How corporate investors can ace communications with the parent company

One of the biggest focus areas for corporate venture teams is communication. It isn’t enough to run a successful fund, corporate investors need to let the rest of the company know about it. They also need to have effective two-way communication about the needs and pain points of corporate business units so they can target the right kinds of investments.

So, what is the best way to engage with the mothership? What is the right communication structure, what should be discussed and how should the messages be tailored if they are going to the C-suite or to business units? We asked some experts from the CVC world to give us some tips.

Make contact with as many C-suite execs as you can – before you start, if possible

Crispin Leick (left) set up a corporate venture unit for RWE in 2010, then did the same at another Germany energy utility, EnBW, five years later.

He says creating the right communication structure takes time, but if possible, speak to the top of the company as thoroughly as you can before you even launch your CVC activities.

“I would always urge [the CVC] to talk to all the board members, all the C-levels,” Leick says. “You should know them, they should know you. I basically ask one question: what do you expect from your CVC unit? What’s the target here?

“Because if only one of the board members [is enthusiastic about a target] and the other ones are not, then you won’t survive a change in this board membership…not everyone has to love you but you should have an idea of what the CTO is expecting from you and the CEO, the CSO – whatever the structure of the corporate is.”

Mark Brooks worked in CVC for one of the largest agribusinesses in the world, Syngenta, before putting together and running a unit for a smaller company, FMC. He agrees that in order to “bend the market” towards the corporate through early-stage investment, you really need access to the top levels.

“I think that if the CVC is intended to be a market shaper or a market vendor, then it has to have that top-level visibility, access, endorsement and buy-in as part of the routine way that it communicates and works,” he says. Making sure you’re aligned closely with the top of the company means you have a clearer picture of what would be truly innovative, otherwise you’re in danger of being a passive participant who just follows trends.

“When you’re buried deeper into the organisation, or when your investment committee isn’t comprised of those top-level executives who have that kind of authority and influence over the entire enterprise, it’s a lot harder to bend the market,” he adds. “At that point, I would argue you’re just reacting to what’s already happening out there.”

What does the parent company want to hear?

The next step is to work out what to prioritise in your conversations.

Roslyn Aird (right) is vice-president of customer solutions and delivery for energy supplier Shell, concentrating on low-carbon solutions, which in practice means she has a lot of contact with Shell Ventures and its portfolio companies.

Corporations might want many different things from their CVC arm, she says, but one thing they all want is intelligence about what is happening in the wider market.

“There’s no point in having a CVC if the corporate is not leaning in and listening to what our investments are seeing in the market,” she says.

“From the corporate perspective, we want to know what the CVC is learning, what is it bringing to the table with a sense of speed and agility, and what they are learning through their development cycle. We look to the CVC unit to look at the market more generally, to get eyes and ears into the market, but also, where appropriate, learnings from where we’ve invested.”

It is important to be able to adjust the messaging to suit the corporate officer the CVC unit is speaking to, says Leick. Leick is a veteran of making this kind of adjustment as EnBW New Ventures originally reported to the corporate’s CEO, before switching to its chief financial officer.

“With the CFO, CVC is a financial business model, so I’m just touching shortly on the investment themes and I’m really showing him numbers, growth rates, raw margin, returns, cash-on-cash stuff,” Leick says. “He needs numbers, so when I talk about a portfolio company with him, he wants to know our participation size and how much money we have in there and what we believe the exit could look like.”

It’s to be transparent, he adds. That way the upper level of the company has a firm understanding of the CVC business model and its upside while being assured that the potential downside is under control.

C-suite vs business units – tailor your approach

Corporate VC is not just about communicating with executives, but also the individual business units (BUs). That means tailoring the approach, as business units are often more focused on short-term pain points, rather than the longer-term strategic outlook that interests the key decision makers.

“The corporate isn’t necessarily thinking only about the short term. They’re thinking about longer-term innovation cycles and how to understand enough about business models and technologies to know what is happening, what the pace of change is and to allow them to understand how that might impact the energy sector at large, for instance,” Aird says.

“The information that I would bring to business unit folks would be a lot more tactical, a lot more detailed, a lot more ‘here’s the technology we’re seeing, here’s what this company is doing with their technology, here’s the IP this group has’,” Brooks (left) says.

“The C-suite communication would be the same sort of message, but more elevated. It would be taken up a level, to be more inference-based: what does this mean for the next year of our business? What does it mean for this new thing that we’re promising to deliver next quarter?”

The business units are looking more for information and solutions that can enable them to take action in the short term and react to immediate problems, Brooks says.

It isn’t a one-way process. The CVC team is also receiving and absorbing information about the challenges a part of the company is having, the things they need and the things they wish they had. Working closely in this way can cut down on problems for the CVC unit further down the line.

“To the business units, there is this core problem: there is always this question about whether we are investing in startups that are in competition with what they do,” Leick says.

“They always say: ‘We can do it better,’ and ‘We can do it internally’ – and this is the nature of their business so I’m not criticising, but that is how it is. So, with the business units, you need to figure out a different way.”

Build a network and over-communicate

Being a corporate VC provides plenty of advantages: the resources, expertise and market contact of a large player. But to actually make use of those things means creating a network within the company. You need to be “part of the family,” Leick says.

That means having a clunky laptop from the corporate, using the same IT systems and, even if the CVC team is distributed across several geographic offices, having a presence at the parent company’s physical location. CVCs must try to be as much a part of the organisational family as possible without jeopardising the CVC business model.

“In many large corporations, there is an internal network and that is driven by lunch meetings, coffee meetings and so on,” Leick says. “If you are not located where the corporate is, you aren’t part of that network.

“I’m not saying the whole team has to be there, but for me as a managing director, it’s an absolute must. I have to be here, in Karlsruhe, at EnBW headquarters. I see all these colleagues when I go to the canteen; you chat, and that is so important. Because we are so different, these informal communication lines are so valuable.”

Once that network of contacts is in place, it’s important to maintain contact so that everyone is on the same page. Don’t be shy, Brooks says. Err on the side of over-communication, because what a CVC does may not be obvious to the rest of the company.

“Don’t assume that just because you’ve talked to one business unit, that somehow your message got through to all the people it needed to, or that you’ve learned everything you needed to learn,” he adds. “These organisations are big, they’re global, and there are pockets of information, movement and intelligence. You really have to get into all of those nooks and crannies.”

Leick has taken that further, taking a lead from the new chair of the GCV Leadership Society, Nicolas Sauvage, and hired an engagement manager. Their job is to talk to different parts of EnBW and find out what their pain points are, in turn helping to steer the direction of investments.

“It took us two years to get the network going and understand this, but it felt like the last two investments we’ve done really dropped on a pain point,” he says. “You help the corporate and you help the startup, so it’s win-win – I think that engagement management was an important step for us.”

Lastly, don’t underestimate the value of one-to-one communication. It can be easy to get bogged down in your day-to-day workflow and end up relying on written updates to talk about your achievements. But sending newsletters and reports isn’t enough, Aird says. You need to engage with purpose and make sure you’re having conversations where you can get into things in depth.

“You’ve got to be in the room, or at least the virtual room, and you’ve got to have a conversation and really understand what’s on each other’s minds,” she says. “Both from an insight perspective – what we’re seeing – but also a learning perspective from how the corporate is responding to the information and the insights they are receiving.

“You can’t always be distracted by your day to day – that’s got to be a part of your day to day.”