By Tony Chao
Recently the Applied Ventures team attended VentureScape, the National Venture Capital Association’s premiere annual gathering, and heard from a broad range of voices across the venture capital (VC) value chain on evolving innovation ecosystems.
This year’s meeting themes centered on diversity, rise of the “Unicorns” (billion-dollar tech startups), innovations in venture investing, and the impact of corporate venture capitalism on the broader venture landscape.
A session titled “The Changing Landscape of Venture Investing” was particularly timely, as it highlighted what Applied Ventures has been experiencing: corporate VCs are one of the fastest growing segments of the venture ecosystem and are an increasingly important source of venture capital.
According to NVCA, corporate VCs represent approximately 11% of all venture dollars deployed to startup companies in 2014, and to-date represent approximately 17% for 2015. About 30% of NVCA members are corporate, and there is a broad mix of financially and strategically motivated corporate investors. During the session Michael Brigl from Boston Consulting Group addressed the growth in corporate venturing, its global impact and ability to propel corporate VCs into the role of “innovation change agent” within parent organizations.
Below are key takeaways on what’s behind the changing landscape of venture investing:
- Corporate investors act like VCs first and foremost. They are effective funders and can rapidly accelerate development or commercialization.
- Corporate VCs bring deep expertise, a trusted reputation, business acumen and a wealth of established resources and R&D know-how. This allows them to quickly address issues and tap into extensive internal resources across the parent organization to accelerate a startup’s momentum and speed time to market.
- Corporate venture arms serve as an effective facilitator for entrepreneurs to approach corporations about business development activities.
- From a semiconductor perspective, corporate VCs are critical in funding tomorrow’s innovations to keep the industry roadmap on course and help solve the daunting technical and manufacturing requirements for next-generation devices. Currently, the semiconductor industry is undergoing more transitions than it has in the last decade, and now is the time for strategic investors like Applied Ventures to come forward and help keep the innovation engine alive.
The value of a corporate investor can’t be denied for entrepreneurs looking to take their idea to the next level. As the venture capital arm of Applied Materials, Applied Ventures has invested in more than 62 portfolio companies over the past decade, fueling a steady track record of successful ventures around the globe, including two IPOs and the acquisition of several portfolio companies. Applied Ventures seeks out innovative technologies and new ideas with disruptive growth potential to enable further advancements in our existing businesses (semiconductors, display and cleantech), as well as in adjacent markets, such as life sciences/medical and image detection.