Corporate investing is a profession that draws people in from a variety of backgrounds. Because it is a complex discipline, combining the need to understand startup ecosystems with the ability to manage internal corporate politics, there is a broad variety of people who can excel at it.
Every year when we review the nominees for our Rising Stars and Emerging Leaders lists, we are always amazed about the different paths that people have taken to get to their positions.
Sometimes corporate investors themselves are amazed to find themselves working in CVC.
“I never once thought I could be a VC. I come from the era where VCs were only men with MBAs that went to certain business schools,” says Ginger Rothrock, who started out as a biotech company cofounder before eventually joining — via some twists and turns — the team at HG Ventures.
Some, like Johnathan Stone, investment director at BP, have come into corporate venturing after spending many years at the parent company — in Stone’s case 18 years — bringing a deep corporate expertise and a strong network to the role.
One of the things that struck us this year with both the Rising Stars and Emerging Leaders lists was the number of nominees who were in the business development or “platform” role at their CVC units. This function of helping connect portfolio startups with the corporate business units to run joint projects, has become increasingly crucial over the past few years.
Being able to offer startups practical help — as a customer, or advising on how to scale up manufacturing, or even with operational things such as hiring and legal work — has become a real differentiator for corporate investors. Many corporate investors tell us that “anyone can write a cheque” but not every investor can help a fledgeling company with these practical issues.
This business development function has been growing in importance over the past two years, as the investment climate has grown frostier and startups have come under increased pressure to reach profitability.
The investors on the Rising Stars and Emerging Leaders lists represent the top level of the corporate venturing profession. Rising Stars tend to be those who have been five years or fewer in CVC but who are already making a mark. Emerging Leaders are those who have been in corporate venturing for more than five years. They may not yet be head of their units or teams but are on their way to be taking leading roles. They often have a unique approach or have already made a notable impact on their teams in some way.
We can categorise the corporate investors in our lists into six broad categories. Some might straddle several of these, but it is a helpful way of thinking about the different skillsets that are needed in CVC.
Which investor type do you fall into?
The “classic” VC investor
This type of investor usually has a strong finance background. A business school degree, a spell at a consultancy or an investment bank, possibly both, then a move into VC and finally a jump into working in corporate venture. They tend to be great at dealmaking and are masters of navigating the term sheets. They can be excellent at bringing VC rigour to corporate departments that may have been previously run an a more informal basis. But they can find the management of corporate stakeholders somewhat more challenging and must spend time building their networks in the company.
Jon Hennessy, senior associate at SE Ventures, is a good example of someone in this mould, with an MBA from the University of Michigan and an early career at an investment firm. An investor with this background is well matched with the aims of SE Ventures, which is set up like a financial VC firm from legal and compensation incentives and seeks to match the speed of startup founders.
The former founder
This investor has founded at least one company and has never lost the taste for the rollercoaster of startup life. Sometimes they have ended up at the corporate after their startup was acquired. Others might have gone through the painful closure of their business and then joined corporate life to pay the mortgage. Either way, they never lose their empathy for startups and their desire to help them.
Diane Frachon, principal at SLB New Energy Ventures, for example, is a former entrepreneur and has continued to volunteer as a pro-bono mentor at local incubators even while her career with SLB took her everywhere from Scotland to Egypt. Even now, based in London, she mentors startups at Imperial College. Joining the ventures team at SLB has been a great way to combine her former startup experience with what she has subsequently learned about running and financing energy projects.
The connector
This type of investor has spent a long time at the parent corporation, sometimes, like Jihad Salahhudin, director of Caterpillar Ventures, working in nearly every department over the course of a couple of decades. That gives them a powerful knowledge of exactly how things work, which doors to knock on and which levers to pull to get things done. These investors use their deep internal networks to get buy-in for startup collaboration projects that might otherwise not get off the ground. They may or may not have an MBA — but they know things about their corporation that no business school can teach.
Jennifer Crusca, operating principal at JetBlue Ventures, is a great example of this kind of investor. She has spent more than 20 years in the airline industry — 18 of those at JetBlue — and brings a strong internal network to the JetBlue Ventures team. That networking job never stops, says Crusca, even after all these years at the company.
“My day-to-day is connecting with individuals across the business to learn about and understand their pain points. My primary responsibility is to gain insight into their strategic needs,” she says.
The expert
This corporate investor has come to CVC after years as an engineer or running a laboratory, or after years in the field, getting their hands dirty. They are often found at corporate venturing units that invest in deep tech, where being able to evaluate the science and technology is crucial. These investors will often have a PhD as well as an MBA, and they can be a key differentiator for corporate venturing units compared to financial venture capital firms, which don’t necessarily have such a deep bench of sector experts in house.
Kevin Chen, head of Lam Capital, is a good example of this kind of investor. Chen has a PhD in electronic materials from MIT, and spent years working at optical networking companies and then the semiconductor industry before becoming an investor.
Chen says his background provides “an amazing opportunity to be able to take all the real-world experience that I have gained as an entrepreneur and as an executive across deeptech sectors, to really help the entrepreneurs we work with.”
The activist
This type of investor came into CVC to make a difference. They may have already been working at the corporation but sought out a CVC role because they wanted to bring about change. Many corporate investors in the energy sector fall into this category — they are keen to change the polluting industry from the inside and see investment in startups as a key way to do that. Johnathan Stone, for example, moved into corporate venture at BP after a personal realisation about the need to move more quickly on the energy transition.
These corporate investors are highly motivated to create change. The only downside is they can become frustrated if they see corporate bureaucracy moving too slowly — if companies are not careful, these investors can leave to join specialist climate or other impact funds instead.
Phoebe Wang, investment partner at Amazon Climate fund, is a good example of a corporate investor in this mould. She not only invests in sustainability startups to help Amazon accelerate its net zero transition, but she also heads the female founder initiative at Amazon, which pledges to invest $50m in women-founded and women-led climate tech companies. Wang is also an active member of the Global Corporate Venturing Sustainability Council.
The outsider
This type of investor comes from a very different field to the rest of the company or may have a wildly different background to the rest of the team. But it is exactly this new perspective and different experience that is helping to take the CVC team in a different direction. They are an excellent addition at companies that are trying to diversify or take the business into a very different direction.
Tanmay Bhargava at Telus Ventures is a good example of this type of investor. The self-described physics nerd runs the unit’s agtech practice, an area introduced after telecoms company Telus began offering digital technology to agribusinesses. Bhargava has an extensive background in agtech investing and also worked at Intello Labs, a startup focused on AI for agriculture.
Inga Grieger at BMW I Ventures also represents this kind of different background. She started off as a car designer before moving through various different roles in the car industry. While her decade in the automotive business might also qualify her to be an “expert” type investor, it is her design thinking that brings a fresh approach to the team.
“From a designer perspective, you are always seeing through your customers’ eyes. This is very similar to what we are doing in business development when looking at how we can support portfolio companies with their next steps,” she says.
