But, thanks to Jack Crawford , Efrat Turgeman , Jonathan Tudor , Alex McCracken , James Fischer for their insights in our latest Global Corporate Venturing webinar and to Kaloyan E. Andonov for the GCV Analytics data and Dan Stevens for posting up the recording, one possible crumb of comfort at least was found.
The main highlights from the discussion were corporates have been increasingly active direct and indirect investors over the past decade. Covid-19 is slowing the global economy and making it harder to do direct deals and, for related reasons, causing C-suite concerns over their balance sheets.
Dealflow in March was already about 20% lower and pressure on corporate balance sheets is encouraging move from fixed to growth mindset in how to open up to external capital.
This is making corporations even more open to different structures that allow third-party capital to effectively leverage their CVC units or other ways to provide an efficient provision of strategic and/or financial returns and join other innovation tools.
Some of the options being explored and have already been tried include:
- Spin-off CVC unit to independence with majority corporate cash (SAP with Sapphire)
- CVC with minority corporate cash and financial LPs (Baidu Ventures, Cheetah Mobile Fund with SVB)
- In-house CVC with parent and traditional financial LPs (Swisscom with pension funds, or Sony with its Innovation Growth Ventures (IGV) with local banks)
- CVC with parent and Private Equity cash (DTCP or Telstra with Harbourvest) to return cash and also do new deals
- CVC with government cash (+ others) eg SoftBank Vision Fund,
- CVC and Family Office (conflicts/opportunities) eg Fiat/Agnelli’s EXOR or Virgin or Amazon/Bezos
- PE-as-a-CVC (Blackstone, Carlyle, TPG, KKR)
- University with CVC – Oxford Sciences Innovation, CIC, MIT Engine?
- Multi-CVC (OGCI, SoftBank Deepcore I on AI with YJ/Dentsu, Russian IoT transport fund, Monsanto-Microsoft Brazil Fund, Gree’s GVR Fund)
- Multi-CVC with government/financial eg Aster II
- VC with lots of corporate/financial LPs (Emerald, Chrysalix)
- VC-as-a-service (UFirst, Touchdown, 500 Startups, SVB?)
In turn, financial investors are interested in backing CVCs with sector/investing experience as there are now more than 600 CVCs with a 10-year-plus track record which is a whole new cohort of managers to back just when pension funds are looking to downturn to increase or meet allocation.
This makes it possibly the greatest explosion of new, competent managers to an asset class in history.
And a reminder take our survey of eight questions on funding in the current times.
