generation of technology companies.
Our Corporate Development and Investments team comprises teams focused on specific domains that partner with each business unit to identify and invest in startups that we feel make sense strategically – innovation-wise, geographically, and more. The close collaboration between our team and the business units has helped us make investments that make sense for both the portfolio company and Cisco to grow our respective businesses.
Furthermore, when we invest in a startup, we not only provide monetary investment, but we also become a growth partner for them. Cisco Investment’s portfolio companies are given access to our company’s ecosystem to grow their business and further develop their product offerings. Startups are given access to build relationships with key audiences including, sales (accelerate GTM), business unit teams to build partnerships and product integrations, even gain access to our customer and partner bases.
We at Cisco believe that a strategic approach that combines monetary investment and access to growth tools is an effective combination in nurturing the next generation of technology companies.
5. For colour, what did you do prior to your venture role or in your spare time?
Prior to joining Cisco, I was managing director of venture investment for Itochu Technology, the corporate venture capital arm of Itochu Corporation. During my tenure, I led IT investments for the company, including those related to communication, software, services, digital media and the internet.
Previously, I was vice-president of corporate development at Overture Services, where I was responsible for the company’s acquisition strategy before it was acquired by Yahoo in 2003. A former venture associate with private equity firm Kline Hawkes & Co, I operated as an investment banker at Cowen after starting my M&A career with BancAmerica Securities.
I earned an MBA from the Anderson School at University of California (UC), Los Angeles, where I was also a venture fellow, and a bachelor’s degree in finance and marketing from UC Berkeley. In my spare time, I am a huge sports fan, especially the Giants and 49ers. I am also a father to two boys.
