More than a decade ago, venture capitalists Marc Andreessen and Ben Horowitz looked at talent agency Creative Artists Agency (CAA) for inspiration in how to support entrepreneurs and run their then-new firm. Michael Ovitz, CAA’s co-founder, served on Andreessen and Horowitz’s prior startup, Opsware’s, board from 2000 until Hewlett-Packard’s $1.6bn acquisition in 2007 and shared his secrets with the two partners, Horowitz told the Wall Street Journal back in 2011. Behind the scenes, however, they were also looking closely at corporate venture capital firms, such as Intel Capital, for insights in how to add strategic value to entrepreneurs and also connect them to their nascent portfolio companies, insiders said. The model has worked for all parties able to add value to entrepreneurs and win deals in an increasingly competitive landscape for scalable businesses. The third-quarter results have seen record activity in the venture industry, with hedge funds alone investing about $153bn in 770 deals so far this year, which was about 4% of deal volume but about 27% by value, according to Kristin Kramer at investment bank Goldman Sachs in its podcast, Why Hedge Funds Are Turning to the Private Markets. Corporations in the first nine months of the year have been involved in more deals by value than the entirety of 2020, according to GCV Analytics. The ability of investors to identify areas of interest and pull together a working group of entrepreneurs and people to test out a thesis through accelerators or venture studios has grown in efficiency. As James Currier told Azeem Azhar on the Exponential View podcast published by Harvard Business Review: “We can look to the movie industry as a historical example of what will happen. “When we first had movie technology in the 1920s, you had entrepreneurs doing it. And then you got these studios, which had the knowledge about how to make movies – the technology, the audio, the distribution of the movie houses. And the studio model dominated until the 1960s, when enough people had been on enough great movies. “So all the people who worked on Casablanca, all the people who worked on Gone with The Wind – they had seen what it looks like when you make a great movie, when you had enough of this operational expertise out there. Then you move to a world where the agents ran Hollywood because they could pull together a group of 12 and they could pretty reliably make a great movie. “And…

Subscribe to go deeper

GCV subscribers get access to all our proprietary data and deep-dive articles, as well as the global directory of CVC investors.



Not sure if you have a subscription?