Kurt Kaltenegger of ABB proposes sustainable art of corporate venturing
Ecosummit TV: Kurt Kaltenegger is CTO of ABB Technology Ventures which did 11 cleantech investments since it was founded 2.5 years ago. ABB’s corporate VC (CVC) approach combines strategic and financial goals when investing in startups that have innovative technologies ABB can use for new business. Now Kurt challenges his fellow VCs to reconsider their current investment strategies by implementing a new symbiosis between VCs and CVCs. Kurt believes that corporates like ABB bring so much expertise and added value to the table that valuations should be lower for them. That’s a cool way to start a negotiation with the startup CEO and her existing investors.
Corporates have global sales and manufacturing capabilities that are necessary for scaling cleantech. External innovation is a success factor for corporates and they want to participate in startup value creation from the beginning. Thus more and more corporates are starting their own CVC business. Sometimes they invest in VC funds to have a foot in the door. ABB Technology Ventures, for example, is limited partner (LP) of Emerald Technology Ventures. Minimum LP ticket size for corporates in Emerald’s fund is €5M.
I personally believe that the startup process has to be accelerated resulting in faster exits and that corporates play a major role in the future of the industry. However, corporates often move rather slowly and need to be accelerated, too. VCs should court corporates more actively to become LPs of their funds. VCs should also be more open-minded and act more long-term when co-investing along with corporate VC funds. The key question is whether startups with corporate VCs produce higher returns for all direct and indirect investors. And here I think the jury is still out. Watch Kurt’s statements and join this discussion about the sustainable art of corporate venturing. Your ideas and experience are welcome!
Tags: ABB, ABB Technology Ventures, Automation, Berlin, Cleantech, Corporate, Corporate VC, Corporate Venture Capital, ECO12, Ecosummit 2012, Ecosummit TV, Emerald Technology Ventures, Kurt Kaltenegger, Power, Smart Green VC, Venture Capital