Risky Business
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Risky Business

Measuring Success in Corporate Venture Capital

How to identify KPIs for strategic investment programs

  • Trend spotting and marketing intelligence
  • Commercial relationships
  • M&A pipeline
  • Launching businesses in new markets
  • Customer experience
  • New business models
  • Talent, recruiting, and training
  • Disruptive investing and hedging
  • Culture change
  • Future proofing the business
  • Branding/marketing the corporation as innovative
  • Product roadmap
  • Cost savings and efficiencies
  • Supply chain optimization
  • Freedom to operate in a non-regulated environment
  • Quantitative: number of new products introduced to market, number of patents in-licensed or out-licensed, number of external joint development partners, new revenue generated, or EBITDA (reflecting new revenues or cost savings from internal efficiencies)
  • Quantitative: number of sector reports generated and shared with the corporation’s senior managers, the number of deals sourced and evaluated, number of contacts generated with industry professionals
  • Quantitative: number of agreements signed, number of pilots implemented, number of successful pilots, number of full commercial relationship implementations, number of business units engaged in external commercial relationships; revenue or cost savings from commercial partnerships
  • Quantitative: number of acquisitions completed based on introductions from the corporate venture capital program; reduction in M&A price paid when including the price-averaging benefit of the venture investment
  • Quantitative: revenue or EBITDA generated for the corporation from new lines of business launched, new customer segments reached, new geographic markets entered
  1. Prioritize that list to the top five, most important goals
  2. Describe each goal in qualitative and quantitative fashion, creating key performance indicators to measure the progress of your program
  • The strategic benefits of corporate VC provide optionality and can provide inputs to drive overall company strategy
  • Goals can be measured in the short or long-term — include both and start with goals measured over a single year for a new corporate VC program
  • Develop the right mix of quantitative (easier to measure) and qualitative goals for your corporation and its culture
  • Make sure the first year strategic goals are achievable, as there may be an expectation to increase the goals in year two or beyond
  • Make sure the executive team buys in on these goals and KPIs
  • Review the performance of goals on at least an annual basis, but preferably on a twice per year basis
  • Use your goal framework to educate new senior executives who join the company on why you are pursuing corporate VC and to demonstrate the success you have generated so far
  • Financial goals, based on return on investment, should always be positioned as long-term (5+ years)

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Thoughts on corporate VC from the team at Touchdown Ventures, the leading provider of managed venture capital for corporations.

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David Horowitz

Founder & CEO at Touchdown Ventures (manager of corporate venture capital funds)