The writer GK Chesterton famously said: “I owe my success to having listened respectfully to the very best advice, and then going away and doing the exact opposite.” Many professional advisers must hope the English wit was wrong. Perhaps they should demonstrate a belief in the efficacy of their own advice by following it and investing. There are few other ways advisers can demonstrate strongly that they believe the advice they are giving clients will help them succeed. The growing body of investor advisers and other service providers – under the spotlight in our services sector feature on page 8 of the magazine – are clearly confident the services they provide will help their clients win, even if they can never be certain all their advice is being taken on board.
I recall a conversation many years ago with a London lawyer who had spent his professional life advising private equity clients. When he had started doing so in the 1980s he was keen to convince his partners to invest in the deals, but as upstanding members of a traditional law firm that abhorred risk, they had baulked at doing so. Looking back at how the UK private equity industry made multimillionaires of the people he advised, he lamented the risk aversion of his more traditionally-minded partners.
The regrets, if there are any, from the current generation of services providers investing in corporate venturing will be the less painful mistake of having earned smaller fees than might have been possible. Seen in this light, when advising a highly-rated start-up, taking equity as part of a service fee has to be an attractive option – the upside is potentially much more rewarding than the downside.
As part of the services feature, we have profiled UK-based communications group WPP, whose chief executive Sir Martin Sorrell is speaking at our May 21-22 London Symposium, along with Mark Read, head of WPP Digital, who oversees the group’s corporate venturing investments as part of that role.
Last year WPP had a home-run exit with social media marketing company Buddy Media, which sold to US-based cloud technology company Salesforce for $745m, and for this, as well as for its diverse investment strategy, was named our most influential group in the sector.
The services feature also profiles Yet2Ventures-backed barcode scanning portfolio company MoBeam, which is due to raise its B round shortly.
Sorrell and Read will be joined at the symposium by Al Gore, co-founder of investment firm Generation Investment Management and a former candidate for the US presidency, and many top executives, such as Warren East, chief executive of ARM, the UK-based microprocessor company.
Many of the biggest names in corporate venturing will be speaking, including Charles Searle, of South Africa-based media group Naspers’ investment unit MIH, Ralf Schnell, chief executive of Siemens Venture Capital, the corporate venturing unit of the Germany-based industrial company, Claudia Fan Munce, managing director of IBM Venture Capital, the venturing unit of the US-based technology company, Nagraj Kashyap, head of Qualcomm Ventures, the venturing unit of mobile technology company Qualcomm, Deborah Hopkins, head of Citi Ventures, the venturing unit of the US-based bank, and Marcos Battisti, managing director of western Europe and Israel for Intel Capital, the corporate venturing unit of the US-based chipmaker.
I will enjoy attending this year’s conference for the first time as editor of Global Corporate Venturing. This is my first issue and I hope you enjoy the contents, including an excellent look at the Russian market by our managing director Tim Lafferty, an insider’s view by Innogy Venture Capital’s Crispin Leick on the utilities sector, Andrew Gaule and entrepreneur David Roth discussing commerce, cereals and chicken, an interview with ETH Zurich academic Boris Battistini, after he and colleagues have published new research into corporate venturing, our monthly data round-up, and much more.
Unlike Chesterton, we do hope you listen to the advice from the experts contributing to this issue and at our forthcoming symposium.