We canvassed many of the most important corporate ven-turing executives and the surrounding ecosystem’s key players on what they think is the big opportunity in 2014 and what they will look to improve this year, as well as quizzing them about whether they use preferential terms.
Some respondents were bullish on early-stage, while there was general anticipation of the accelerated digital advance we can expect next year, and particular sectors were also highlighted by some for transformation.
Executives were keen to implement organisational change by boosting their teams as well as looking to improve their interaction with entrepreneurs outside their organisation.
There was a wide range of preferential terms many groups looked for, although a fair number of executives said their unit did not ask for special terms.
What is the big opportunity in 2014?
Jens Eckstein, SR One: “Scarcity of investors in seed and early-stage presents great opportunity. I am pretty bullish.”
Geert van de Wouw, Shell Technology Ventures: “Invest in classical oil and gas challenges around sub-surface sensing, big data analytics, cyber security, CO2 abatement technologies. Go back to the core.”
Jim Lussier, Dell Ventures: “Expanding our programme into new areas, including cloud, big data, next generation data centre, mobility and security.”
Olivier Garel, Unilever Ventures: “Digital again and col-laboration with other venture funds. Asia becoming more relevant as the IPO [initial public offering] market remains difficult.”
Girish Nadkarni, ABB Technology Ventures: “Internet of things.”
Detlef Pohl, Siemens Venture Capital: “Private and pub-lic cloud software for corporates.” Issam Dairanieh, BP Ventures: “Data analytics.”
William Taranto, Merck Global Health Innovation Fund: “Big data, including cloud, security and privacy. Also tech-nology-enabled care.”
Akira Kirton, BP Ventures: “Digital.”
Adrien Henry, Blue Orange: “More regulatory thresholds for environmental performances.”
René Savelsberg, Chrysalix Set: “Fundraising.”
Mark Read, WPP Digital: “Ecommerce.”
Pieter Wolters, DSM Venturing: “More syndicationwith other corporate venturers when investing. Hopefully continuation of publicexit uptake and more corporate acquisitions.”
Brian Kolonick, Cleveland Clinic Innovations: “Data analytics for population management and distance health.”
Fabienne Herlaut, Ecomobilité: “Mobility sector is really hot.”
Alex Steel, Syngenta Ventures: “Africa.”
Kay Enjoji, TEL Venture Capital: “Hydrogen energy related.”
Ron Laufer, MedImmune Ventures: “Fundraising for new healthcare venture capital funds.”
Graeme Martin, Takeda Ventures: “Convergence between pharma and IT industries. Bridging the gap between the two by forming integrated combined business units.”
Fred Brothers, FIS: “Go earlier stage, but do it in a disci-plined manner.”
Shin Nagakura, Transcosmos Investments: “Ecom-merce in Europe in the short term.”
Peter Cowley, Martlet: “The influx to the UK of entrepre-neurs from eastern Europe.”
François Badoual, Total Energy Ventures “Industrial energy efficiency. Energy storage.”
Davorin Kuchan, Texas Instruments: “Use corporate strength to stimulate growth and innovation in core semicon-ductor and hardware sectors. Internet of things, connected autotech, and indus-trial are ready for connected, smart, data-driven revolution.”
Ignaas Caryn, KLM Royal Dutch Airlines: “Growing the market for second generation biofuels. (Corporate) ventur-ing becoming a key driver for sustainable economic growth in Europe.”
Albert Fischer, Yellow&Blue Investment Management: “The energy industry needs to make a shift from genera-tion capacity as being its biggest asset to the customer relationship. Market players able to adapt to this have the biggest opportunity to emerge as a winner in the years to come. Secondly, we believe China is going to play a big role in the energy domain.”
Andrew Gaule, Corven Networks: “We will see key inno-vations and regions having more signs of a tipping point. For example, some so-called emerging markets will shift the centre of gravity of more organisations.”
What will you look to improve in 2014?
Girish Nadkarni, ABB Technology Ventures: “Better market due diligence. Holding the line on rising valuations.”
Jim Lussier, Dell Ventures: “Even more proactive out-reach to the entrepreneurial community in areas of strate-gic interest.”
Olivier Garel, Unilever Ventures: “Dealflow.”
Detlef Pohl, Siemens Venture Capital: “Increase effi-ciency in the due diligence process.”
Akira Kirton, BP Ventures: “Exits and monetisation.”
Geert van de Wouw, Shell Technology Ventures: “Enhance dealflow from non-traditional sources, like space, food industry or China – for example, material sci-ences – marine industry (offshore) and hybrid solutions between renewable energy and fossil.”
Adrien Henry, Blue Orange: “Trigger even more oppor-tunities between portfolio companies and the group’s core activities.”
Mark Read, WPP Digital: “Help our investments even more with revenue growth.”
Pieter Wolters, DSM Venturing: “Fur-ther focus on selected specific areas. Active drive to capture strategic and financial value from the moment of investment through to exit.”
Brian Kolonick, Cleveland Clinic Innovations: “Finding that sustainable source and assessing opportunities more quickly.”
Fabienne Herlaut, Ecomobilité: “Management team assessment.”
Alex Steel, Syngenta Ventures: “Capturing more strate-gic value from our portfolio.”Kay Enjoji, TEL Venture Capital: “More global investment, especially in Europe.”
Graeme Martin, Takeda Ventures: “Better focus on proactive strategic investment that represents a genuine business adjacency.”
Fred Brothers, FIS: “The speed in which we can take a deal from idea to completion.”
Shin Nagakura, Transcosmos Investments: “Team. US and Europe.”
Peter Cowley, Martlet: “Take on more human resource.”
François Badoual, Total Energy Ventures: “Reaching out to new territories.”
Davorin Kuchan, Texas Instruments: “Streamline due dilligence process, invest in earlier-stage disruptive technologies.”
Ignaas Caryn, KLM Royal Dutch Airlines: “The continu-ous supply of renewable fuels for aviation.”
Albert Fischer, Yellow&Blue Invest-ment Management: “Business building for our portfolio companies.”
Jens Eckstein, SR One: “Optimising SR One model for entrepreneurs in res-idence and incubation.”
William Taranto, Merck Global Health Innovation Fund: “Better overall man-agement of our portfolio companies.”
Issam Dairanieh, BP Ventures: “Portfolio management process.”
Andrew Gaule, Corven Networks: “Improve how organi-sations are going to link their venture units to the core busi-ness. This has been a success in a number of organisa-tions but more need to work on this.”
Do you ask for different or preferential terms?
René Savelsberg, Chrysalix Set; Detlef Pohl, Siemens, Venture Capital, William Taranto, Merck Global Health Innovation Fund; Ron Laufer, MedImmune Ventures; Mark Read, WPP Digital; and Jens Eckstein, SR One said they did not ask for preferential terms. Alex Steel, Syngenta Ventures, said “We try hard not to ask for preferential terms…” The various terms asked for by other respondents are detailed below.
Girish Nadkarni, ABB Technology Ventures: “We ask for standard terms, which include liquidation preference.”
Jim Lussier, Dell Ventures: “Depends on the situation. Generally look for board observer seat, information rights and notice on change of control.”
Olivier Garel, Unilever Ventures: “Warrants where our corporate is a significant client to the invested company. Other usual protections.”
Geert van der Wouw, Shell Technology Ventures: “Deal specific.”
Akira Kirton, BP Ventures: “Guaranteed access to tech at commercially favourable rates for a period.”
Adrien Henry, Blue Orange: “Looking for good business interaction with sister operational business units.”
Pieter Wolters, DSM Venturing: “Across the spectrum. Varies per case and dependent on history and syndicate.”
Fabienne Herlaut, Ecomobil-ité: “Ratchet, liquidity, liquidation preference.”
Graeme Martin, Takeda Ventures: “Board observation right.”
Fred Brothers, FIS: “We have a list of standard preferences we require for each investment.”
Peter Cowley, Martlet: “We always co-invest with angels, so we use ordinary shares for [UK] Enterprise Investment Scheme status for the angels. Sometimes with a one-times liquidation preference.”
Davorin Kuchan, Texas Instruments: “Try to stay away from preferential terms when syndicating, but when leading core tech, may look to secure intellec-tual property rights or notification rights. Also look to add value via distribution or manufacturing capabilities.”
Ignaas Caryn, KLM Royal Dutch Air-lines: “Liquidation and exit preference anti-dilution – full ratchet – drag or tag along.”
Albert Fischer, Yellow&Blue Investment Management: “We wish to have control over the company, since we are an active investor.”