Claudia Fan Munce, managing director at US-listed technology company IBM’s Venture Capital Group, last year became the first corporate venturing board member of US trade body the National Venture Capital Association.
This endorsement follows 12 years of pioneering work by Fan Munce. IBM Venture Capital commits to nearly 100 independent venture capital funds and eschews direct equity investments. By backing VC funds, IBM sees their portfolio companies and is an avid acquirer to boost its revenues.
Fan Munce, one of the founder members of IBM Venture Capital and
managing director since 2004, said: “In 2000, during the heyday of the [dot.com] bubble, not investing [directly in start-ups] was a strange position to be in. Sometimes it was even tough getting meetings then. We had to spend a lot of time explaining our model and value to the venture community.”
However, now the group has gained plaudits and expanded through the
creation of SmartCamps to connect more directly with entrepreneurs and
the wider venture ecosystem.
Fan Munce said: “IBM’s model really has not changed at all. We are not looking to get a financial return through equity, but we are looking for top-line revenue growth through innovative partnerships with start-ups. Slowly things have evolved.
“Now the idea of corporate venture arms has really come into its own. Many groups, including Harvard Business School, have said how innovative the IBM model was. Now it has become a standard strategy for corporations.”
In fact some of the hottest venture capitalists turn to the company for help, in areas such as geographic reach, which even the most successful financial investors cannot rival corporations for.
Fan Munce, who is also vice-president of corporate strategy at IBM, said: “IBM is in 173 countries, that is a large geographic footprint and a powerful differentiator. It is rare to look at something in a region where we do not have a local operation for me to depend on.
“Look at Brazil. People in the venture community are discovering Brazil. Jim Breyer [partner at Accel who backed social network Facebook] came with us to Brazil last year. IBM has been in Brazil for 98 years and I have personally been involved with the Brazilian VC association going back to 2004.”
She added: “We are showing VCs that there are tremendous opportunities for innovation in areas like smarter cities and smarter healthcare. This strategic dialogue is very powerful. In the old days, VCs wanted to give you a menu of their portfolio. ‘Here is our menu, pick the ones you want.’
“Now, we work more collaboratively. Our venture partners want to know our point of view, what we are hearing from the clients we serve every day and what are the emerging business models and opportunities.”
Prior to her role with the VC group, Fan Munce was head of technology transfer and licensing for IBM Research after joining the unit in 1985, and she refers to herself with pride as “a 28-year IBMer”.
Fan Munce holds a master’s degree in electrical engineering and computer science from Santa Clara University and a master of business administration from Stanford University.
Fan Munce was on the board of the Latin America Venture Capital Association for many years and is also on the US national association’s venture capital board in China.
Lessons from the top: Fan Munce said: “You should understand the culture and strategy of your corporation and try to get as close as you can to it.”
