Venture capital is at a crossroads. As our publication frequently reports, corporations are taking a larger share of the venture industry, while developments such as crowd-funding and the trend towards incubators and accelerators are providing significantly diverse arrays of capital to help entrepreneurs set up companies. This dynamic is providing alternatives to venture finance and at the same time producing a dizzying spectrum of promising companies for capital-rich investors to choose from.
Venture capital is at a crossroads. As our publication frequently reports, the corporations are taking a large share of the industry, with US bank Silicon Valley Bank’s data suggesting corporations are now involved in a third of deals.
Yet beyond this, new developments such as crowd-funding and the trend towards incubators and accelerators are providing significantly diverse arrays of capital to help entrepreneurs set up companies. This is at the same time as the capital needed to reach a large pool of customers has declined significantly as adoption of the mobile web spirals.
This dynamic is providing alternatives to venture finance and at the same time producing a dizzying spectrum of promising companies for capital-rich investors to choose from.
Competition from the corporations at all stages and from crowd-funding, as well as the incubators and accelera-tors, has clearly changed the rules of the game for venture capitalists. At the same time, fundraising is tough for many owing to a history of poor returns.
Given these complex trends, and especially because technological advance is affecting all areas of business, now is probably as exciting a time as ever to be working in and around the venture industry.
Corporations doubtless think so, and, as I report from the sidelines of IBF’s annual corporate venturing event in California this month, this is manifesting itself not just in venturing, but in the aggressive adoption of entrepreneur-ial trends, such as the lean start up movement.
Overall this will see a venture world reborn, with many more constituents doing deals beyond the traditional part-nership-led approach. Corporate venturing’s rise should be seen as a vital component in the reshaping of a ven-ture industry that has achieved great things but is currently transforming.
How corporates interact with venture capital will be a key subject at our symposium on May 20-21, with Qualcomm Ventures’ Nagraj Kashyap and Ariadne Capital’s Julie Meyer as well as GE Ventures’ Sue Siegel and Andrees-sen Horowitz’s Jamie McGurk discussing how the two sides can work together. We believe the growing number of savvy corporates interacting with smart venture firms could be at the forefront of how venture is reshaped.
That this comes at a time when the venture industry is being changed from below should lead to new trends emerging with respect to forming the successes of the future.
How the rebirth of the venture industry assimilates these trends is doubtless going to be of the utmost impor-tance. We will be watching these developments with great interest.
At Global Corporate Venturing, we will also be welcoming in Rob Lavine as news editor this month. He replaces Quentin Carruthers, who is to be editor of our forthcoming third title, Global Government Venturing.
The job of news editor is key to readers’ engagement with the title, ensuring all the significant news in corporate venturing is covered day in, day out. Lavine is a former reporter for Global Corporate Venturing and VB Research, and we look forward to his joining us.
