What are CVCs Looking For Right Now?
Author: Eran Savir, Managing Director at Intango Ventures
From the early days of the COVID-19 outbreak, I urged our portfolio companies’ founders and all the entrepreneurs I advise, to look for new opportunities, having used the term: “never waste a good crisis”. A famous quote of Alexander Graham Bell says: “When one door closes another door opens; but we so often look so long and so regretfully upon the closed door, that we do not see the ones which open for us”. To put things in perspective, some of the greatest companies we know today were founded by great founders during the 2008/2009 subprime crisis, including: Airbnb, Uber, Whatsapp, Groupon, Pinterest, Stripe, Github and others. Those founders saw an opportunity in the financial crisis and disrupted their industry completely, building large, market leader companies.
What are Strategically Motivated CVCs and what are they looking for?
Organizations turn to Open Innovation to save themselves from being completely disrupted by startups as nobody wants to be the next Nokia, Blockbuster or Blackberry. The term Open Innovation means a situation where an organisation doesn’t just rely on their own internal knowledge, sources and resources for innovation but also uses multiple external sources to drive innovation. A Corporate VC (CVC) is one of the most forward-thinking ways to put the approach of Corporate Open Innovation into action.
While no investor likes to lose their money, Strategically Motivated CVCs such as Intango Ventures and others (as opposed to Financially Motivated CVCs and VCs) are thinking differently about investment. One of the Strategically Motivated CVCs investment motivations is to stay close to emerging trends and bring in required technologies, products and talents. This strategy becomes even more important in times of tectonic shifts in the industry, such as the global economic meltdown we have been experiencing in these last few months.
Corporates are like huge aircraft carriers that find it hard to change course. With a CVC, the large aircraft carrier is now operating small and easy-to-maneuver vessels who can quite quickly explore the unknown waters. In other words, one of the corporate’s main advantages of running a CVC is its ability to get early access to new and emerging trends, by working with startups.
For the startups, the main advantages of raising money from a CVC is that CVCs not only provide monetary support, but also provide access to customers and partners, thus expediting the Go-To-Market process and the speed of getting to product/market fit.
Especially in times of major changes in the industry, CVCs are expecting to meet startups that have quickly adapted to the new norm and can shed some light on new trends and emerging opportunities.
Eran Savir is the Managing Director at Intango Ventures, a Corporate VC (CVC) that invests in early stage Digital Marketing, Advertising Technology and D2C startups. Eran is a tech entrepreneur who founded three companies and sold two. He has extensive hands-on experience as an investor, board member, founder and CEO and has a proven track record in successfully defining and launching innovative and disruptive products and large-scale cloud SaaS solutions. Eran has a technical background as a developer and has two registered patents under his belt.