Corporate Venture Capital - Goliaths of VC

Corporate Venture Capital - Goliaths of VC

For those not into religion or biblical stories, a brief background and primer can be read about David and Goliath here. This primer is necessary to understand where we are going with the blog. A lot of the myth of the adversary relationship between startups and Corporate giants involves culture and people. Sometimes, it may seem as simple as the difference between Entrepreneurs and executives/managers. There is a growing trend among corporations to fund, buy, or partner with startups as a "relevance" strategy.  Relevance in terms of strategy, culture, innovation and disruption. If you take the step to partner with a Corporate giant, it may seem like "sleeping with the enemy." To help you out, these are some of the largest Corporate giants in VC with a description of their business in their own words.

Google Ventures (GV) - The venture capital arm of Google, or it's parent company Alphabet, can be considered the perennial giant with 2017 revenues of $110 billion. The GV story described by its website is stated as follows:

"Launched as Google Ventures in 2009, GV is the venture capital arm of Alphabet, Inc. We’ve invested in more than 300 companies that push the edge of what’s possible. In the fields of life science, healthcare, artificial intelligence, robotics, transportation, cyber security, and agriculture, our companies aim to improve lives and change industries. We’ve built a team of world-class engineers, designers, physicians, scientists, marketers, and investors who work together to provide these startups exceptional support on the road to success. We help our companies interface with Google, providing unique access to the world’s best technology and talent."

Intel Capital The venture capital arm of Intel is also referred to as the Intel Capital Diversity Fund. In 2017, Intel recorded revenues of $62.8 billion. The Intel story described by its website is stated as follows:

"Whether you're seed stage or ready for growth, Intel Capital can help take it to the next level. Since 1991, Intel Capital has invested US$12.3 billion in 1,530 companies in 57 countries worldwide, and 660 portfolio companies have gone public or been acquired. As a stage agnostic investor, we work with companies of virtually every size across a wide range of technologies. We invest in developers and providers of hardware, software, and services."

Softbank Group - If you are seriously interested in corporate venture capital, you have probably heard of the Softbank Vision Fund and its unicorn hunter, Masayoshi Son. Softbank is a Japanese holding company with 2017 revenues of $82.6 billion. The Softbank story as described by its website is stated as follows:

"Our goal is an Information Revolution — Happiness for everyone. Becoming the corporate group needed most by people around the world. At SoftBank Group Corporation, we're looking to the next thirty years and beyond with a vision for innovation and growth. Since its establishment, the SoftBank Group has consistently operated under the vision of becoming a company contributing to people's happiness and joy, and to the future of the world, not only pursuing the profit of the company. This vision is a driving force for the SoftBank Group as we continue to pursue growth."

HP Tech Ventures - HP Tech Ventures is the venture capital arm of Hewlett Packard. HP plays on the folklore story of the entrepreneurs who built HP into a Corporate Giant themselves, Bill Hewlett and David Packard. They were the original garage startup founders of Silicon Valley. The HP story as described by its website is stated as follows:

"Launched in 2016, HP Tech Ventures is the venture capital arm of HP Inc. Operating across teams in Palo Alto and Tel Aviv, HP Tech Ventures is fostering an ecosystem of innovation and reinvention that will define tomorrow’s world and experiences. We are pursuing strategic investments and partnerships with innovative start-ups in disruptive technology areas. HP is a Fortune 100 company with world-class technology, one of the world’s largest channel and distribution partner networks, and a vast global manufacturing and supply chain. With over 75 years of experience and expertise in technology and innovation, we are uniquely positioned to help our portfolio companies gain a foothold and scale quickly."

Fujitsu Limited -  Fujitsu Limited is the venture capital arm of Fujitsu Global. Fujitsu may seem like an old-school technology company but with an innovative thinking in surviving in an age of constant technological change. Fujitsu had 2017 revenue of $37 billion. The Fujitsu story as described by its website is stated as follows:  

"Fujitsu announced in 2015 that it is establishing a new corporate venture fund to strengthen collaboration with new ventures and further enhance its services in the fields of business innovation and social innovation, which form the pillars of the company's growth strategy. Fujitsu established its first corporate venture fund in 2006 to collaborate with promising ventures in Japan and around the world, and the new fund will further strengthen these activities. In addition, the company will strengthen its efforts to accelerate the creation of new businesses that leverage the ideas and expertise of Fujitsu Group employees. Specifically, by combining new ventures' speed, fresh ideas, technologies, and their reach into new markets together with Fujitsu's capital, intellectual property, customers, and channels, Fujitsu seeks to strengthen both its own services and those of the ventures. The new fund will be used to primarily invest in four areas of business innovation - cloud, mobile, big data, and security - and seven areas of social innovation - transportation, healthcare, lifestyle industries, food and agriculture, energy, education, and the environment."

 

We took these descriptions directly from the company's websites to avoid any bias or influence to let you decide for yourself.  But for some startups, it makes sense to partner up with a Corporate Giant. The reasons may be as varied as financial resources, growth & business strategy, founder's ambitions, or culture fit. Our best advice in picking a corporate giant as a partner is to take time to do your due diligence and pick wisely. Culture fit will determine everything in the success of the partnership. There are many stories of startups that have failed once being bought by a corporate giant.

Have you been bought by a corporate giant and have a story to tell? Let us know your story of success or failure in our forum.




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