BVK, the German venture capital association, has launched a working party of early stage corporate venture capital funds. The group will be a platform for corporate funds to share their experiences, exchange information and further their common interests within the association. Dr Thomas Kühr, board member of the BVK and CEO of T-Venture, the corporate venturing subsidiary of Deutsche Telekom, will chair the group. His deputy is Dr Marianne Tümpen, of DaimlerChrysler Venture.
Dr Holger Fromman, managing director of the BVK, says corporate venturing in Germany has increased significantly in the past few years, with 30 new corporate VC funds being created since 1998. In 1997 the membership of the BVK included only two corporate funds, from 1999 more and more began to apply and at the moment there are 15 corporate VCs in the association. These funds play a specific role in the market, according to Dr Kühr: “Corporate VCs are equally in demand with start-ups and investors. The established industrial expert’s assessment, as well as the global network of the parent company, form an ideal framework for recent innovative enterprises and the structure of their business.”
The working party gives corporate funds the opportunity to network, exchange and discuss ideas, knowledge and experiences. “We got the impression that corporate VCs have their own specific problems, often resulting from the relationship with the parent company,” says Dr Frommann. Issues discussed in the first meeting included fund structures, incentive systems, the relationship with parent companies and the decision making process in relation to this, and how to incentivise specialists within the parent company so they will help portfolio companies.
Dr Frommann says he has the impression that corporates are not rolling back VC activity in Germany, as they are in the US. “We have observed, even in 2001, some new corporate venture funds have entered the market. We are very optimistic others will follow this year.” The BVK will support the group providing statistics, surveys and analysis of corporate venture capital activity. It will also lobby the government about any tax or legal issues affecting corporate venturing. Although no such issues arose from discussions at the first session Dr Fromann is not ruling out this role for the BVK. He says: “The working group will continue to increase the public perception of corporate venture capital, will make it easier to access corporate venture capital when fund raising and will strengthen the connection to the other BVK members.”
Participants in the first session were Accenture Technology Ventures, AS Venture (Axel Springer), AutoVision (Volkswagen), BASF Venture Capital, DaimlerChyrsler Venture, DEWB (Jenoptic), Henkel Venture Capital, Infineon Ventures, MVC Mitteldeutsche Venture Capital (Lintec), RWE Dynamics Venture Capital Management, Siemens Mobile Acceleration, Siemens Venture Capital, T-Venture (Deutsche Telekom), VEAG Beteiligungsgesellschaft and West STEAG Partners.