The enthusiasm around corporate venturing at present makes it hard not to reach for US writer Malcolm Gladwell’s famous theory of the “tipping point”.
It is clear that corporates have become a key part of the venture capital industry. For example, there are now more than 1,000 active corporate venturing units, and their investments are picking up significantly, taking their market share to more than 30% of the wider venture capital sector.
For this reason we will be titling our fifth annual symposium on June 2‐3 next year in London “The tipping point for corporate venturing”. We will be looking at how executives can ensure corporate venturing spreads virally, creating a more defined industry – Gladwell argued that ideas spread like viruses, often starting on a very small scale, but becoming contagious under certain special conditions.
This is a great time for corporate venturing executives to capitalise on a key moment in their industry, a time when units have a unique opportunity to embed themselves within corporations.
We would like to try to help by setting out aspects of best practice, which are needed for corporate venturing to spread further. To this end we are producing a special Corporate Venturing Brief alongside our annual review this year, in January, summarising the state of play in the corporate venturing industry.
Our June symposium will also be looking at how the industry should partner government, universities and financial investors to transform venture as an asset class into a larger part of the financial system.
Our sister titles – Global University Venturing and Global Government Venturing – have been set up to help both university tech transfer offices and governments supporting venturing create more defined global communities, with clear best practices.
It should be added that if all these organisations begin to work effectively and in tandem there is a great opportunity to create a kind of global Silicon Valley. If this happens, and there is good evidence it is already happening, it is necessary that entrepreneurs learn to retain the unique benefits of small company fleet‐footedness as an influx of capital comes on a large scale.
Perhaps the most pertinent topic is also what can be done to ensure corporate venturing reaches the full potential it seemingly has at present. Many businesses and hot trends fizzle out or implode as they reach tipping point –how can corporate venturing and the wider venture capital industry avoid this fate?
This fact is perhaps better appreciated by the technology and venture capital industry than many others, as many executives have experienced the euphoria of the dot.com era abruptly ending at the turn of the millennium, causing huge devastation in many of the companies across the technology industry and large write‐offs for venture capitalists. Corporate venturing itself experienced a large pull‐back – only 181 units in our database were formed before 2004.
It turned out this swift change of mood was partly an overreaction – typical of markets given what happened to technology generally. Yet clearly no one working today would like a crash of this magnitude to happen in corporate venturing. As economist John Maynard Keynes said: “In the long run, we are all dead.”
Our symposium next year will talk about the short-term, medium-term and long-term things that need to be done to ensure the current corporate venturing epidemic continues to spread