Software AG, the second-largest software vendor in Germany, examined how and whether to set up a corporate venturing unit and decided against it a few days before gaining expected ratification from the full board. Global Corporate Venturing editor James Mawson spoke to Frederic Hanika, senior vice-president and head of mergers and acquisitions.

Mawson: Why was Software AG interested in corporate venturing?

Hanika: We were interested if there was a way to leverage the core business. It comes down to the question: where do you want to source innovation from? Research suggests innovation is highest if you have limited resources, hence pouring dollars into research and development is the wrong way of scaling your business. The question was how to do this because as an organisation we were structured just to sell our…