GCV Powerlist 2022 editorial by James Mawson, editor in chief, Global Corporate Venturing
It is a cliché to say that every year selecting the Powerlist gets harder and harder. With more than 6,000 corporations having invested minority equity stakes in private entrepreneurs over the past decade, including more than 1,000 striking their first deals since the start of the pandemic two years ago, there has certainly been a lot more to review.
My thanks, therefore, to Edison Fu for managing the process over the past few years and in particular for this, his final year before an internal promotion to news editor, for working through the GCV Leadership Society Advisory Board chaired by Jacqueline LeSage, head of Munich Re Ventures, in revising the quantitative and qualitative selection criteria.
The scoring allows the strategic, financial and leadership components of the best leaders to shine through, especially with these 150 winners.
Too often corporate venture capital is referred to as either strategic or financial. The best units and leaders, however, recognise without financial returns there is often little patience at the corporation or syndicate supporting the entrepreneurs.
Without strategic value-add there are also challenges around longevity and relevance, let alone value-add, as Stefan Gabriel, head of Hitachi Ventures, notes in his guest comment in this supplement produced by Poonum Chauhan.
Venture is a long-term industry where the top 20% do about 80% of the deals, according to GCV Analytics. The maturation of the firms means there are about 500 with more than a decade’s track record and there are often clearly marked inflection points in the maturation cycle from starting to expansion, as Liz Arrington, head of GCV Institute and partner at Bell Mason Group, notes in how to land the value of corporate venturing.
Many of the corporate executives the Powerlist report to have changed in the past dozen years GCV has been tracking who does what in the industry and most of the industry’s top leadership has also gone through generational succession in this time. But the persistence of the top performers in building networks, selecting deals and adding value to entrepreneurs remains strong.
The best of next generation is typified by Nicolas Sauvage at TDK Ventures, the only member of the top-20 Powerlist award winners at a unit set up in the past 10 years. His focus when setting the unit up was to learn the insights from the community and advisers, hire and support a great team able to strike great deals (including some notable exits in its first few years) and give back to the ecosystem through the GCV Institute and other platforms. It is a powerful case study and role model for others to look to.
His series of podcasts – transcripts available through the GlobalVenturing.com site – contain essential golden nuggets from the interviewees and himself.
This example and community giving back will be needed now more than ever.
As an association, Global Corporate Venturing exists to serve its members and the community to help provide the news, data, information, training and networks and other support to enable you to make the world a better place through a more efficient allocation of capital to those who can use it best.
It is clear new and existing CVC units and leaders will face increasing headwinds. The global economy has grappled with the pandemic over the past few years and used the disruption as a spur to find new opportunities in the technological, supply chain and business model upheaval.
The unprecedented monetary and fiscal support by governments has helped underpin the economies and kept interest rates low. Now, an era of quantitative tightening and interest rate rises are combining with continued lockdowns in China and war in Ukraine.
This macro environment will see some of the hot money retreat and cause corporations, particularly newer units or those having invested more than $250m to entrepreneurs to reexamine their cashflow commitments to their corporate venturing units.
It could create conditions for the best to shine brighter and scale up faster and further. It could also cause a lot of units to close and affect the entrepreneurs and broader perception of the industry.
How the industry leans into this challenge of the Age of Ashes will define the reputation of the asset class not just the individual corporations and CVC heads. This is a stressful time.
People experience stress as either a challenge or a threat.
The former can improve performance, and the latter hinder it. Looking at the Powerlist winners and the high standards in the industry beyond them it is clear how the best will take this latest opportunity to show their leadership.