Knife Capital Exit Conference - May 2014
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An overview of the Corporate Venturing landscape and how Tech Entrepreneurs can leverage opportunities in this space
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Knife Capital Exit Conference - May 2014
- 1. Corporate Venturing: Insourcing Innovation Gareth Jane Startup Technical Strategy Lead Microsoft BizSpark SA
- 2. provision of venture capital by one company for another in order to obtain information about the company requiring capital or as a step towards acquiring it (dictionary.com) activity of a large company investing money in a smaller company in return for a share of its profits (Cambridge Dictionaries Online)
- 3. Innovators Dilemma Source: http://en.wikipedia.org/wiki/Disruptive_innovation Clayton M. Christensen
- 5. Corporate Venturing in Technology Companies Tech Dev • R&D • Labs Product Dev • BU Dev • Open Innovation HR • Recruit • Knowledge Man Bus Dev • Strategy • Tiger Teams Market Dev • PR • Marketing Acquisition Licensing Funding Joint Dev SIG Open Source InternalExternal Source: Corporate Venturing in Technology Companies . SDG Group. 2012
- 6. Access to existing distribution channels Access to proprietary technology Lower cost of capital Lower operating costs Lower market entry costs Pre empt competitive retaliation Make (a lot of) money Source: John Bates (C) London Business School 2009
- 7. Access to new distribution channels Access to proprietary innovation Lower organisational cost of failure Lower operating costs Lower market entry time Pre empt competitive attack Meet Corporate strategic goalsSource: John Bates (C) London Business School 2009
- 8. Venture Harvesting turning spare corporate resources into cash
- 13. provides seed, venture, and growth- stage funding to the best companies — not strategic investments for Google. Target: Enterprise, Mobile, Consumer, Health, Data, Science
- 14. Nike+ Accelerator (in association with TechStars) Target: use Nike+ fitness technology to create products and services that will inspire athletes across a broad range of activities
- 16. Target for Microsoft Ventures
- 18. Grant Funding:$10k - $50k
- 20. “Intel Capital has the mandate to get the best exit possible for Intel Corp., not to serve as a feeder for Intel Corp.,” Sam Hamadeh Target: invest across the broad spectrum of technology innovation to encourage the creation of the technologies of tomorrow
- 21. Ranking of Tech VC firms, rated by total number of 2013 exits Source: http://venturebeat.com/2014/05/08/intel-capital-saw-more-exits-than-sequoia-greylock-or-google-ventures-last-year/
- 22. The Economist: “Samsung tiptoes into the technology to get familiar with it, then waits for its moment…. When it pounces, the company floods the sector with cash, moving into very high volume production as fast as possible.” Target: semiconductor, telecommunication, software, Internet, bio engineering and medical industry, film/video industry
- 23. Amadeus Capital Partners $75 million Target: Cloud-based Software to be used by the middle class in Africa, Middle East, Asia and Latin America
- 25. Pharmaceutical/Biotech Europe CVC Grant VC 1 VC 2 VC 3 USA CVC Grant VC 1
- 27. Enterprise Development Government Funding Equity Equivalence
- 31. Acquisition
- 32. Azure Incubation
- 33. Funding
- 34. BizSpark
- 38. Thank You
Editor's Notes
- Term Corporate venturing is tricky – many different definitions
- Market progress is separate from technology progress. Customers do not always know what they need. Innovation requires resource allocation which is extraordinarily difficult for disruptive technologies. Disruptive technology needs a new market. Old customers are less relevant. Disruptive technology is a marketing problem, not a technological one. Organizations have narrow capabilities. New markets enabled by disruptive technologies require very different capabilities. Information required to make investment decisions does not exist. Failure and iterative learning are required. It is not wise to always be a leader or always a follower. Disruptive innovations reward leaders. Small entrant firms enjoy protection because they are doing things that do not make sense to the industry leaders.
- Good Examples of start of CV are Pharma and Chip Industries – both were facing disruption and needed to cover their backs: Faster response to market transformations A better (and quicker) view of threats Easier disengagement Combine with VCs to magnify the impact of investments Increased Product/Platform demand Direct ROI Corporate Social Responsibility
- Start-up View of Corporate Venturing
- Corporate View of Corporate Venturing
- Playing backwards – currently deal is being handled by Venture Integration Team at MS
- Acquisition would have been processed over last many months by MS M&A Team
- GreenButton was a Top App managed by Global Azure Incubation Team: Explain how big corporates have early adoption programs etc. for new Tech People on the ground are needed to drive engagement
- Raised a funding round in 2010/2011 – apparently including $1million from MS
- Joined Microsoft BizSpark
- So, where are the from – New Zealand. So why aren’t SA companies doing the same?
- Consider these factors when dealing with CV programmes
- These companies are all in SA – engage with them