European Corporate Innovation Power Breakfast Roundup: The Insider Perspective into European CVCs

On September 4, Cleantech GroupSilicon Valley Bank, and Wilson Sonsini Goodrich & Rosati co-hosted a Power Breakfast focused on European Corporate Innovation Opportunities. Kicking off the discussion with insights into global trends of European corporate partnerships with cleantech start-ups, representatives from BASF and E.ON presented on their respective investment strategies and processes. Questions followed from the 25 start-ups, investors, and corporates in attendance, with topics ranging from the specifics of the European market to the health of cleantech in Europe. Ultimately, the conversation often came back to the intricacies of navigating the CVC structure and cultivating valuable strategic partners.

Why Europe?  Europe is thirsty for innovation and sustainability has a strong public and political mandate in Europe. Accordingly, cleantech remains a target sector for corporates that seek to have a positive impact on both the bottom line and the environment. While Europe was the central focus of the breakfast, the topics discussed also provided insight into the intricacies of the general corporate partnership ecosystem. Key takeaways from the event were:

  • Slow process and long-odds. Forming partnerships can take anywhere from six months to two years! Part of this is due to the long process needed to qualify a deal, including:
    • a collective evaluation of hundreds of companies
    • a brief evaluation of the top targets
    • deeper due diligence, driving business unit buy-in
    • finally, the negotiations leading up to the actual investment, with the goal of a small handful of deals per year
  • Challenges: Strategic fit and internal championship are crucial to getting a deal done. The former is all about finding specific solutions to key problems. This often requires the CVC team to play the role of therapist to members of various business units so that they can get deep insight into their pain points. However, this must be done with diplomacy as external innovation solutions are often disruptive to business-as-usual. Consequently, the CVC must leverage human relationships, over time, to scope problems and gradually build internal champions in BUs.
  • Immense Value: The truth is that European corporates and American corporates alike are yearning for external innovation that responds to their sustainability mandates, while also having a positive effect on their bottom lines. When the right strategic fit is found, you may very well see a fortune 500 company partnering with a seed-stage start-up for a seemingly minuscule pilot project.

In short, the right strategic fit is never too small for the corporate. Nor is it ever meaningless for the partnering start-up. At face value, partnerships generate revenue and demonstrate traction to potential partners and investors. But the real value is more abstract: they offer significant opportunities for market access, scaling, and the opportunity to gain industry perspective.

Ultimately, the dynamic dialogue at the European Corporate Innovation Opportunity breakfast reinforced CTG’s understanding that: CVCs and innovative start-ups can be mutually beneficial allies. We see our mission as helping the world’s largest corporations effectively source sustainable innovation, while providing immense value to both large and small companies.

Events such this power breakfast are just one of the ways that we put our mission into action –placing start-ups of all sizes across the table from decision makers at top investor and corporate venture units. If you’re interested in other Cleantech Group events focused on Europe, be sure to check out our annual gathering of the pan-European innovation community at the Cleanteach Forum Europe in Florence, Italy. Save the date (April 27-29, 2015) and register your interest to be notified when registration opens. To see a complete list of our upcoming events, click here.

If you’re looking for other ways to connect with innovation, check out our i3 market intelligence platform. i3 subscribers rely on i3 to find and vet start-ups, efficiently building and managing a pipeline of external innovation targets, and connecting directly with start-ups’ decision-makers.