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FinditonAmazon:https://goo.gl/xWXKZEorsearchAmazonfor“Masters

ofCorporateVentureCapital”or“AndrewRomans”

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ContentsContributors&Interviewees.....................................................xvii

Foreword-WilliamKilmer-formerHead,IntelCapitalEMEA;OperatingPartner,MercatoPartners;Founder&CEO,PublicEnginesxxiOrientation-AndrewRomans...................................................xxv

Chapter1-Motivation&Goals-WhyCorporatesEstablishCVCGroups.........................................................................1

CorporateR&DMustBeReinventedAsCVCUsheringinaNewEraforCorporateVentureCapital-IgorSill-ManagingDirector,GenevaVentureGroup..................5

Chapter2-CaseStudiesofCorporateVCs..............................10CaseStudy-MotorolaVentures-MatthewGrowney-FormerCofounder&ManagingDirector;CEO,IssabellaProducts.........................................................................10

CaseStudy-TelefónicaVentures-JackLeeney-USHeadofInvesting13

CaseStudy-SwisscomVentures-PärLange-Founder&InvestmentOfficer 15

CaseStudy-IBMVentureCapitalGroup-ClaudiaFanMunce-RetiredCofounder&ManagingDirector,IBMCapitalGroup;VP,IBMCorporateDevelopment;VentureAdvisor,NewEnterpriseAssociates(NEA)...................................................................................20

CaseStudy-SalesForceVentures-VilliIltchev-FormerDirector&Cofounder;Partner,AugustCapital;SVPStrategy&CorporateDevelopment,Box..........................................26

CaseStudy-VMware-AlexWang-VicePresident,Strategy&CorporateDevelopment 30

CaseStudy-DraperNexus-MitchKitamura-Cofounder&ManagingDirector 35

Casestudy-SimonVentureGroup(SVG)-J.SkylerFernandes-ManagingDirector 37

CaseStudy-TooManyPitchersandNotEnoughCatchers-AGCVentures(AsahiGlassAmerica)-MasatoshiUeno-SeniorManager.................................................40

CaseStudy-IntelCapital-WilliamKilmer-FormerHead,IntelCapitalEMEA;OperatingPartner,MercatoPartners;Founder&CEO,PublicEngines....................43

CaseStudy-IntelCapital-KeystoSettingUpaSuccessfulCVC-SitaVasan-FormerManagingDirector;ManagingDirector,SiliconValleyBank;VP,BanqueIndosuezParis;VP,Bankof

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Tokyo 49

ADollarisWorthaThousandWords–AndrewRomans..........................51

CaseStudies-CiscoSystemsandQualcommVentures-FrédéricRombaut-FormerManagingDirector,HeadofCorporateDevelopmentInternational;Founder&FormerManagingDirector,QualcommVenturesEurope;FormerApaxPartners;Cofounder,BouyguesTelecom;FounderinResidence,FoundersFactory................52

CaseStudy-QualcommLifeFund-JackYoung-FormerHead;HeadofVentureCapital,DeutscheTelekomCapitalPartners;GeneralPartner,dRxCapitalAG57

CaseStudy-VerizonVentures-SureshMadhavan-InvestmentManager58

CaseStudy-USAAVentures-VictorPascucciIII-Founder&FormerHead;Chairman,CorporateVentureGroupEducationCommittee-NationalVentureCapitalAssociation;HeadofCorporateDevelopment,USAAVentures.........................................64

CaseStudy-VolvoVentures-JonasLandstrom-ManagingDirectorUSA 69

CaseStudy-BMWi-Ventures-MarkPlatshon-SeniorAdvisor;ManagingDirector,IcebreakerVentures..............................................................................................71

CaseStudies-DocomoInnovations,VodafoneIncubation&Ventures-ChristinaKu-InvestmentDirector,DocomoInnovations(NTTDocomosubsidiary);FormerInvestmentProfessional,VodafoneIncubation&Ventures,IntelCapital,TriplePointCapitalandSiliconValleyBankventuredebtgroup............................................73

ThoughtsonStrings-AttachedFunding&InvestingIn-KindResources-AndrewRomans 81

CaseStudy-OJSC“Rostelecom”-NikolayDmitriev-FormerCVCManagingDirector;Partner,VITAVentures.............................................................................................83

CaseStudy–LegendHoldings–SamanFarid,FormerVicePresidentInvestments&DirectorofSiliconValleyOffice,LegendStar联∑Q§ß¨P;ManagingDirector,CometLabs 84

CaseStudies-TelecomItalia&Fininvest-MauroPretolani-SeniorInvestmentAdvisor,FondoItalianod’Investiment,aVentureCapitalFundofFunds.............86

CaseStudy-MerckVentures-RoelBulthuis-SeniorVicePresident&ManagingDirector.............................................................................90

CaseStudies-GoogleVentures,IDGVentures&MTG-AnilHansjee-FormerHead,Google’sEuropean&IsraeliStrategicInvestmentandCorporateDevelopmentPrograms;Former

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CVC,IDGVenturesandMTGSverigeModernTimesGroup;Cofounder&Investor,MojoCapitalFundofFunds................................................................................................93

CaseStudies-MiddleEast,NorthAfrica&Turkey(MENAT)-HowCorporates,FamilyOfficesandSovereignWealthFundsCreateCvcs-OzanSonmez-StartupAcceleratorsHead,KingAbdullahUniversityofScience&Technology(KAUST)SaudiArabia 96

CaseStudy-MicrosoftVentures&MicrosoftAccelerators-RahulSood-Founder;CEO,Unikrn 109

Chapter3-Accelerators&IncubatorsandOtherEcosystemOptionsforCorporates113

CaseStudy-CitrixStartupAccelerator-MichaelHarries,CofounderandChiefTechnologistofCitrixStartupAccelerator............................................................................................116

CaseStudy-SiliconCatalyst-RickLazansky-Cofounder&ManagingPartner;BoardDirector,SandHillAngels.................................................................................120

CaseStudy-TechstarsCorporateAccelerators-BradFeld-Author&ManagingDirector,FoundryGroup............................................................................................................124

CaseStudy-TechStarsandtheDisneyTechStarsAccelerator-DavidCohen-Founder,CEO&ManagingPartner,TechStars..........................................................................................125

SponsoringIncubators&Accelerators-VictorPascucciIII,Founder&FormerHeadofUSAAVentures&HeadofCorporateDevelopment................................................127

ConclusionsonAcceleratorsandIncubators-AndrewRomans.................127

Chapter4-CVCInvestinginOtherVCfunds–FundofFunds(FoF) 129WhyFundofFunds(FoF)MakeSenseforCorporates,StartupsandVCs-JohnFrankel,Partner,ffVentureCapital.....................................................................................129

FundofFunds(FoF)istheFirstStep,DirectCVCInvestingComesNext–AndrewRomans 131

CVCsSpinningOfftoGP-LP,BecomingIndependentandRebranding–AndrewRomans 134

CaseStudy-NovelltoPelionVentures-BlakeModersitzki-ManagingDirector,PelionVentures;Cofounder&ManagingDirector,NovellVentures.................138

Chapter5-Advice&BestPracticesforCorporateVenturingRelatedtoCVCs,Entrepreneurs&FinancialVCs.....................................140

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TimDraper’sthoughtsonCVC–CofounderofDFJ,DraperAssociatesandDraperUniversity 140

BradFeld’sThoughtsonCVC-Author&ManagingDirector,FoundryGroup;Cofounder,TechStars141

TheDisappointmentofCorporateVC-TomFogarty,InventoroftheBalloonCatheterand165MedicalPatents;FounderoftheFogartyInstituteforInnovation;ProlificInvestor 144

CorporatesMustAdjusttoLevelofStartupSpeed-Anonymous,ManagingDirector,LargeJapaneseCVCactiveinJapanandSiliconValley.............................................146

Anonymous,FinancialVCactiveintheSiliconValley...............................146

FredWilson’sFamousQuoteonWhyCVCsSuck–FredWilson,Founder&ManagingPartneratUnionSquareVenturesandFlatironPartners.........................................148

AdviceonHowtoStructureyourCVCDealsoYouCanOptimizeforyourExit-GauravBhasin,ManagingDirector,TechnologyInvestmentBanking,PagemillPartners,aDivisionofDuffandPhelpsSecurities,LLC.....................................................................................149

ConsideringRightofFirstNegotiationandRightofFirstNoticeWhenNegotiatingCVCFunding-CurtisMo-Partner,DLAPiper........................................................151

BestPracticesforFormingNewCVCs-ArmandoCastro,Jr.-Partner,PillsburyWinthropShawPittmanLLP.....................................................................................................152

CVCandClientDealStructureDelivery-MatthewMyers-SeniorExecutive,BNPParibasBankingGroup,ResponsibleforinternationalCVCtransactions.........153

Romans’ThoughtsonSectorFocusorBroadFocus..................................155

HowCanCVCAddValuetoJapaneseCorporations?-IanMyers-CorporateAdvisory,SumitomoMitsuiBankingCorporation;StanfordUniversityMastersGraduate;Author,“CorporateVentureCapitalandSiliconValley:CreatingInnovationforJapaneseFirms”(June2015);FormerIntern,WorldInnovationLabs–WiL...............................................156

WheretolocatetheCVCofficewithinSiliconValley–AndrewRomans165

IntelCapital’sSaleof$1bnofPortfolioAssets–AndrewRomans..............165

USandOtherGovernmentVCFunds–AndrewRomans.........................166

RubiconLimitedPartner–in–ResidenceProgram(LP-IR)–AndrewRomans 168

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Chapter6-WarStoriesfromCEOs,FoundersandVCs–TheGood,theBad&theUgly 172

NeverTurnDownaSmartStrategicInvestor-KennyHawk-FormerCEO,Ubidyne;CurrentCEO,Mojio;SerialEntrepreneurwithIPO&M&Aexits..............................175

HavingaCorporateVCasInvestorANDLargestCustomer-JacobBrattingPedersen-Partner,Northcap......................................................................................................177

HowWeTurnedaBadROFO&ROFRintoaWin–EricElfman,Founder&CEOatOnit,Inc.,Founder&CEO,DataCert,Inc...............................................................................178

TRUECar-VictorPascucciIII-Founder&FormerHead,USAAVenturesandHeadofCorporateDevelopment.........................................................................................179

MedicalPerspectiveWhereDealsIncreasinglyRequireaCorporatetoGetDoneatAll-PeterRule-Chairman&CEO,OptiScanBiomedical,Inc......................................179

WhattoDowhenCVCMoneyComesKnocking?-TomNicholson-CEO,NicholsonNY(AcquiredbyIconMedialabAB);Chairman&CEO,LBiInternational;FoundingMember,AngelRoundCapital(ARC)Fund........................................................................181

ProvidingaCEOofTheirOwnGaveThemtheBestDueDiligencePossible-BartWürman-CEO,DDFVentures;FormerCEO,AMPharma;FormerCEO,LanthioPharma 183

TheConceptofTimeHasDifferentMeaningsforCorporatesandStartups-MoritzvonPlate-CEO,CassantecAG.....................................................................................................184

TheClassicCVCWarStory-AndrewRomans..............................................185

Chapter7-HowtoGetFundedbyCorporateVCs..............187WhatShouldYouKnowWhenConsideringTakingMoneyfromaCorporateInvestor?-WilliamKilmer-FormerHead,IntelCapitalEMEA;OperatingPartner,MercatoPartners;Founder&CEO,PublicEngines...........................................................................187

HowtoApproachCVCsandWin-IgorShoifot-Partner,TMTInvestments;AdjunctProfessor,UCBerkeley,UCSanFrancisco&NYU...............................................................192

HowtoApproachaLargeCorporate–TheDifferenceforEuropeanvsUSDomiciledEntrepreneurs-FrédéricRombaut-FormerManagingDirector&HeadofCorporateDevelopmentInternational,CiscoSystems;FormerFounder&ManagingDirector,QualcommVenturesEurope;FormerApaxPartners;Cofounder,BouyguesTelecom;Founder-in-Residence,FoundersFactory.....................................................195

TheBestWaytoEmailaVCorCVCWhenSeekingFunding–AndrewRomans 197

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Chapter8-CorporateVenturingBytheNumbers–AnandSanwal&JonathanSherry,cofoundersofCBInsights.........................200

Chapter9-TheFutureofCVC–RecommendationsandConclusionsfortheBestCorporateVenturingPrograms.......................................216Afterword–AndrewRomans....................................................231

AlsobytheAuthorTheEntrepreneurialBibletoVentureCapital,InsideSecretsfromtheLeadersintheStartupGame.................................................................................233

AbouttheAuthor.......................................................................................................235

Acknowledgments.........................................................................237Index..................................................................................................239

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Chapter1.Motivation&Goals-WhyCorporatesEstablishCVCGroups“In business, what’s dangerous is not to evolve.” - Jeff Bezos, Founder & CEO,Amazon.comDriving forcesmotivating largeandmid-sizedcorporates toestablishandoperateCVCprogramsareasvariedasthecorporatesthemselves.Manyoftheirmotivationsareexploredintheirownwordsinthe50+CaseStudiesandWarStoriesthatfollow.But here is a cheat sheet of some common goals that appear over and over.Achieving any one of these goals could justify a corporate’s entire investment tocreateormaintainaCVCprogram.Thinkofthislistof“Chapter1Goals”asamind-joggertostartyourownthoughtsspinningtoclarifyyourowngoalsinenteringthecorporateventuringworld.So,innoparticularorder:

• Reach outside the corporate to bring innovation into the corporate fromthoseinnovatingmoresuccessfullyoutside.

• Access business intelligence and innovation in order to understandtechnologies, business models and trends that impact core and peripheralbusinesses.Manycorporates call this technology scouting.Thisactivity canbeviewedbothasoffenseanddefense.

• Identify partnerships with technology startups where the corporate canbecome a customer of the startup, partner with the startup to put thestartup’sproductsorservicesinthehandsofthecorporate’ssalesforce,findout if the corporate’s customers are interested in what the startup has toofferandbringmorevaluetothosecustomers.Thisallspells“driveoverallrevenue.”

• Strengthen strategy decisions with Silicon Valley and global innovationintelligence.

• Licensetechnology.• Createapipelineofinvestmentopportunitiesforthecorporateviamatureor

nascent corporate venturingprogramsallowing fordirect investments thatpresentstrategicandfinancialreturn.

• Createapipelineofacquisitionsforthecorporatedevelopmentgroupwithalong-term goal of creating new lines of business that will generate billiondollarrecurringrevenuestreams,whilediversifyingthecorporate’sproductandserviceportfolioforlong-termsurvival.

• Playdefense.Divide“hedge”investmentopportunitiesintotechnologiesandbusinessesthatthreatenthecorporate’scoreorperipheralbusinesses.Suchhedgescanprotectacorporatefromdecliningbusinesslinesandprotectthecorporatefrombecomingobsolete,impactedbytrendssuchastheInternet,smartphones, IoT and the shared economy. Protect your core&peripheralbusinessfromdisruption(TaxiindustryfromUber,BlockbusterfromNetflix,Yahoo!fromGoogleandFacebook).

• Createopportunities for the corporate tobenefit fromequityownership inearly stage and/or growth stage startups,where the corporatewill enable

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these startups to grow their sales rapidly and become very valuablecompanies.Ifthecorporateenablesacompanytogrowtotensorhundredsofmillionsofdollars in revenueasa resultofpartneringwitha corporate,thatcorporatemayaswellownasignificantequitypositionandtakepartofthefinancialgainithelpstocreate.

• Bringtheentrepreneurialcultureanddynamicenergyfromthestartupandventureworldbackintothecorporateculture.

• Develop new entrepreneurial skill sets in executives that can join internalCVC programs to foster intrapreneurship, commercialize internallydevelopedtechnologyandspinoutnewbusinesses.

• Create a single repository to capture all internal startup ideas and connecttheCVCgrouptoseniormanagementandbacktoheadsofBusinessUnits.

• Create a PR image for the public, demonstrating that the corporate isinnovativeandhiptoworkfor,buyfromordobusinesswith.

• Access human capital.Many of the best graduates from top schools donotwanttoworkatabigcorporateandgointostartups.UseCVCtoaccessthispartof the talentpoolandthegrowingpercentageofpatentsregisteredbythiscrosssectionofthehumanmarket.

• InfluenceyourHRgrouptobetterknowwhichkindofpeopletohire.• Increasethequalityoflifeforthecorporate’semployees.• Lowerattritionratesandthecostofhiringandtrainingnewreplacements.• Increasethecorporate’srevenues.• Increasethecorporate’sefficiencyandlowercostsbyadoptingtechnologyor

becomingacustomerofsomeofyourportfoliocompanies.• Increasethecorporate’scompetitiveness.• Enternewmarketsordefendexistingmarkets.• Use cash from revenues in foreign currencies to invest in those countries,

capitalize on local tax schemes; or negotiate new favorable tax deals withlocalgovernments.ImproveyourPRimageinthosecountries.

• Use CVC as a method of establishing offices and operations in differentcountries and tech corridors, driving globalization of the corporate as anorganization.

• Access innovation from key tech corridors like Silicon Valley, Israel, NewYork,London,Chinaandbeyond.Donotmisswhat’shappeninginthesehotzones,butfindinnovationinadditionallocations.

• Expandproductandserviceofferings.• Focuson long-termproductandservice innovation.UseCVCtocombat the

short-termquarterlyresultsmindsetthatplaguespubliclytradedcompanies.• Leveragedistributionnetworkstosellmoreoraddnewrevenuestreams.• Fitintoa“build,partner,buy”strategy.• Replaceoraugmentthecorporate’sR&D.InvestsomeoftheR&Dbudgetina

portfolio of startups alongside top VCs, with the expectation of making aprofitafterafewyears,makingthisa“zerocostR&Dprogram.”

• Consider some innovation tobe internal and some tobe external. CVCandcorporatedevelopmentaccessexternalinnovation.

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• Outsource part of your R&D program, breaking free of its limitations. It’shardtothinkoutsideoftheboxwhenyouareinacubicle.

• ValuebeingpartoftheVC-entrepreneurship-startupecosystem.• Develop ecosystems around products or platforms operated by the

corporate.E.g.,SalesForce.cominvestinginstartupsthatuseForce.com.• ExploitdomainexpertisetomakesmartinvestmentsE.g.,Yahoo!investingin

AlibabaandYahoo!Japan.• MakeafinancialreturntoensuretheCVCprogramissustainable.• IncreaseEarningsPerShare(EPS).• Makeafinancialreturnforthesakeofmakingafinancialreturn.Ifyoucreate

valueforstartupswhynotownsomeofthemtobenefitfromsuccesscreatedbycorporate.CVCdonerightcanoutperformmostfinancialVCs.

IencourageeveryCVCorcorporateconsidering formingaCVC towriteyourownlistoftopgoalsandobjectivesforplayinginthecorporateventuringspace.StartbygettingyourCEO,CFO,HeadofCorporateDevelopment,HeadofStrategyandothertopexecutives to sign theirnames toadocument thatoutlines the topprioritizedobjectives.Icanhearthescreamsofsomeofmyreadersathowhardthiswouldbeto achieve, but for some it is possible, especially if it is the CEO driving the CVCinitiative.Afteryouhaveagreedonthis,useyourlistofwrittenobjectivestodrivealldecision-makingonyourstrategyandstructurefortheCVCunit’soperation.Youmayneedtoreferbacktothislistifyouseethingsslippingofftherails.MostCVCsevolve rapidly and also suffer fromhigh turnover of investment professionals. Asyoureadthroughtherestof thisbook, trytotieyourdecisionsbacktothis listofgoals customized for your own use. Give special care to how you structure theinterplaybetweenCVCandcorporatedevelopment(M&A).

Corporate R&D Must be Reinvented as CVC Ushering in a New Era for CorporateVentureCapital-IgorSill-ManagingDirector,GenevaVentureGroup Igor Sill was kind enough to contribute this excellent overview of the case forcorporates participating in the venture game.He coachedme, conveying decades ofexperience as an angel, VC and Fund of Funds investor. Igor is not only ManagingDirector of Geneva Venture Group, he is also a Silicon Valley venture capitalist andfounderofGenevaVenturePartners. Igormanageshisownangel investmentfundatGenevaVenturesandisalsoaLimitedPartnerinGoldmanSachsInvestmentPartners,Benchmark Capital, Norwest Ventures, Granite Ventures, The Endowment Fund andICOFunds throughhisFamilyOffice.Afterachievingextraordinarysuccess inSiliconValleyyouaremostlikelytofindIgoronhisterracedcabernetsauvignonvineyardinStHelena,Napa,California.InIgor’sownwords:ItwouldappearthatUSinnovationhasneverbeenbrighter.Globalcorporationsarespending in excess of $650bn on R&D annually, most of it on technologyadvancements. The top technology R&D expenditures are from worldwide

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corporate giants including Samsung ($13.8bn), VW ($13.5bn), Intel ($10.6bn),Microsoft($10.4bn),Roche($10bn),Novartis($9.9bn),Toyota($9.1bn),Johnson&Johnson ($8.2bn), Google ($8bn), Merck ($7.5bn), IBM ($6.2bn), Cisco ($5.9bn),Oracle ($5.2bn), APPLE ($4.4bn) and HP ($3.5bn), representing a cumulativeincreaseof$9bnoverthepreviousyear,accordingtoFortunemagazine.This outdated R&Dmodel of the industrial organization that progresses throughinternal lab development has been eclipsed by the reality of new, venture capitalbackedstartupsthatachievefargreatercompetitiveadvantagethroughrapidcyclesof innovation, customer acceptance and global distribution. IBM accounted for$6.2bnofR&D,whichironicallyexceededalloftheannualventurecapitalindustry'sinvestments made. Over this past decade, the rate of technology innovation hasrapidly accelerated, challenging those Corporations' ability to maintain acompetitive edge. Corporate R&D executives lie awake at nightworried that theymay be blindsided by innovative technologies they’re not aware exist. Thetechnology innovations and investment returns are obvious, venture-backedtechnologycompanieshaveconsistentlyexceededeverycorporateR&Doutcome.Today'scorporateR&Disnolongerasimplematterofnewproductintroduction,ormerely adapting to the new technology realities. Instead, it has become a keenlystrategicprocessthatutilizesallavailableresources.CorporateR&Disrealizingthattheymustpartnerwithoutsideventuresinordertostayaheadofthegame.Corporateinvestmentsintechstartupsaregrowingatanincreasedpace,accordingto the National Venture Capital Association. These corporations are eager tooptimize Silicon Valley's technology, innovations and talents into their R&Dambitions.I've noted an interesting trend in the number ofmulti-national corporations nowopening up business development offices to capture access to the explosion ofstartupsandthepaceatwhichthesedealsarehappening.Of foremost interest to these corporations is venture capital's emergence as anexemplaryfinancialenginefortheexplosivegrowthofadvancednewtechnologiesthatarechangingtheworldwhilecreatingentirelynewindustries.Thereasonsforventurecapital'ssuccessesaremany.Theventurestructureencouragesinnovationand gives entrepreneurs the tools they need to create, develop and launch theirinnovative ideasglobally. Inperiodsof lowgrowthandhighstrategicuncertainty,ventureinvestmentscanserveaverydistinctivelyvaluablebusinessobjective.Itcanbearichsourceof technologicaladvantageand informationaboutpotentialtransformations in the companies’ core businesses. The more establishedcorporationsareincreasinglydependentoninnovativenewtechnologiesinordertoremain competitive, thus it would seem natural to incorporate a venture capitalmodel for a portion of technology development. This approach exploits venturecapital's efficiency in developing technology, its access to new advancements, its

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capacitytorespondquicklytochangingtechnology,itsabilitytoleverageadditionalresourcesthroughoutthedevelopmentcycleallwhilereturningfavorablefinancialreturns. A corporate venture arm can also serve as an intelligence-gatheringinitiative,helpingacompanyprotectitselffromemergingcompetitivethreats.Also,these corporationsuse theirventure capitalnetwork toexplore sectorsof longer-termstrategicinterest.Corporateventuringcanprovidebothaninsidelookatnewdevelopmentsaswellasaccesstopossibleownership,jointventures,licensinganduseofnewideas,respondingrapidlytomarketshiftsanddemands.Ascompetitionintensifies and uncertainty increases, corporate venture can open new strategicavenuesandoptions.Suchanapproachhasproven successful for companies suchasApple, SalesForce,HP,Facebook,Oracle,Dell,EMC,Google,Cisco,aswellasothertechnology-focusedcompanies.BycombiningitsowncapitalwiththatofindependentVCs,acorporateventurearmcan magnify the impact of its investments. This is particularly beneficial whentechnologicaluncertaintyishigh. Inthefinancialservicessectorforexample,VISAelectedtoinvestinSquare,amobile-paymentstartupwhosetechnologytransformssmartphonesandtabletsintocreditcardpaymentreaders.Another excellent example is Apple’s iFund, supported by Apple and launched in2008 by the venture capital fund, Kleiner Perkins Caufield & Byers. The iFundprovides a very unique leverage; it encourages development of technologies thatrelyontheApple’splatform,furtherincreasingdemandforitsownproducts.AsofSeptember 2015, Apple has acquired over 70 companieswhile building a criticalmassofinnovativeapplicationsforitsiPhoneandiPadproducts.Thisapproach,aswell as Apple’s demanding culture, helped it achieve one of the fastest growthtrajectoriesandlargestmarketcapitalizationsofanypublictradedcompany.Giventhissuccess,itisnotsurprisingthatothershaveinitiatedventureinvestments.GettingintheventureinvestmentgameThe decision making process of forming a corporate venture arm, co-investingalongside venture firms or engaging a corporate venture investment partner is acriticalone.Forpurposesofthisbook,Iamassumingthatmanycorporationshavealreadyrecognizedthemanypitfallsofstaffingacorporateventurearm,andhavelongsinceabandonedthatpath.Ofcourse,I'llexcludeIntelCapital,whichstandsoutasananomalyhavingdevelopedauniquecultureandsuccessfully intertwined itsventurerelationships.Decidingbetweendirectstartup investment,venturecapitalfund investment,or themoreconservativecorporateventurepartnerpathshouldentailagreatdealof researchandmost importantly, compatibilitywithyour longterm strategy.Mature corporations are balancing their R&D exposure by fundingsome of their technology development through partnershipswith venture capitalteams.

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Location,Location,LocationThough there are bright pockets of venture activity globally, the epicenter ofpremiertechnologyinnovationandtalentcontinuestoemergefromSiliconValley.This is a unique placewith a supportive ecosystem ready to back entrepreneurs'requirements for launching startups successfully. The weather is excellent, thelifestyle iswonderful, and thesceneryexquisite. StanfordUniversity,UCBerkeley,USFandUniversityofSantaClaraprovideanabundanceofresearchandcontinuallyspin off new patents along with a steady flow of budding intellectual,entrepreneurially driven graduates. Hence, 80% of venture capital and angelinvestorsoperateinSiliconValley;and,notsurprisingly,90%ofthehighestventurereturnsoccurhere.Globalcompaniesbringagreatdealofvaluetothestartupstheyfundintheformofbrandreputation,skills,andofcourse,deepresources—fromavastcustomerbase,globaldistributionchannels toarmiesofsalesprofessionals.Theyalsochange theperceptionofhowoutsideinvestorsviewstartups’prospects.Institutionalinvestorsoftenanticipatethatacorporate-backedstartupwillultimatelybeacquiredbythatcompany,andgenerallyatamuchhighervaluation,reflectingthestrategicbenefitsthatstartupscanofferitscorporateinvestors.There exists a massive market with a strong rising tide for optimizing this newcorporateR&Dparadigm,onewithincreasedefficienciesandfarbetterresults.Theopportunities of advanced innovations, globalization and the internet's disruptivenaturemakeitaperiodofsignificanttransformationthatiscreatingextraordinarycorporatevalue.CompaniesasdiverseasBMW,Volvo,GE,GM,NovartisandGeneralMills arenowcomplementing their traditionalR&Dby joiningwithother ventureinvestors to fund promising, strategically aligned startups. The logic is indeedcompelling.Giventhebenefitsthatventureinvestingprovides,therealquestioniswhethercorporationscanaffordnottoparticipate.Inaneconomywhereinnovationspellsthedifferencebetweensuccessandfailure,corporateventuringcansecureitsfuturecompetitiveness.

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Contributors&Interviewees

• Gaurav Bhasin, Managing Director, Technology Investment Banking,PagemillPartners,aDivisionofDuffandPhelpsSecurities,LLC

• RoelBulthuis,Founder&Head,MerckSeronoVentures• ArmandoCastro,Jr,Partner,PillsburyWinthropShawPittmanLLP• DavidCohen,Founder&ManagingPartner,TechStarsandDisneyTechStars

Accelerator• Nikolay Dmitriev, Former CVC Managing Director, OJSC “Rostelecom”;

PartnerVITAVENTURES• TimDraper,Cofounder,DFJ,DraperAssociatesandDraperUniversity• MaxDufour,PartnerTechnology&Strategy,Harmeda• EricElfman,Founder&CEO,Onit• SamanFarid,VicePresidentInvestments&DirectorofSiliconValleyOffice,

LegendStar 想之星(LegendHoldings);ManagingDirector,CometLabs• Brad Feld, Author &Managing Director, Foundry Group; author, “Venture

Deals”andfiveotherVentureCapitalbooks• J. Skyler Fernandes, Founder&ManagingDirector, SimonVentureGroup

(SVG)• Tom Fogarty, Inventor of the Balloon Catheter and 165 Medical Patents;

Founder,FogartyInstituteforInnovation;prolificinvestor• JohnFrankel,Cofounder&Partner,ffVentureCapital• Matthew Growney, Former Cofounder & Managing Director, Motorola

Ventures;CEO,IssabellaProducts• AnilHansjee,FormerHeadGoogle'sEuropean&IsraeliStrategicInvestment

and Corporate Development Programs; Former CVC, IDG Ventures, MTGSverigeModernTimesGroup; Partner& Co-Investor,Mojo Capital Fund ofFunds

• MichaelHarries,Cofounder&ChiefTechnologist,CitrixStartupAccelerator• KennyHawk,CEO,Mojio;CVC-backedSerialEntrepreneur• David Horowitz, Former Partner, Comcast Ventures; Founder & CEO,

TouchdownVentures• Villi Iltchev, Partner, August Capital; Former Director & CoFounder,

SalesForceVentures;SVPStrategy&CorporateDevelopment,Box• William Kilmer, Former Head of Intel Capital EMEA; Operating Partner,

MercatoPartners;Founder&CEO,PublicEngines• MitchKitamura,Cofounder&ManagingDirector,DraperNexus• Christina Ku, Investment Director, DOCOMO Innovations (NTT Docomo

subsidiary); former investment professional, Vodafone Incubation &Ventures, Intel Capital, TriplePoint Capital and Silicon Valley Bank venturedebtgroup

• JonasLandstrom,USAManagingDirector,VolvoVentures• PärLange,Founder&InvestmentOfficer,SwisscomVentures

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• Rick Lazansky, Cofounder & Managing Partner, Silicon Catalyst; BoardDirector,SandHillAngels

• JackLeeney,USHeadofInvesting,TelefónicaVentures• SureshMadhavan,InvestmentManager,VerizonVentures• CurtisMo,Partner,DLAPiper• Blake Modersitzki, Managing Director, Pelion Ventures; Cofounder &

ManagingDirector,NovellVentures• Claudia FanMunce –Cofounder& formerManagingDirector, IBMCapital

Group; VP, IBM Corporate Development; Venture Advisor, New EnterpriseAssociates(NEA)

• MatthewMyers,SeniorExecutive,BNPParibasBankingGroup,responsibleforinternationalCVCtransactions

• TomNicholson,CEO,NicholsonNY(acquiredbyIconMedialabAB),Chairman&CEO,LBiInternational;FoundingMember,AngelRoundCapital(ARC)

• Victor Pascucci III, Former Founder & Head, USAA Ventures and Head,CorporateDevelopment

• JacobBrattingPedersen,Partner,NorthcapAB• Mark Platshon, Senior Advisor, BMW i-Ventures; Managing Director,

IcebreakerVentures• MauroPretolani,SeniorInvestmentAdvisor,FondoItalianod'Investiment,

aVentureCapitalFundofFunds;SeniorAdvisor,TelecomItalia&Fininvest• Frédéric Rombaut, former Managing Director & Head of Corporate

Development International, Cisco Systems; former Founder & ManagingDirector, Qualcomm Ventures Europe; former Apax Partners; Cofounder,BouyguesTelecom;Founder-in-Residence,FoundersFactory

• PeterRule,Chairman&CEO,OptiScanBiomedical,Inc.• AnandSanwal,CEO&Cofounder,CBInsights• JonathanSherry,Cofounder,CBInsights• Igor Shoifot,Partner,TMT Investments;Chairman,HappyFarm Incubator;

Cofounder,Fotki;adjunctprofessor,UCBerkeley,UCSanFranciscoandNYU• Igor Sill, Managing Director, Geneva Venture Group; Founder, Geneva

Venture Partners; through his Family Office, Limited Partner in GoldmanSachs Investment Partners, Benchmark Capital, Norwest Ventures, GraniteVentures,TheEndowmentFundandICOFunds

• Ozan Sonmez, Head, New Ventures Startup Accelerator and Hikmah IPAccelerator, King Abdullah University of Science & Technology (KAUST)SaudiArabia

• Rahul Sood, Founder, Microsoft Ventures and Microsoft’s network ofAccelerators;CEO,Unirkn

• MasatoshiUeno,SeniorManager,AGCVentures(AsahiGlassAmerica)• Sita Vasan, CEO, Ernst& Young SVG Solutions; former senior exec, Silicon

ValleyBank;12.5yearveteranInvestmentDirector,IntelCapital• AlexWang,VicePresident,Strategy&CorporateDevelopment,VMware

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• Fred Wilson, Founder & Managing Partner, Union Square Ventures andFlatironPartners

• Bart Würman, CEO, DDF Ventures; former CEO, AM Pharma and LanthioPharma

• Jack Young, Head, Venture Capital, Deutsche Telekom Capital Partners;formerHead,QualcommLifeFund;GeneralPartner,dRxCapitalAG

• Patrick de Zeeuw, Cofounder, Startupbootcamp Global; Cofounder,InnoLeaps.com,theAcceleratorforCorporates

• Anonymous,FinancialVCactiveinSiliconValley• Anonymous, Managing Director, large Japanese CVC active in Japan and

SiliconValley

FindMastersofCorporateVentureCapitalonAmazon:https://goo.gl/xWXKZEorsearchamazonfor“MastersofCorporateVentureCapital”or“AndrewRomans”

JapanesetranslationcominginSeptemberviaDiamondPulbishing.

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SeekingpublishersforSpanishandPortuguese.

AlsobytheAuthor

TheEntrepreneurialBibletoVentureCapital,InsideSecretsfromtheLeadersintheStartupGame

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Ø Publishedby:McGrawHill(English)MachineryIndustryPress(Chinese)Alpina(Russian)

English:http://amzn.com/0071830359Chinese:http://goo.gl/XNOkHYRussian:http://www.alpinabook.ru/catalogue/2401616/

Ø AvailablefromAmazon,Apple,andmanybookstores

Ø ReadafreechapteronM&Acontaininginterviewswithdirectorsof

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exit-2/orshorterURL:http://goo.gl/9Kp25I

Join us at our VC events in the real world to discuss CVC andmany other VC andstartuprelatedtopicswithpanelsofleadingexperts:http://rubicon.vc/our-events/Nextevents:London,June27,2017https://FamilyOfficeLondon.eventbrite.com-LondonFamilyOfficeeventLondon,June28,2017https://CVCseminar.eventbrite.com-LondonhalfdayCVCseminarParis,June29,2017https://ParisCVC.eventbrite.com-ParishalfdayCVCseminar