#71: Behind the Wheel of CVC: Insights from the "STICK" on Strategy and Learning
Corporate Venturing Insights: Leveraging Strategy and Collaboration
This is a newsletter featuring "The Stick" — an elusive force of innovation, much like a certain mysterious driver from Top Gear. Just as "The Stick" embodies precision and expertise on the track, this edition delves into the cutting-edge practices driving success in corporate venturing. Buckle up for a deep dive into strategic learning, collaboration, and the art of balancing bold moves with calculated decisions. The participant has requested anonymity, hence the reference to "The Stick." I hope they will share more key insights in future newsletters.
Learning Through Fund Investments: A Strategic Approach
Investing in funds is an underappreciated method of achieving strategic learning, and one corporation has turned this into a core pillar of their venturing strategy. The guiding principle is clear: fund investments are not merely financial instruments but pathways to greater understanding. By aligning with funds that bring specific learnings—be it from their portfolios, industry expertise, or the caliber of co-investors—these corporations effectively gain insights far beyond the monetary returns.
This approach also creates a platform for interaction with other Limited Partners (LPs). Regular dialogues with LPs from diverse backgrounds have proven invaluable, offering opportunities to exchange knowledge and uncover collaborative synergies. These exchanges illuminate trends, operational insights, and nuances that might otherwise remain obscured.
Collaborative Ecosystems: Building Bridges Across Borders
For corporate venturing teams, collaboration is not a buzzword; it is a lifeline. Partnering with local franchises, industry bodies, and even startups, these teams amplify their impact by leveraging existing networks. For instance, engaging with franchise partners who have deep local knowledge and established operations can be a game-changer when expanding into new markets like Asia.
Similarly, initiatives such as participating in industry-specific boards or associations help these teams stay ahead of legislative and technological shifts. Collaborating in these ecosystems fosters an environment where innovation thrives, and strategic objectives align across multiple stakeholders.
Addressing the Challenges: Direct Investments and Cultural Dynamics
Direct investments, while often strategically significant, come with inherent challenges. A recurring issue is balancing the strategic needs of the corporate parent with the operational realities of startups. Over-involvement can swamp a startup, diluting its agility and broader market appeal. Learning from past missteps, experienced CVC teams now adopt a measured approach, offering startups revenue-generating opportunities rather than overly complex collaborations.
Cultural nuances also play a pivotal role. For example, European and North American venturing cultures differ significantly. European ventures tend to prioritize strategic outcomes, while North American counterparts lean towards financial returns. Understanding these differences ensures that ventures are structured to meet both local expectations and broader corporate goals.
The Power of Networking and Continuous Learning
Events, both formal and informal, serve as critical touchpoints for building networks and sharing insights. Closed-door think tanks and intimate networking dinners often yield deeper, more actionable learnings than large, public panels. By mingling with industry leaders and peers in these settings, corporate venturing teams gain nuanced perspectives that are rarely shared openly.
This emphasis on learning extends internally. Regular portfolio reviews and strategic reporting ensure alignment with corporate priorities. By visually mapping investments—for instance, through frameworks like the BCG matrix—teams can communicate effectively with senior stakeholders, enabling data-driven decisions.
A Model for the Future
The strategies outlined above highlight a robust framework for corporate venturing. Investing in funds for strategic learning, fostering collaboration across ecosystems, addressing cultural differences, and creating feedback loops within the organisation all contribute to a sustainable and impactful venturing model.
By sharing insights and maintaining a learning mindset, these practices not only benefit the corporations implementing them but also strengthen the broader innovation landscape.
I hope you enjoyed this newsletter. If you have any suggestions or contributions that you would like to share with me, please do not hesitate to reach out. I would be delighted to hear from you.