STANFORD, CALIFORNIA -- As the global economy keep sputtering, corporate venture capital offers a glimmer of investment hope for startups. In corporate venture capital, companies hook up startups with a vast global network of customers, offer business and marketing strategies and at times provide financing. The upside for startups: much quicker growth and powerful partners. The upside for companies: access to new technology and the chance to acquire or form long-run partnerships with the best young companies. As the markets for IPOs and acquisition swooned, corporate VCS invested in 21% of the nearly 4,000 startup deals in 2007. See USA Today story: "Companies Give Startups Billions in Venture Capital"
While some economic sectors stagnate and companies go belly up, corporate VCs keep hammering away at innovation, and help to keep the U.S. and global economies fresh and dynamic, says a U.S. Department of Commerce report last year called "Corporate Venture Capital: Seeking Innovation and Strategic Growth." Another report on the corporate VC realm, by Wharton management professor Gary Dushnitsky and New York University management professor Zur Shapira, has found that corporate VCs invest in more mature and stable startups, while also using larger "syndicates" (a band of venture firms backing a startup) than traditional venture capital firms. ("Entrepreneurial Finance Meets Organizational Reality: Comparing Investment Practices by Corporate and Independent Venture Capitalists.")
A key figure in the corporate VC world is Claudia Fan Munce, (photo, left) v.p. of corporate strategy at IBM and managing director of the IBM Venture Capital Group. A Stanford MBA with an M.S. in electrical engineering from Santa Clara University, Munce and her crew work with more than 1,300 startups and other venture-backed business partners in the U.S., Asia, Latin America and other regions. The IBM venture group seems to be everywhere. (See Drew Clark, another IBM Venture Capital Group executive, on a recent online panel with Tom Foremski, the business journalist/blogger at SiliconValleyWatcher.) IBM's technology tale is wellknown. But an equally critical and less-explored element of its success has been its long-run global management and business strategies across borders, from projects on global innovation to its Smarter Planet holistic approach to business. Munce, a Taiwan native who grew up in Brazil, illustrates the global business and cultural vision demanded of 21st-century executives and entrepreneurs. She spoke with Cool Global Biz at the Global Technology Symposium conference at Stanford University late last week.
On startups in today's global economy: "Obviously IBM is a global company, and our large enterprise customers are global companies. The big difference today for the venture community is even small (entrepreneurs and startups) are becoming micro-multinationals. They recognize exactly what we recognize: they have to be able to serve a much broader market than just their local market or the country they emerge from."
On the globalization of talent: "Entrepreneurs are everywhere -- in China, India, Russia . . . If you look at a company that has 15 people, these 15 people reside on five different continents and even more countries . . . Finding the right team and identifying talent at a global level is actually the major factor in dictating the success of that company. " On globally-integrated business functions: "Companies are started with the thought of being integrated for a global market . . . We establish a sales team in that location, a solution in that language . . . Customers are very global today, so companies must leverage their infrastructure wherever they are . . . That's the key to this whole new level of globalization." On global business and technology in the coming decade: "It will be very much along the same lines. We see the world being much more connected, much smarter . . . Everybody will be connected through the Web and mobile devices and GPS devices, and all of this intelligence and data will be rapidly analyzed . . . to help people live their lives and make smarter decisions . . . ."
Comments