Global Corporate Venturing Rising Stars Awards 2017: #5 Jack Young

The top two entries in last year’s Global Corporate Venturing Rising Stars list have chosen different ways to develop their careers – one joining a premier VC firm and the other moving to another leading corporate venturing team.

While Lisa Lambert, a vice-president at Intel Capital and last year’s number one, subsequently moved to become managing partner at venture capital firm Westly Group to help its fundraising from external limited partners, Jack Young moved from Qualcomm Ventures to become global head of venture capital at Deutsche Telekom Capital Partners (DTCP), the Germany-based phone operator’s investment management and advisory group with $2bn invested in a portfolio of more than 70 companies.

Vicente Vento, CEO of DTCP, which was launched in April 2015 building on the parent’s T-Venture corporate venturing unit, said: “With his unique qualification and proven track record in building new funds and reputable brands, Jack brings great balance between foresight and a structured investment approach to our venture capital operation. I am proud to have Jack on board as our global head of VC. He not only has a great investment track record, but understands very well how our corporate sponsors think.”

Young said he had had a “productive career at Qualcomm Ventures, having joined in 2008 after working in various roles at technology companies ZTE, Nokia, Amber Networks, 3Com, GDC and Nortel Networks.

“While there I was given a unique opportunity to run two named funds. I started the $100m Qualcomm Life Fund in 2010, focused on digital health, and four years later launched $100m DRX Capital – a joint investment fund by Novartis and Qualcomm exploring digital medicine. With strong corporate strategic and financial supports, I was able to lead the emerging digital health industry and charter a new course.”

Young, a noted fitness fan of tennis, yoga, running, skiing and swimming, said his biggest challenge was in “helping startups in which we invested to develop a meaningful business relationship with our sponsoring corporates”. He added: “Startups have limited resources. It is my job to help them navigate effectively in these giant corporations and their extended networks.”

DTCP manages two funds, one covering venture capital and the other private equity, and are structured with Deutsche Telekom as the sole limited partner.

The venture capital fund at DTCP invests in Europe, Silicon Valley and Israel-based technology companies, according to Young, and “our typical first cheque size is $5m to $10m”.

DTCP is headquartered in Hamburg, Germany, and it opened a Sand Hill Road office in California early last year. Young said he joined the group as head of venture capital in April after eight years with Qualcomm Ventures, and the team had made eight venture investments since the start of 2016 – by the end of November, with another expected to close by publication of this profile – including SafeBreach’s $15m series A round, NS1’s $20m B round and Paxata’s $33.5m D round.

DTCP’s exits include voice service Nexmo’s sale to Vonage for $230m, and immersive sports company Replay Technologies’ sale to Intel for $175m. While good, these relatively pale in comparison to Young’s biggest win, fitness tracking wristband Fitbit.

Qualcomm Ventures was one of the investors in a $43m round for Fitbit in 2013. Fitbit raised $841.2m in its initial public offering nearly three years ago. It still has a $1.7bn market cap, although its stock is trading down by more than 80% since its high in mid-2015.

But such successes point Young to how corporate venturing could improve through offering its staff performance payments based on the returns from deals – called carried interest, or carry, by VCs.

Asked what CVCs could do better to make it a stronger industry, Young said: “Better align the incentives of their investment professionals along with the rest of the venture industry, and give the team more freedom to explore.” His choice of DTCP, therefore, points to a similarity with Lambert, who is eligible for carry at Westly Group.

Young said his ambitions were, first,  “dedicating my energy to ensure the success of our first venture fund at DTCP”, adding: “Since we are structured in a limited partner-general partner relationship with Deutsche Telekom, we will have to plan for our next fund, which I am hoping will be bigger and broader.”

Young said for last year’s Rising Stars profile that corporate venturing had some advantages over traditional venture capital. He said: “Having worked in Silicon Valley as part of a successful venture-backed startup, as well as trying my hands as an angel investor, I concluded that a role in corporate venture capital might be a better fit for my skills and intellectual curiosity.

“In recent years, the venture industry has bifurcated into a dumbbell-shape, with supersized multistage funds on one end and oversized angel funds on the other. If you do not participate in either, you will have a hard time finding high-quality deals or have to resort to taking higher risk. CVC, if structured correctly and considering its strategic value-add implications, can play in this middle ground.”

With DTCP, it seems Young has found his ideal ground.