Corporate Venture Capital
This article is written by Jeremiah Uke, a Contributor Author at Startup Istanbul.
Andrew Romans is a General Partner at Rubicon Venture Capital, he is also CEO and General Partner at 7BC.VC, he has great experience working with startups and aiding them to raise funds from venture capitalists, he is also the author of books: “Masters of Corporate Venture Capital” and “The Entrepreneurial Bible to Venture Capital”. Andrew was present at Startup Istanbul 2016 and he gave an insight into what the future of venture capital is.
Writing his book titled “The Entrepreneurial Bible to Venture Capital”, Andrew Romans interviewed about 50 venture capitalists and CEOs asking them to tell him a story where they learned something. Andrew is writing another book “Mastering Corporate Venture Capital”, where he had to interview the top 30 corporate venture capital groups such as Intel, Qualcomm and Salesforce, getting information on how they operate. In corporate venture capital, companies that make huge about of peradventure $50 billion revenue per year, and they start investing in startups and possibly venture capitals as well.
Andrew talks about the emerging markets not having the same kind of evolved ecosystem as the one in Silicon Valley, New York or London, corporations can fill in this gap by learning how to get involved in startup innovation via venture capital. In Silicon Valley, for some of the acquisitive companies (companies that buy startups), having an internet startup means you’re more likely to be acquired by Google, enterprise software startups are likely to be acquired Oracle and Vmware, all these companies are located around Silicon Valley, when such companies are acquired, they stay in Silicon Valley and in turn start investing money into startups as angel investors. Regions such as this one does not get the same attention or have close to the same number of venture capitalists and this is a problem that can be solved by corporations.
In the 1980’s, you needed to have a huge budget to make something innovative, companies such as IBM and HP would employ a bunch of engineers and get them to work on innovative stuff, but today, most talents are less interested in working, they are more into building their own startups, big companies need to reach out to these talents and grab startups, and pull in their innovation. Using Burak Buyukdemir who is the founder of Startup Istanbul as an example, Andrew believes Burak should have a venture capital fund and corporates here in the region should invest in it.
Startups also need to learn to partner with venture capitalists in ways that can benefit both parties, starting by seeking answers to the questions “what can I offer the investor?” and “what is in it for me?”, venture capitalists want to make money while startups worry about growing fast and potentially go international. If we keep waiting for the startup ecosystem to evolve, we might find ourselves doing less than we are meant to do.