Abdul Guefor from Intel Capital, Stephen Moore from Motorola Ventures, Deborah Magid of IBM Ventures, Joerg Sievert from SAP Ventures, Michael Boshammer of T-Venture all tipped up to talk about the resurgence of corporate VCs in Europe. Nagraj Kashyap from Qualcomm Ventures is here too but he’s just got off the plane.
Guefor looks after Intel Capital in Europe – and he’s got 15 people or so in his team, scattered across the geography.Rudy Burger from Woodside Capital Partners is the moderator dish of the day. Qualcomm has been investing in Europe for the last five years.
Burger said received wisdom in the early 1990s was that corporate funds shouldn’t be involved at the beginning of a venture. But now corporate investors are filling a gap, he reckons. T-Venture disagrees. The Intel guy said that investment has gone more from hardware – including semiconductors – to software. But in high cap requirements there’s a large need for strategic step-ins. McAfee?
Motorola’s Moore said that his company takes a direct approach to entrepreneurs. He said Motorola steered away from companies that are already too dependent on his company. SAP’s Sievert said that his company wouldn’t touch a company that didn’t have at least $5 million in revenues, so companies that are in the middle or late stages of startups. He said most corporations would not find it particularly easy to work with early stage start ups.
IBM’s Magid said that Big Blue doesn’t invest directly, but has through its venture group to only work with startup companies. She gets measured on having good strategic discussions with other investors. She gets measured on finding new business opportunities, and feeding the M&A pipeline.
A Burger question to the audience asked if anyone would like investment from the Big Boys on the dais. A full 15 seconds passed before someone volunteered, but this guy, from Blue ID wouldn’t say who he’d like to perch on his shoulder.
Qualcomm said that the amount of investments they were making was increasing. Kashyap said that investment wasn’t associated with buying the companies it invested in, unless it made strategic sense. Conflicts for Qualcomm are few and far between, he said. In the US it does seed investment.
Intel said it has two mandates – strategic and financial. If you invest in a company and it goes out of business nine months later, no one is going to benefit from that. Intel doesn’t put inhibitors on how the financed companies trade. When Intel bought McAfee, its portfolio companies got angry but after a couple of days they settle down. Intel will not take positions on a startup board, doesn’t like signing NDAs, but says the information it receives will only be used for financial purposes. For very sensitive matters, Intel will recuse itself from discussions.
Intel said that Microsoft was being disingenuous about not investing in startups. Microsoft has done it before, but it’s done it badly in the past and lost hundreds of millions of dollars. Microsoft, he said, is trying to build mindshare and persuade startups to use its platform and not open source.
Qualcomm will replace in-house R&D, in some cases, by investing in external technologies. It’s very careful that it won’t tread into something bad. IBM’s Magid said it has relationships with companies that have taken money from, for example, SAP or Intel and won’t demand exclusivity.
Qualcomm invests in data capacity because people are starting to use their phones for all sorts of functions. Motorola is interested in investing in companies in the connected home or the mobile space. T-Ventures is interested in everything from consumer to enterprise and anything related to Deutsche Telekom and its business. Intel said the market wants growth in mobile devices, connected devices like set top boxes, and the whole cloud infrastructure. Intel wants to play a central role in that.
SAP is looking at the clouds too, while IBM is interested in healthcare, energy, analytics and to do something different from what has been done before. It also looks at companies who are putting IT in places where it never existed before.