C HAPTER 6: T HE S YNERGY B ETWEEN A NGEL N ETWORKS A ND C ORPORATE V ENTURING
Canadian corporations involved with venturing activities
Sector Telecom
Canadian corporations
• Bell Mobility • CGI Inc.
• Rogers Communications • Telesystems (Microcell) • Telus Ventures
Energy
• Hydro-Québec CapiTech • Mitsubishi Canada • Noram Engineering • OPG Ventures (Ontario Power Generation)
Financial Services
• e-Scotia Acquisitions • RBC Technology Ventures
Source: Bell Mobility Research
In addition, the amount of CVC capital committed to seed rounds, in which angels would participate, is likely very small. In Canada, few of the venture arms focus on early-stage seed financing opportunities. From the above list, Bell Mobility’s Accelerator Fund, Hydro-Québec CapiTech, and Noram’s Technology Incubator are venture arms that explore opportunities with seed stage companies. This situation is much the same in the U.S. Ernst & Young revealed in a recent survey (Ernst & Young Corporate Venture Capital Report, Fall 2002), that American CVCs committed only six per cent of available funds in the seed stage round. The results of the survey are illustrated in the graph shown below. CVC INVESTING IN VC-BACKED COMPANIES BY ROUND (FALL 2002)
CVCs have also been criticized for having a negative impact on a start-up’s ability to pursue business opportunities. Sometimes a CVC will require local market product exclusivity to differentiate the parent from the competition. Or perhaps a CVC’s ownership may limit others from using the start-up’s product or service. These are valid concerns. A CVC with an equity investment will, however, attempt to balance strategic terms, such as exclusivity, with a suitable return on investment. Finally, critics argue that CVCs might be temporary investors and not committed to the longer term. For example, in 2000, there were 400 corporations worldwide involved with corporate venturing, whereas two years later, the number had dropped to 300. While this evidence supports the
Percentage of funds committed by stage
Source: Ernst & Young Corporate Venture Capital Report, Venture Capital Advisory Group, Fall 2002.
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