Harrie Vollaard, Managing Partner
Last week I was at The Next Chapter for Corporate Venture Capital in the Netherlands event organized by Deloitte in collaboration with StartupDelta. Deloitte presented their research on the Dutch situation of CVC capital. This report is a good add-on on what Global Corporate Venturing organisation is publishing.
- Number of CVC’s doubled over the last 10 years;
- Tenfold growth in CVC capital over the last 10 years;
- In total 520 deals done by CVC’s, growth rate 25% annually;
- Growth looks impressive, but is lagging behind in comparison with other European countries like UK and Germany;
- More than 50% of the investments are done outside NL. In my opinion has to do with size of NL and the global reach of the corporates;
- Most of deals are early stage investments, but a shift to expect towards more later stage deals (which will be also on par with what is seeing in other countries).
“My take away is that the number of CVC’s will continue to grow. Many large corporates don’t have a CVC arm yet but are considering one or on the way of launching one in their urge/search for innovation, digital transformation.”
Some questions during the discussion
How to measure the strategic return?
We measure that on 7 items plotted on a spin diagram. It enables you to track the strategic relevancy over time.
How to realize strategic return?
We do that among other things via the role of venture partner. The venture partner secures the potential benefits of working with a corporate (e.g. access to distribution channels, technical expertise, network etc). He/she facilitates the dialogue between portfolio company and business lines, marketing of the corporate.
Is the primary focus on strategic return in conflict with a focus on economic return?
I’m more and more convinced this is a non-discussion. You should do both; invest in strategic relevant companies based on your investment theses AND in well performing companies. If you want to go for the best potential deals you can’t permit to take a cut on the economic return for the sake of strategic reasons. The question is if you do so will you be attractive for other investors and startups on the long term? I don’t believe so.