Strategic Corporate Investments

Yesterday, I sat down with Dina Routhier, an investment manager at Stanley Ventures, the venture division of industry leader, Stanley Black and Decker, to discuss their investment strategy and how they plan to work with the Techstars accelerator program.

Here were the key takeaways:

They are looking for exciting startups: Strong teams with proprietary technology that can be leveraged by one of their many business units will get on their radar.

They can move relatively quickly: Despite being a large corporation, their venture division is able to move fast once they’ve had an opportunity to get to know a company. With a signed LOI, they can typically move to close a deal within 4 weeks. In fact, since they were founded two years ago, they have closed 11 investments. Companies can help speed things along by having their financial projections prepared with a three year view, ensuring that their IP is sorted, and preparing documentation to be ready to go.

They will lead or join: They have made investments as both the lead on a round, and as part of a larger syndicate. There are advantages to them for both approaches. However, investing as part of a syndicate allows them to develop a broader understanding of the market value of the company.

They consider valuations more art than science: When working to place a valuation on companies, they tend to consider what the market will bear.

They are smart money: When making an investment, they aren’t looking for a quick exit. They are working to develop a relationship which they hope will be long term. So they typically will make investments in the $1–3M range, and in parallel, they will work to develop a commercial agreement. While no one agreement is the same, generally they include a minimum purchase amount, and they avoid restrictive terms that could hinder the development of a growing company. For example, in an agreement with Stanley Black and Decker, companies won’t be asked for a right of first refusal, or a right of first notice. Their intention is to help a company scale up, so Stanley Black and Decker can become a good customer.

They are planning to leverage the accelerator: The ventures team will be working as mentors within the program, and hopes to cultivate relationships with participating companies.

Click here to learn more about the latest Stanley+Techstars Additive Manufacturing Accelerator Program. And remember, applications are open now!