LONDON – The European corporate venturing scene is suddenly hot property as evidenced by the number of bodies crammed into CMS Cameron McKenna’s office on Feb. 15. The breakfast seminar, co-hosted with First Stage Capital, was titled “Corporate Venturers – Friend or Foe?”
If you believe Christian Hackett of Enron Broadband Ventures, corporate VCs are your friend. He kicked off the seminar by referring to a recent survey produced by London Business School which concluded that companies with both corporate VCs and financial VCs performed significantly better on initial public offerings than those that just have financial VC backing.
The checkered past of corporate venturing and the varying degrees of willingness within corporations to embrace its many forms were up for discussion. Norman Fiore of Reuters Greenhouse Fund, the company’s technology focused investment vehicle which has had some headlining successes in its portfolio, referred to 1991 when a Reuters employee who was based in Palo Alto, Calif. found his way into the Reuters board meeting. He impressed on the assembled group, with the force of his fist on the table, that the Internet was going to be really big and Reuters needed to embrace it or die a corporate death. So impressed was the board that the employee in question had his contract of employment severed the following day.
Anecdotes aside, the message was that corporate venturing – at least among the panel members’ firms – is here to stay. Hackett pointed out that for most it was not a core business with Enron, as a $60 billion market cap company, having committed just $200 million to its fund. In an answer to whether corporate VCs will disappear, as in the past, when the going gets tough Fiore noted that he wouldn’t be sorry to see some who are muddying the waters disappear.
Questions from the floor indicated that some in the VC, incubator and accelerator community are winning significant business from corporates keen to venture. However, they realize they are entering the unknown, and paying handsomely for advice.
In addition to Hackett and Fiore, the panel consisted of Perre Suhrcke of Deutsche Bank e-Ventures and Dr. Simon Murdoch of Episode Partners.