Corporate Venturing: Insourcing Innovation

Gareth Jane Startup Technical Strategy LeadMicrosoft BizSpark SA

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)

Innovators Dilemma

Source: http://en.wikipedia.org/wiki/Disruptive_innovation Clayton M. Christensen

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

AcquisitionLicensing

FundingJoint Dev

SIGOpen Source

Inte

rnal

Exte

rnal

Source: Corporate Venturing in Technology Companies . SDG Group. 2012

Access to existing

distribution channels

Access to proprietary technology

Lower cost of capital

Lower operating

costsLower market entry costs

Pre empt competitive retaliation

Make (a lot of) money

Source: John Bates (C) London Business School 2009

Access to new

distribution channels

Access to proprietary innovation

Lower organisation

al 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

Venture Harvesting

turning spare corporate resources into cash

Venture Innovation

Intrapreneurship

@Google Talks

3M’s 15% Time

Microsoft Garage

IBM Jams Hackdays

Ecosystem Venturing

provides seed, venture, and growth-stage funding to the best companies — not strategic investments for Google.

Target: Enterprise, Mobile, Consumer, Health, Data, Science

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

Microsoft Ventures

Target for Microsoft VenturesEmbedded Devices

Enterprise Management

Analytics

Education

Entertainment

Smart Cities

Wearables

Breakthrough Tech

Global Accounts Exposure

Grant Funding:$10k - $50k

Corporate Private Equity

“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

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/

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

Amadeus Capital Partners$75 million

Target: Cloud-based Software to be used by the middle class in Africa, Middle East, Asia and Latin America

Source: http://www.ifra.net/blogs/posts/2009/06/30/naspers-rewarded-for-its-focus-on-emerging-markets

Pharmaceutical/BiotechEurope

CVC Grant VC 1 VC 2 VC 3

USA

CVC Grant VC 1

MediTech NicheGvt/

Research

Pharmaceutical/Biotech

Enterprise Development

Government Funding

Equity Equivalence

Venture Integration Team

Acquisition

Azure Incubation

Funding

BizSpark

Programs

People

Chaotic

Align Early

Thank You