Global Corporate Venturing Rising Stars Awards 2016: Introduction

There’s a Cherokee story about two wolves fighting, which was used in last summer’s Disney movie Tomorrowland. The wolves are an analogy representing the good and optimistic sides of people and the negative, pessimistic ones. Which one wins depends “on which one you feed,” as the heroine in the film says.

There are always challenges ahead but if you cut out the negative messages to let hope in and “bring dreamers together” then the challenges can be met, is the film’s core message.

Well, it was a Disney film. But in the world of innovation capital and entrepreneurship, if you want to understand the future it is worth following the money to see what people think could or want to happen.

And the money men have been usually just that, men.

Last year, venture capital firm Social + Capital and news provider The Information looked at 71 venture firms representing more than $160bn in assets under management. They found women made up 60% of non-investing roles at venture firms in the survey, but only 8% of the senior investment team and 20% of junior investors, while non-whites made up between a fifth and just more than a third.

And as we are social animals, we tend to like those that are like us, which tends to mean male investors from the region’s majority ethnicity invest in male entrepreneurs that look like them. Data provider CB Insights’ (CBI) 2010 reportfound 8% of the funded founders were female, while 87% were white. This tends to mean greater returns could be available to those looking outside this box, with a Dow Jones report of more than 20,000 venture-backed companies up until 2011 showed more diverse teams tended to be more “successful”.

There are broadly two approaches to thinking about changing this, if change is desired. First, begin what Google calls a process of “unbiasing”, or making the unconscious conscious, use structure, clear criteria and data to make more objective decisions.

This is hard. The scientific evidence demonstrating the negative effects of unconscious bias is well-documented, but there is still a lot to learn about how to mitigate it, Google noted in its HR platform, Re:Work.

A second way to tackle what can seem institutionalized bias is diversify the types of managers allocating the money to startups. Even if they just then select those who look like them it will mean a diversified portfolio.

This is also hard, but one where corporations with their sophisticated human resources policies can have an edge over their lifestyle-business venture peers.

Media entrepreneur and investor Kay Koplovitz in an editorial for Forbes using data from CBI found 17% of the top 20 corporate VC firms in the US in 2014 had women on the investment team, compared to the 6% American national average of female VC investors, quoted from a study by Babson College. 

With this context, it has been interesting to look at this inaugural list of Global Corporate Venturing Rising Stars for two reasons. The first thing that stands out is the fantastic calibre of the people in the industry. Most have post-graduate qualifications, many are domain experts in their subject and varied backgrounds often covering the full sweep from corporate experience, startups and previous venture investing experience. There are two who ran nuclear submarines for the US Navy, junior Olympic basketball players, alpine skiers and another who likes to do up old houses in her spare time.

To just pick one of countless examples, as Skyler Fernandes, head of Simon Ventures, himself likely the youngest person in the country that runs a corporate venture group for an S&P 100 company and hence eligible for the Global Corporate Venturing Powerlist 100 to be announced ahead of our London Symposium on 24-25 May 2016, said: “Natalie [Hwang] was screened out of 546 candidates, and I was impressed by her knowledge of the space and background in investing as an angel. She also has a high degree of intellectual curiosity.”

Hwang previously worked at alternative asset manager Blackstone Group seeding new managers and as an angel investor herself before joining Simon Property Group’s corporate venturing unit.

It is striking comparison to a stereotype of corporate venturing being where a senior manager is put out to grass in ventures before their retirement.

Entrepreneurialism can strike at any age, but often in the mid-30s to 40s, and so it can be for the good investors. Talent must be allowed to win out rather than seniority and sinecures.

The second interesting part of the list is to imagine how many of this list will make it further through more promotions*. With 44 female CVCs in the top 100 Rising Stars reporting to 15 female managers there is a strong potential for mentorship and momentum to pull together what Lisa Lambert, Global Corporate Venturing’s top Rising Star and a vice-president at Intel Capital, called: “The good old girls’ club.”

Providing hierarchies remain in organisations of the future, not everyone will go further, with a number of the Rising Stars saying they would consider setting up their own venture firm. As with Hwang, however, having talented, motivated bosses prepared to train, mentor and test their teams helps.

To “unbias” requires deliberation, structure, a set criteria and data. Depersonalising using data rather than quotas. The challenge is the criteria will change. As Charles O’Reilly, professor at Stanford University’s, research indicates, depending on the stage of development of the parent from core to growth to exploratory, as well as the venturing unit’s own maturity curve, different leaders can be required.

A good leader recognises their strengths and builds a team to complement. But shaping skills at such a moving target is challenging.

It remains a challenging role to lead and rise in the industry and keep talent.

Dixon Doll, founder and chairman emeritus at VC firm DCM, at the Moment 2015 US-Japan event in October said the most important signal for a top CVC was commitment from the top. The mediocre failed to pay attention to keeping good people and instead drove them out.

The roll call of amazing investors and managers burned out by endless requests from the parent’s business units while set impossible demands to find and help portfolio companies is a sorry one. The chopping of so-called tall poppies who outperformed expectations and reaped bonuses that caused envy is equally sad.

While half of the core CVC teams are now sourced outside of the corporation, 75% of the respondents to the 2015 J Thelander compensation survey said their “current title and compensation structure failed to accurately and appropriately compensate them as a CVC professional”.

Financial and strategic performance scores should count for less than personal well-being. While fortunately rarer than the staggering levels of pupils killing themselves in the heart of Silicon Valley’s top schools, suicides do happen in this industry. One Rising Star candidate from the telecoms industry committed suicide just before last summer.

Rankings, such as this Rising Stars list, can be part of the problem by separating and dividing people from their greater commonalities with peers but positive role models should be more positive than fear of unintended consequences.

Those blessed to have been successful can inspire and lead. They can also share.

There is a rare and precious degree of mutual collaboration and support in corporate venturing across regions and industries, even while there remains fierce competition for the best deals. It is a rare display of co-opetition (cooperation and competition). Long may it last and let us all continue feeding the right wolf.  

For the list of winners click here and methodology here

* The ranking was prepared in November 2015, with Quinn Li subsequently promoted to head Qualcomm Ventures last week.