NVCA Coffee Pot Discussion: What is your definition of strategic?

By Vic Pascucci

NVCA, Corporate Venture Group Education Committee Chair

The Education Committee of Corporate Venture Group recently hosted our quarterly Coffee Pot webinar focused on “What’s Your Definition of Strategic?”  Over a year ago, we started hosting what we’ve called Coffee Pot discussions to bring corporate VCs together for informal discussions on key topics. This December, our panel discussion was moderated by Vic Pascucci, formerly Head of USAA Ventures with panelists Paul Sestili, Rogers Venture Partners; Mike Chuisano, J&J Development Corp and Tony Chao, Applied Ventures.

One of the initial qualifying questions from entrepreneurs, co-investors and even internal business stakeholders to the corporate venture team is, are you a strategic or financial investor?  The panel discussed the entire spectrum of strategic definitions from listening post/ eyes and ears transactions, where there will be no integration, all the way to mandatory business sponsorship for integration with gain/loss sharing with the business unit.

We did an informal survey with Coffee Pot participants to find out how their corporate venturing groups define their investment goals. Of the corporate investors who responded, 58 percent cited strategic investing as their primary goal and 42 percent cited financial returns.

Coffee Pot survey 1

The panel concluded that while one motivation likely needs to be primary (strategic or financial), the two can not be mutually exclusive.  Strategic investors must be able to show financial returns to their corporations, entrepreneurs, co-investors, as well as business stakeholders who want to see some strategic alignment or business benefit from the financial corporate investor.

Our survey also showed that respondents defined strategic primarily as exploring non-core business development and serving as eyes and ears for the parent corporation. Coffee pot survey 2.JPG

Other implications of the definition of strategic that were discussed included metrics, recruiting, team structure, board seats and deal sourcing.

Bottom line to the panelists was that reputation, trust, alignment and influence across all internal and external stakeholders are key to corporate venturing success.  Fundamental to that success is everyone understanding what it means to be “strategic.”

We invite you to listen to the entire Coffee Pot discussion here.

Please feel free to reach out to Vic Pascucci with any questions or future discussion topics at victorpascucci3@me.com