Rising Stars – on the cusp of great things

Researching, selecting and writing the Global Corporate Venturing Rising Stars 2018 list has been another fascinating and inspiring dive into the wealth of talent tackling probably the hardest job in finance.

Mauro D’Amato, director at Intel Capital chosen by the chipmaker’s corporate venturing president, Wendell Brooks, as a GCV Rising Star 2018, asked a smart question when told he had been nominated: “What are the common factors that make a Rising Star?”

For the literalists, US space agency Nasa says a star is usually formed by recycled dust and debris left behind by novae and supernovae blending with the surrounding interstellar gas and dust.

But, for these GCV Rising Stars, a look through the hundreds of people nominated by their bosses over the past three years and it is hard to see an immediate pattern.

While most have post-graduate qualifications and many are domain experts in their subject, they seem to have varied backgrounds often covering the full sweep from corporate experience, startups and previous venture investing experience. There is one who ran nuclear submarines for the US Navy, alpine skiers and another who is in the Guinness Book of Records.

There is also almost equal gender balance, even if fewer than a fifth of their heads of corporate venturing units are women.

They are, however, all seemingly destined for further success. As Skyler Fernandes, then head of Simon Ventures before being poached to be managing director of investors at Cleveland Avenue in Chicago, US, said in the inaugural Rising Stars nomination process: “Natalie [Hwang] was screened out of 546 candidates, and I was impressed by her knowledge of the space and background in investing as an angel. She also has a high degree of intellectual curiosity.”

She stepped up after Fernandes’s departure and now runs Simon Ventures as probably the youngest person in the country to run a corporate venturing group for a Standard & Poor’s 100 company, and kindly shared her insights at a fireside chat at our Global Corporate Venturing Synergize conference in New York in October.

Ten of the initial top 20 in 2016’s inaugural list, including – just from that year’s top 10 ranking – Lisa Lambert from Intel Capital to managing partner at Westly Group, Jack Young from Qualcomm to head the US ventures team at Deutsche Telekom, Vanessa Colella to chief innovation officer at Citi, Rowan Chapman from GE Ventures to head of Johnson & Johnson Innovation in California, Eileen Tanghal from Arm to partner at In-Q-Tel, Nobuyuki Akimoto from NTT to managing partner at Translink Capital and Ray Schuder to overall head at Hewlett Packard Ventures, have been promoted or now run independent firms.

Another 29 from the remaining 80 have done the same, including Grant Allen to overall head of ABB Technology Ventures, Mariano Amartino shifting from Telefonica to Microsoft as Latin America startups director, Luis Arbulu from Samsung to Xertica and Olawale Ayeni from Orange to International Finance Corporation – and that is just the As in the alphabetical order from 2016.

But to go back to the Fernandes’ original recommendation and the curiosity allied to knowledge pops out as a key factor for why they were chosen and have done so well.

When John Doherty, head of Verizon Ventures and a member of the GCV Powerlist 2017, nominated Merav Rotem Naaman, managing director at Verizon Ventures Israel, for this year’s Rising Stars awards it was only a few months after Verizon had acquired AOL and she and her team at its Nautilus corporate venturing unit had been formally integrated.

And it is worth quoting Rotem Naaman’s thoughts about why she had done well at some length: “There are many reasons why Israel has become ‘the Startup Nation’ – a small country that is virtually an island, where the vast majority of the population are recent immigrants, where 18-year-old kids have to serve in the military and take on responsibilities that for most people take decades.

“I grew up in this environment idolising my parents, grandparents and the other pioneers who lost everything in the World Wars and came to Israel to rebuild their lives and a new home. Asking questions and trying and failing were the norms; entrepreneurship was everywhere and in everything. And in me.

“From a very early age I was determined to create my own path, to define my own destiny and to take advantage of the opportunities that life presented, which were not necessarily part of what being raised as a female in a small orthodox community expected of me.

“So I left my community, first to serve in the military and then to attend university where I studied law. During my studies I took a year off to hike across South America and came back smarter, stronger, more open minded and with the courage to take big risks.

“I have brought this to my career where I challenged myself to take on the tough jobs and make big moves, from leaving a successful legal career in Israel to attend Harvard Business School, to starting Nautilus, AOL’s investment arm in Israel, and now leading Verizon Ventures’ first investment group that’s located outside the US.

“My success is also rooted in the people that I surround myself with both at work and in my personal life. Good teams, happy teams, diverse teams along with my vibrant family and friends are the fuel that keeps me going.”

This might help explain why Israelis appears the most overrepresented by number of Rising Stars as a proportion of population but success comes from the environment – what Nasa called blending – and people that surround the star.

In answer to D’Amato, then, whose own history of moving from Italy to the US with his entrepreneurial parents is impressive, I said the defining criteria that seemed to connect the Rising Stars seemed to be their strong ability to connect and manage the challenge of dealing with entrepreneurs and their myriad wants, foibles and worries. All venture investors have to do this but for corporate venturers there is also the seemingly ever-changing requirements of the parent providing the money though senior executive and strategy upheaval.

The empathy, or high so-called emotional quotient, and communication skills metaphorically to kiss all the frogs among the entrepreneurs to find those capable of transmuting into unicorns – private companies worth at least $1bn – tackle the inevitable politics at the corporate venturing unit itself, and manage the often vast, sprawling and inward-looking business units at the parent as well as senior C-suite executives sitting in judgement on investment committees or deciding whether to continue funding versus other priorities.

This challenge is why, for his Rising Stars profile, Pär Lange, founding partner at phone operator Swisscom Ventures, summed it up for many: “I think Swisscom Ventures itself is my biggest success. While many other CVCs have been victims of reorganisations and strategy changes, we have managed to develop and improve our model continuously over the last 10 years without any disruption.

“The fact that we have brought strategic value to Swisscom in combination with having a portfolio with good returns has been key to our success.”

Getting the combination right is hard. And it never goes away as groups, such as Naspers, have shown from its initial challenges in the 1990s to acquiring a third of China’s now-largest internet company, Tencent, around the start of the millennium. Tencent now has a market capitalisation of more than $500bn and Naspers, without selling a share, still owns nearly a third of what it calls “its associate” – correctly reflecting the changing dynamics of its partnership over the past near two decades.

Jeffrey Li, managing partner at Tencent Investment, who was ranked first in the GCV Powerlist in May and who collected the Unit of the Year award at the GCV Asia Congress in October in Hong Kong, in his fireside chat moderated by Gloria Liu, partner at law firm DLA Piper, said: “For the past six years we have been reinvesting our profits back to venture while other corporations focus on M&A. We do do that but it is a small part compared with lots of minority deals, such as Didi Chuxing, 58 and Meituan, from our 50-strong team, which is still growing.”

As well as individual excellence, as Rotem Naaman described of her own background, those you surround yourself with and the ambitions set by the corporate venturing leaders is an additional weighting. In-Q-Tel, which was included for the first time this year after a decision by the GCV Leadership Society advisory board chairman, Claudia Fan Munce, is potentially the most active strategic investor in the world with more than 50 new deals a year. When its managing partner, George Hoyem, who is highly regarded as a thought-leader and experienced venture investor nominates someone, in this year’s list, Katie Gray, it counts.

Similarly, Tencent’s Li nomination of Levin Yao for his “tons of deal experience” or when Sue Siegel, chief innovation officer at GE and CEO of GE Ventures, writes to say someone is “a model for CVC and its important role in creating value for corporates in ways beyond corporate R&D or M&A” it is an important validation.

Some take the opposite approach. SoftBank’s newly-appointed external public relations representative, Richard Appleton, said the whole team at its near-$100bn Vision Fund would effectively take offence and boycott Global Corporate Venturing if any were described as Rising Stars as they had all obviously reached the top by joining the corporate venturing unit in the first place. And so, despite their activity, brilliant people and exciting investment theses and operations at SoftBank, none made the GCV Rising Stars 2018 list as the industry is built on inclusion rather than rejection and division.

Such a response does also point to a potential challenge for the industry as it grows, hubris, which tends to be followed by nemesis. The approach of Naspers and its collaboration and association with Tencent and other investee companies is probably an exemplar of what can be achieved and in leaders such as Charles Searle and Larry Illg at Naspers and James Mitchell and Jeffrey Li at Tencent, there is a recognition of what partnership can bring.

The same pattern is now flowing through Tencent portfolio companies Didi Chuxing, Meituan-Dianping, JD and 58 and their investments, whose stars all made this year’s top 25. For Didi’s growth has been built on a clear corporate venturing strategy set by Jean Liu (GCV Powerlist 2017 winner) and Stephen Zhu, who is ranked first in this year’s GCV Rising Stars list, and execution of this tool in its local and global expansion.

Above: This year’s winner Stephen Zhu, Didi Chuxing

Time and again, the Rising Stars profiled in this and previous lists have identified the opportunities for sharing deals with their corporate venturing peers, the importance of transparency on their own strategic or financial goals and sharing best practices with each other and finding role models to show to entrepreneurs and other venture capitalists.

The fifth point the Rising Stars identified, highlighted again this year as in previous years as well as by the members of the Global Corporate Venturing Leadership Society luminaries, was to put entrepreneurs first.

The industry is a service provider between them and the corporations. While learning how to deal with both can seem more of an art than a science and best learned through experience there is a role for mentoring and giving back to the next generation of stars.

In this, as ever, we are grateful for the leaders who give up their time at the GCV Academy and in the mentoring programs run at the GCVI Summit and beyond to advise and train those whose reputations will help make the industry reach further heights.

Such mentoring by today’s leaders of tomorrow’s stars is part of a desire to leave the world in a better shape then you find it. Judging by the GCV Rising Stars 2018 list, therefore, the future still looks bright.