Name: Cracking the VC code with Jonathan Hollis, Mountside Ventures
Uploaded: 2024-07-01T16:05:10.069Z
Duration: 244.04
Description: At SuperVenture, Jonathan Hollis, Managing Partner at Mountside Ventures, discusses the difference between corporate venture capital (CVC) and traditional venture capital (VC), and the evolving role of CVCs in the European venture capital landscape.

SUPERVENTURE_2024_Jonathan_Hollis I_Interv_500Mb.mp4

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Hollis.vtt

English

{{00:00:14}}
So one of the biggest challenges
VCs face is the length of

{{00:00:18}}
time it takes to fundraise.

{{00:00:20}}
LPs, family officers, like to
build long term relationships,

{{00:00:23}}
often between one to two years.

{{00:00:25}}
And so if you're fundraising as a VC,
you need to at least expect it to take

{{00:00:29}}
a couple of years to close a fund.

{{00:00:37}}
I've just finished a CVC workshop
for about an hour, talking to about

{{00:00:41}}
30 CVCs about their strategy, about
what they look for when investing.

{{00:00:45}}
And one of the hot topics
was how CVCs and VCs differ.

{{00:00:49}}
And of course, the main answer is the
strategic initiatives and the close fit.

{{00:00:55}}
To the businesses when they
like to invest in founders.

{{00:00:58}}
And so we talked about what they
look for and how they ensure that

{{00:01:02}}
they're different to a, vc and also
what they can provide founders.

{{00:01:13}}
So we just spoke during our
workshop about the advantages

{{00:01:17}}
of raising from A CVC over a vc.

{{00:01:20}}
And one of them was the strategic
alignment that founders can receive and

{{00:01:25}}
the access to their potential customers.

{{00:01:27}}
If I'm a founder and I'm raising from
CVC, I can then receive introductions

{{00:01:31}}
internally and to their clients.

{{00:01:33}}
And another one, which is especially
relevant for late stage rounds of

{{00:01:37}}
funding, is they have much greater
follow on funding potential.

{{00:01:40}}
Because many CVCs are an
evergreen structure or fund

{{00:01:44}}
from their balance sheet, and so
they have much bigger pockets.

{{00:01:47}}
to then write much bigger cheque
size further on along the road.

{{00:01:51}}
We

{{00:01:56}}
also talked about the challenges of
receiving capital from CVCs versus VCs,

{{00:02:01}}
and although there was a lot of debate
in the room, because some CVCs said

{{00:02:05}}
actually we are super quick as investors,
I think we can, agree that generally

{{00:02:10}}
CVCs are a bit slower to make decisions
because either they need internal buy

{{00:02:14}}
in from the stakeholders, Or many prefer
to have a specific client use case

{{00:02:20}}
before they actually commit the funds.

{{00:02:22}}
Although, of course, the financially
geared CVCs that have got a separate

{{00:02:25}}
vehicle can operate as quick.

{{00:02:28}}
The as the as the traditional CVs, VCs.

{{00:02:32}}
One of

{{00:02:39}}
the reasons why we held the
CVC workshop is we provided

{{00:02:42}}
a preview of our CVC report.

{{00:02:45}}
And we received responses
from over a hundred corporates

{{00:02:48}}
investing in both founders, into
funds, and into funder funds.

{{00:02:52}}
And we shared a lot of insights.

{{00:02:53}}
And one of them was that actually
from a sector perspective, there

{{00:02:57}}
was still a lot of interest within
B2B, AI, and machine learning.

{{00:03:01}}
Very similar.

{{00:03:02}}
Very similarly to the VCs.

{{00:03:04}}
But the other interesting finding
is that the role and the number of

{{00:03:09}}
deals the CVCs were doing was much
greater in proportion to the VCs.

{{00:03:13}}
And so in 2010, it was around 1 in
10 deals, and now in 2024, So one

{{00:03:19}}
in four deals in the VC space now
involves a CVC, which is more of

{{00:03:24}}
more doubling in the last 15 years.

{{00:03:29}}
One

{{00:03:34}}
of the things we talked about at the
workshop was actually many CVCs have got

{{00:03:38}}
a very specific niche, and so they're
looking at maybe healthcare, maybe

{{00:03:41}}
biotech, and so they're approaching the
founders themselves in a lot of cases.

{{00:03:46}}
But for when a founder is actually
pitching to a CBC and actually

{{00:03:49}}
dropping them a night or getting
them an introduction, actually

{{00:03:52}}
we find that preparing a strong
business case is super important.

{{00:03:58}}
How is this investment into my company
going to benefit the corporate, either

{{00:04:02}}
from a client perspective or internally?

So one of the biggest challenges
VCs face is the length of

LPs, family officers, like to
build long term relationships,

And so if you're fundraising as a VC,
you need to at least expect it to take

I've just finished a CVC workshop
for about an hour, talking to about

30 CVCs about their strategy, about
what they look for when investing.

And one of the hot topics
was how CVCs and VCs differ.

And of course, the main answer is the
strategic initiatives and the close fit.

To the businesses when they
like to invest in founders.

And so we talked about what they
look for and how they ensure that

they're different to a, vc and also
what they can provide founders.

So we just spoke during our
workshop about the advantages

And one of them was the strategic
alignment that founders can receive and

If I'm a founder and I'm raising from
CVC, I can then receive introductions

And another one, which is especially
relevant for late stage rounds of

funding, is they have much greater
follow on funding potential.

Because many CVCs are an
evergreen structure or fund

from their balance sheet, and so
they have much bigger pockets.

to then write much bigger cheque
size further on along the road.

also talked about the challenges of
receiving capital from CVCs versus VCs,

and although there was a lot of debate
in the room, because some CVCs said

actually we are super quick as investors,
I think we can, agree that generally

CVCs are a bit slower to make decisions
because either they need internal buy

in from the stakeholders, Or many prefer
to have a specific client use case

Although, of course, the financially
geared CVCs that have got a separate

the reasons why we held the
CVC workshop is we provided

And we received responses
from over a hundred corporates

investing in both founders, into
funds, and into funder funds.

And one of them was that actually
from a sector perspective, there

was still a lot of interest within
B2B, AI, and machine learning.

But the other interesting finding
is that the role and the number of

deals the CVCs were doing was much
greater in proportion to the VCs.

And so in 2010, it was around 1 in
10 deals, and now in 2024, So one

in four deals in the VC space now
involves a CVC, which is more of

of the things we talked about at the
workshop was actually many CVCs have got

a very specific niche, and so they're
looking at maybe healthcare, maybe

biotech, and so they're approaching the
founders themselves in a lot of cases.

But for when a founder is actually
pitching to a CBC and actually

dropping them a night or getting
them an introduction, actually

we find that preparing a strong
business case is super important.

How is this investment into my company
going to benefit the corporate, either

At SuperVenture, Jonathan Hollis, Managing Partner at Mountside Ventures, discusses the difference between corporate venture capital (CVC) and traditional venture capital (VC), and the evolving role of CVCs in the European venture capital landscape. 