If software is eating the world, as venture capitalist Marc Andreessen contends and industrial group General Electric seems to agree with having set up a software fund this past week, then it is perhaps ironic that a number of the largest such investors in start-ups have yet to tuck into the full buffet to scale up their dealmaking and support their back office.
Global Corporate Venturing is reviewing the software providers that support corporate venturing units with an anlysis to be released next year. As part of this process we held a live, sponsored question-and-answer webinar with one such provider, Relevant, to examine its EquityWorks product.
Ray Haarstick, chief executive of Relevant, and his team first developed EquityWorks 15 years ago. He said the main challenge was helping its clients maximise the productivity of their teams and finding the right deals for the parent companies, while still being able to accurately forecast upcoming cash needs and consolidate the cost and value of existing holdings.
As he demonstrated the EquityWorks software, Haarstick was able to show how deals could be logged by source and then data and contacts managed through the due diligence process. If a deal is rejected it can still be held for potential resuscitation, while completed transaction are added to the portfolio and monitored for their planned and actual financials and key performance indicators, such as month- or quarter-end revenue, net income, head count, and burn rate.
The valuations and future cash needs can then be reported with greater ease back to treasury in a form that fits with the existing technology infrastructure.
Haarstick summed it up by saying: “It pays to outfit your team with the right tools of the trade, so they can systematically track incoming deals, monitor your portfolio, forecast cash needs and efficiently consolidate your holdings. Team members will be happier and more productive, and management will be able to better monitor the success of your CVC [corporate venture capital] programme.”
Global Corporate Venturing will be continuing to review other providers, so please let us know which ones the industry uses and what are the important issues and criteria you are looking at.