Corporate VCs power up the market, many led by women

There is a lot of angst in the ranks of VC firms about the lack of women investing partners, but the story for Corporate VCs is quite different. According to Toby Lewis, editor of Global Corporate Venturing, nearly all of the top 50 corporate venture Investing firms have women in their senior investment ranks.

Looking more closely at the top 20 corporate venture firms, 16 of them have women among their investing partners. Importantly, according to CB Insights, 17% of all corporate venture capitalists in the top 20 are women. This is in stark contrast to the number of women in venture firms at large, which is estimated to be at 6%.

Why is this important? As an entrepreneur and supporter of women entrepreneurs in diverse industries throughout the technology and life science fields, I am keenly interested in getting parity for women looking to secure institutional funding.

According to the Babson study, a fund with at least one woman on the investment team is three times more likely to invest in companies with women CEOs.

This is why woman playing a larger role in corporate venture funding is so important. Women entrepreneurs in high growth tech and life science companies are more likely to be seen and heard by corporate VCs than they will be in the venture community at large if the Babson study holds true.

Kicking off the Global Corporate Venture Innovation Summit in Sonoma, California this week is Deborah Hopkins, chief innovation officer and CEO of Citi Ventures, and she heads a team of 16, 11 of whom are women. They have the responsibility of identifying and investing in companies of relevance to the financial world. Fintech is one of the hottest categories for venture investing in 2015. Citi’s team is populated by women who wield power of capital and much more.

The same is true in a vast array of consumer and enterprise products and services. Sue Siegel, CEO of GE Ventures and Healthymagination, has seen her role expanding beyond venture, to one that oversees innovation within the corporation. Her team looks for underutilised patents and then matches them up with startup innovators, or if none are found, to actually create a company to bring new patented technology to market.

With a portfolio of 47,000 patents, that is some portfolio to monetise, whether with early-stage companies or partnerships with other corporations. Either way, her corporate venture unit has huge impact on GE’s world of innovation.

On another note, Darcy Frisch, VP and investing partner at the Hearst Corporation has a different mandate for investing. She looks for media technology innovation but is not limited to that mandate. At Hearst, like their counterparts Amy Banse at Comcast Ventures, Avid Larizadeh Duggan, general partner at Google, are judged on the financial outcome of their investments. In addition, Hearst has funded an innovation lab to track companies from inception.

In a recent survey released by First Republic Bank, the objectives of corporate venture funds are almost equally focused on strategic alignment with corporate mandates and financial returns of the investments. Other important motivations are for corporate VCs creating knowledge for thought leaders in the business, establishing relationships with potential acquisition targets and leveraging portfolio companies to improve internal efficiencies.

I have worked with over 600 women entrepreneurs over the last 15 years, and many of them have disruptive products and services important to the corporate world.

One entrepreneur is Christina Lomasney, founder and CEO of Modumetal, a Seattle-based company that has developed a revolutionary nanolaminated alloy that is stronger and lighter than steel, more corrosion resistant and durable than chrome, and is redefining metals performance in major industries. She sees opportunities to transform the materials used in the construction industry, the oil and gas industry, airplane and automobile manufacturing, and roads, bridges and tunnels. Among her corporate investors are Chevron, ConocoPhillips, Catamount Ventures, Golden Seeds, Second Avenue Ventures, and the Founders Fund. These corporate investors bring not only capital to Modumetal, they bring support for changing industry standards to include the new alloys developed by Modumetal and they bring project revenue.

Another entrepreneur is Carol Politi, founder and CEO of TRX Systems, a company founded to investigate the requirement for firefighter tracking systems driven by the September 11th tragedy. As we learned in that situation, tracking systems reliant on GPS and line of sight were rendered ineffective. After extensive work with the Department of Defense, TRX developed 3D location and mapping for indoors, underground and in other locations without reliable GPS by utilising smart phones and other wearable technology.  Motorola invested in TRX as an enhancement to the product line they offer to first responder units across the globe. In this case, Motorola brings capital and a potentially potent distribution channel.

There are dozens upon dozens of high-growth companies led by women that would be attractive to corporate VCs. They run the spectrum from media, tech, software, predictive analytics, fintech and fashion tech to biotech, diagnostics, devices and healthcare IT.

Focused on getting women entrepreneurs and their companies to parity in funding, whether venture-backed or corporate venture-backed is a goal of mine. I didn’t know when I started down this path by launching Springboard Enterprises 15 years ago, that this would be my next career after founding and building USA Networks into a multi-billion dollar business. This mission has, however, captured my passion and my commitment. While we still have a long way to go, 600 companies and over $7bn in capital raised, we are on our way.

Corporate venture investors are becoming more important on the pathway to funding, as they invested in 25% of all venture deals in 2015. According to KPMG and CB Insights research, I am especially pleased to see more women on the investment side at corporations. Perhaps they can lead the way for venture funding at large. With funds that have at least one women on the investing team, the likelihood of women entrepreneurs getting funding improves by 70%.

We are not at parity yet, but women leading the way as corporate investors give us hope.