Summary research from interviews with 13 CVCs to identify best practices in creating a corporate venture capital (CVC) unit or a corporate accelerator. Key takeaways include having clear objectives, clear processes and structure, easy to measure metrics, having patience and board or executive support, and making contributions to select startups that go well beyond capital. I hope you find it useful. Feel free to distribute further to others who might find value in it. You can reach me at https://www.linkedin.com/in/markbrooks

1. Corporate Venturing
Research and planning to establish an approach to corporate venture capital at the
Association of International Certified Professional Accountants and CPA.com
Mark S. Brooks, MBA
Senior Manager, Innovation
mark.brooks@aicpa-cima.com 1.704.467.4440 (m)
Initially distributed on June 29, 2017

2. The most influential body of
professional accountants in the world
American Association
of Public Accountants
is formed
(now called AICPA)
The Institute of Cost
and Works
Accountants is founded
(now called CIMA)
CIMA is
granted a
royal charter
AICPA makes
peer review
mandatory
Uniform CPA
exam is
computerized
AICPA and
CIMA enter into
a joint venture
AICPA + CIMA
form the new
Association
AICPA & CIMA launch
the CGMA (chartered
global management
accountant) designation
The phrase “generally
accepted accounting
principles” is first used
The Association by the numbers:
650,000 members and students in 179 countries
150,000 members employed by firms and employers worldwide
1,300+ professional staff located in 35 offices around the world providing insight and
support for members and businesses and advocating on behalf of the profession
17 specialized credentials and certificates
2 premier designations – CPA & CGMA
CPA2Biz is founded
(now called CPA.com)

3. The Association is motivated and driven to
assess the value of corporate venture capital
• Major trends are affecting the future of the accounting profession (e.g., accounting and audit jobs are
at 98% risk of being automated; millennials, boomers, Gen X, Gen Z are challenging business models
and expectations of the profession, blockchain and AI have profound implications on role of CPAs being
trusted advisors and the type of strategic value the profession provides, etc.) – we are in a VUCA world
(volatile, uncertain, complex, ambiguous) with tremendous opportunity
• The accounting profession will be unrecognizable in 10+ years
• The most disruptive and provocative innovations will come from entrepreneurs and non-traditional
industry players, not from the belly of well established incumbents including ourselves
• 600+ accounting or finance related startups exist according to angel.co and crunchbase – these are
within our ecosystem
Driven by these intentions:
• Enhance R&D with low risk
• Develop new capabilities for
the Association and
accounting profession
• Gain external market insights
• Access emerging markets,
technologies, and platforms
• Influence the future of the
profession
• Gain a better view of threats
• Identify potential partnerships
with startups
• Create a pipeline of
acquisitions
• Look around the corner at
what’s nextImage credit: Andrew Gaule, Aimava
CVC is an increasingly common and effective innovation strategy

4. We scoured articles and academic literature…We read authoritative books such as…
The Association’s approach to corporate venture capital included a
significant amount of desk research to triangulate on best
practices and lessons learned
… and we interviewed CVCs, VCs, and internal stakeholders…

5. We learned the most by interviewing 13 friendly CVCs and 1 friendly VC
…and attended the Global Corporate Venturing Academy

6. Key recommendations from CVCs/VCs
1. Define clear, focused objectives that expand the corporate’s core
2. Build simple and clear processes and structure
3. Establish easy to measure and strategically aligned success metrics
4. Make valuable contributions to startups, besides capital
5. Have patience and support (internal business units, executives, board)
While not explicitly
stated by anyone, it
became apparent that
there is:
• No one size fits all
• No magic formula
• No recipe for exactly
what you need to do

7. What we learned: Strategy & Objectives
Brand name and presentation title
• Financial vs. Strategic
– Contrasting or prioritizing one over the other is fundamentally the wrong question
– Most CVCs make initial decisions based on strategic interests first and once invested, the
interest shifts to financial
– By definition, financial approach will deliver strategic objectives and vice versa
• Stage of startups – Most CVC units we interviewed are stage agnostic, although some
noted a strong preference for seed or pre-Series A because of the higher influence the
corporate could have on the startup and the relationship’s potential long-term value
• Focus on themes, challenges, problems at the edge of the parent corporation’s core
business – themes help the corporate parent grow into or create adjacent markets
“Your team explores the art of the
possible through practical
examples.”
Comment by former CFO of
Syngenta to the head of CVC
“CVC is required for any
corporation that wants to last
more than one generation.”
AARP Ventures Fund
“Financial vs. strategic is
fundamentally the wrong
question.”
Comcast Ventures
“If the startup is not financially
viable, it cannot be strategic”
Founder of Motorola Solutions
“Go low, go slow, go with what
you know.”
Intel Capital

8. What we learned: Governance
Brand name and presentation title
• Decision making
– Make the group of decision makers as small as possible to facilitate speed
– Voting process by investment committee (often includes C-suite, head of Product, head of
Strategy)
– Due diligence conducted by internal staff; 2 CVC units we interviewed outsource due diligence
• Executive support
– Because of the ambiguous nature of CVC, endorsement and verbose support from the
CEO/COO/CFO/CTO are critical
– Board involvement and support is also important to maintain momentum during C-suite
changes and as a channel for sourcing startups
“Make your CEO and
Board proud of what you’re
doing.”
Contender Capital

9. What we learned: Structure
Brand name and presentation title
• Structure
– CVC team should be either its own team (not built into the corporate strategy team) or its own
separate legal entity, like a subsidiary, both of which enable speed while averting everyday
corporate bureaucracy
– Source of funds is generally not materially significant for the business (e.g., CVC funds may be
drawn from IPO or sale of existing assets / business lines, percentage of what would typically
be spent on R&D, or the balance sheet); Most CVC units we interviewed invest annually from
the balance sheet while only 2 are self-funded from investment returns
– Most CVC units do direct investments while only 2 do a “pool of pools” approach – which is
better depends on objectives, capacity, and risk tolerance
• Team and Talent
– Best CVC staff are experts in strategic and innovative thinking, have an exceptional reputation,
are able to adroitly navigate the corporate bureaucracy, and have either startup or VC
experience
– Most CVC units employ regular corporate staff with high compensation; only 3 of those
interviewed allow staff to carry interest and admitted being outliers – in general, CVC units
advise against this as it encourages unnecessary risk taking and personal conflict
“CVC should unlock
strengths of the corporate
parent without unlocking its
bureaucracy.”
AARP Ventures

10. What we learned: Reputation
Brand name and presentation title
• Build relationships – CVC is very relationship and reputation based; therefore, build and maintain
extensive networks and relationships throughout the topical areas of interest; Majority of deals are
sourced from other VCs or CVCs; minority of deals are sourced from the startup ecosystem
• Be patient – It takes time to build these networks and a positive reputation
• Provide knowledge – The corporate must provide value to its networks of relationships by referring
applicable startups and being responsive to requests for assistance from other CVCs such as
providing topical expertise, knowledge, and other perspectives
• Be seen – Have a physical office or other presence in areas with high startup and CVC/VC traffic
(e.g., Silicon Valley, NYC Silicon Alley, London, Research Triangle Park, etc.)
• Genuinely help startups succeed – Knowledge, guidance on its industry vertical, subject matter
expertise, and access to respective markets are often more valuable than the capital that CVCs
provide to startups
“Be present, be seen, be
engaged”
Motorola Solutions
“The most effective
crystal ball belongs to the
CVC with the best deal
flow and network to
evaluate it.”
Masters of Corporate
Venture Capital, p. 226

11. What we learned: Portfolio approach
Brand name and presentation title
• Knowledge may be more valuable than capital – Small corporates can sometimes provide more
value than big corporates because of their special knowledge, influence, or know-how
• Small equity – If taking equity, aim for <19.5% ownership out of legal and tax implications
• Board seat vs. observer role
– Observer role is easier to handle and will result in fewer fiduciary conflicts with the corporate
parent; can be structured so that you have the same access to information and participation in
discussions as a voting board seat
• Solo investing vs. co-investing / syndicate
– Most CVCs prefer having co-investors as it reduces investment risk through additional expertise
and perspective of the other stakeholders
“Not all money is the
same shade of
green.”
Contender Capital

12. What we learned: Metrics
Brand name and presentation title
• Strategic metrics may include
– New knowledge for the business units
– New market or competitive intelligence that would have been expensive or difficult to
obtain otherwise
– Strengthening or positioning of brand or product within new markets
– General learning and exploration of what’s possible
• Financial metrics may include
– New revenue from licensing, royalties, IPOs, sell of intellectual property, etc.
– 1 CVC unit counted money saved as its primary financial metric
– Although most CVCs we interviewed noted that strategic metrics were more important,
financial metrics do play a role in long term sustainability
“Even if a particular
investment fails, it is
still deemed a success
if we learned a lot.”
Second Century
Ventures (National
Association of Realtors)

13. “Beware of these dangers,” they all said
Common Danger Proactive Solution
Lack of strategic focus and
clear objectives
- Develop clear financial and/or strategic objectives
- Only invest in startups within your domain/ecosystem where the edges of fungible and loose
- Determine themes of the CVC fund or approach; know what will be valued by the corporate
Lack of commitment
- Secure Board and business unit support so that the CVC unit survives any CEO/C-suite churn
- Involve the corporate Board to ensure long term commitment and tap into their networks for deal flow
- One CVC unit suggested taking your executive team on an annual field trip to Silicon Valley to meet
with CVCs/VCs/startups
Impatience
- Regardless of how you implement CVC, remember that it’s a 5 to 10 year effort for impactful and
meaningful returns to be realized; be patient
Moving too slow
- The group making CVC decisions should be small and well informed because speed is critical; there
is no upside in being slow; move with speed and deliberation
Lack of relevance
- Ensure that you provide value beyond capital to startups
- Stick around for follow-on investments and other opportunities to continue providing meaningful
guidance and help
Go in too early on startups - Regardless of stage, look for evidence of revenue and growth before investing or partnering

14. Financial returns are dependent on the stage of startups
Stage General definition
Investment
Risk
Influence
Size of
investment
Time to see
financial
returns
Typical size
of return
Seed
The new venture has no customers or
revenue; it is focused on researching,
assessing, and developing an initial
concept.
High High $ 5+ years 10x
Start-up /
pre-Series A
The new venture is beginning its
product development and initial
marketing efforts; may have not yet
sold anything commercially.
Medium Medium $$ 3-5 years 5x
Growth /
post series A
The new venture has customers and
revenue and is focused on expansion
and growth; usually already backed by
capital from other venture firms.
Low Low $$$ <3 years 2-3x
• Many CVCs want access to the early innovations – majority of important entrepreneurial decisions have
been made before the Series A investors come on scene

15. We probed on the philosophical differences between M&A and CVC
• M&A and CVC are complementary
• If not doing CVC, you will likely miss startups that could be valuable to you
• Spend the money now (CVC) or a lot more later (M&A)
Corporate parent’s
operational capability
Maturity of target
company/solution
Type of problem it solves
Uncertainty of
technology or
solution
M&A
Operations are ready to receive
and integrate into business
Solution is mature enough so it
requires minimal development;
solution is functional and already
working
Gaps in the value chain or
present capabilities; need to
leverage the solution today
Low
CVC
No operational link is necessary;
focus on R&D; use as market
intelligence and learning tool
May be very early stage
requiring additional research
and development; opportunity to
influence its development
Much larger problems than
traditional R&D; exploration of
new territory
High

16. Creating a corporate accelerator/incubator can be
an effective approach for corporate venturing
• Corporate accelerators often require much less capital than do direct CVC
investments
• A corporate accelerator can focus on earlier stages of startups than a typical
investment but later stages than a traditional non-corporate incubator
• Draw for startups to participate in a corporate accelerator include having
access to industry thought leaders and experts, the halo effect of working with
a major industry player, education on the industry, mentorship, and needed
exposure to existing markets
• Incubating may lead to M&A, equity ownership, or longer term commercial
relationship that is mutually beneficial
Developing a corporate
accelerator is the path
that the Association
and CPA.com are
pursuing

17. Our approach to CVC is to create the
Association and CPA.com Startup Accelerator
We want to help transform startups that can transform the accounting profession
What we are offering startups:
- Up to $20,000 in funding
- Subject matter expertise, knowledge, coaching on the accounting profession
- Potential access to our members and the market
We are focused on two specific themes:
- Technology and financial information – tools that further strengthen the ability of individual
accountants or finance teams to be the analysts, strategists and consultants that are indispensable to
organizations throughout the world. In particular, help accountants and the profession shift their focus
more to value-add work rather than routine tasks. (e.g., automating routine tasks, blockchain, artificial
intelligence)
- Professional development – tools that help accounting and finance professionals and their teams
develop, grow, and measure new competencies to advance in their careers while adapting to
technological and business change. (e.g., personalized education, measuring growth and development
of professional competence, connecting mentors and mentees and experts)
General eligibility of startups:
- Seed or pre-Series A, with some exceptions
- Must have a functioning product or service
- Must be able to address one or more of our defined themes
Applications due by October 5, 2017 http://aicpaglobal.com/accelerator/
Your referrals to this
accelerator are welcome; we
will reciprocate when possible

18. In addition to creating the
Association and CPA.com
Startup Accelerator, this
research yielded a lauded
article in the CGMA
Magazine (Issue 2, 2016), a
global publication of the
Association and read by
management accountants
throughout the world
http://www.cgma.org/magazine/issues/2016/dec/rise-of-corporate-venture-capital.html

19. THANK YOU
linkedin.com/in/markbrooks
Mark S. Brooks, MBA, is an entrepreneur at heart.
At age 15, he founded a popular weather images website ranked in the top 3% of Internet
traffic in the 1990s. Could have sold it during the dot-com bubble but was too green to
know better. Mark studied meteorology in college and spent 11 years commercializing
atmospheric science and data.
Mark co-founded Envirsion, a weather consulting business and built an advisory tool for
strawberry growers that realized >40% U.S. market adoption within 1 year. Separately, he
built a water deficit prediction tool for high-end vintners in Napa and Sonoma, which
realized terrific revenues. Unfortunately, the business failed due to technological inferiority.
He subsequently earned his MBA, developed data analytics products for the freight
railroad industry, and tried unsuccessfully to raise capital for a climatic search engine
startup. Since then, he has published several well-regarded articles about Innovation in
CGMA Magazine and in academic literature and is a routinely sought after speaker.
Mark’s current role at the Association of International Certified Professional Accountants is
to steward the future of the profession. Specific areas of focus include co-founding and
leading the Association and CPA.com Startup Accelerator, thought leadership, internal
consulting, and helping others achieve their unrealized potential.
1.704.467.4440
mark.brooks@aicpa-cima.com
@mucello
I welcome your questions,
comments, and the opportunity
to connect with you