The markets have changed, unicorns are becoming an obstical to have in your portfolio and comporations are pushed to be active in investing and partnering. 5 take aways on how to survive and generate value as a corporate VC in 2016.

1. State of Corporate Venturing
Thomas Grota, Investment Director
at Deutsche Telekom AG

2. While CVC deal number increases...
• General Motors, under pressure from Ford, Google, Apple, Uber and just about
every other big company doing something car-related, made a $500 million
investment in Lyft this week. The deal includes a partnership that will focus on
developing a car-hailing service using autonomous driving technology.
• Pharmaceutical giant Roche led a $175 million in Flatiron Health, the biotech
startup that sells software related to cancer treatment. Allen & Company, Baillie
Gifford and Casdin Capital also kicked in for this latest round; previous investors
include Google Ventures and First Round Capital
• UPS led a $28 million funding round for the same-day delivery startup Deliv. Other
investors included Upfront Ventures, RPM Ventures, General Growth Properties
and Simon Property Group (Wall Street Journal).
• Struggling $10 billion grocery chain Whole Foods is leading an unknown sized
investment in the $2 billion grocery delivery startup Instacart, and the two are
inking an exclusive five-year delivery partnership.

3. ... there is Winter in Silicon Valley

4. 4
Venture Capital is a tough and risky Business.

5. 55% of US investments are written off
0
5
10
15
20
25
30
35
40
45
50
x<0.5 0.5<x<1 x=1 1<x<2 2<x<5 x>5
% Cost % Value

6. 62% of EU investments are written off
0
10
20
30
40
50
60
x<0.5 0.5<x<1 x=1 1<x<2 2<x<5 x>5
% Cost % Value

7. Entrepreneurs need less capital to start
… Thanks to cloud, viral marketing via social & easy payment.
4.000.000 €
400.000 €
40.000 €
4.000 €
1995 2005 2010 2014
CostneededtostartanITcompany
Technology
Drivers
Open
Source
Cloud +
AWS
Developers
Start Companies
99% cost reduction

8. 0,2 0,4 0,8 4,3
18
Cisco Amazon Microsoft LinkedIn Twitter facebook Alibaba
Private investor capture gains today
Previous Tech Cycle
Current market cap:
$133B+ $261B+ $405B+
$15B+
$13B+
$307B+ $163B+
New Tech Cycle
Market Capitalization at IPO ($B) vs. current
*) Data from Q1 2016.
104 150

9. Companies see the Pre-IPO Dip
Valuation
Time
Financing rounds
IPO
(same for trade sales)
indicative
fb: $304bn
box: $1.39bn
sq: $3.37bn
+214%
-28%
-42%

11. Negative Outlook creates Impact

13. medium.com/@thomasgr
> www.medium.com/@thomasgr

14. 14
So the Markets have changed – and so did VCs.

15. Late stage financing produces lofty valuations
Seed Stage Early Stage Later Stage
Larger
Later stage
rounds after
validation
More seed rounds as costs decline &
sources of capital increase
Traditional VC
Today’s VC
ValuationBetter equity position for
early stage investors and founders
competitive areas
(Big funds needed)
… When a concept works the competition is fierce.

16. Private Investors have different Goals
500 Startups, Y Combinator
Seedcamp, Startupbootcamp
@500: ca. 900 invests, 50 exits, 3 unicorns
@seedc: 240 invests, 12 exits, 0 unicorns
Accel, Index, Bessemer, KPCB, Sequoia, A16Z,
Fidelity, Highland, Kinevik, Global Founders, RI
IPOs, Unicorns,
1000+ investments
Salesforce, Intel, Samsung,
SAP, Google Ventures
“The good, the bad,
the ugly…”
Alphabet Capital, facebook, SoftBank, Elan Musk, ...
“Big Bets on
Moonshots”
Seed Stage Late stage
1x
8x
2x
na

17. Where business runs Everywhere on…
Telco's life in a complex World
Fast Secure ubiquitous
Networks

18. Telco’s Chance to benefit
Partnering & Venturing
Contents &
Advertising
Social
Networks
Security
Platforms
Connected
Computing
Opportunities of Venturing
Opportunities of Partnering
IoT & 5G
Cyber / Privacy
Big Data Messaging

19. The way for Corporate Investors
• More corporations need to invest & partner
• Many bets on small ideas is good Marketing
• Big bets on “close to core” businesses need focus
• CVC funds are nice to have - but less efficient
• Investments from balance sheet is the way to go

20. Like Startups – VCs are risking to burn $$$ of LPs…
… but in CVC the Corporation will feel the impact!
Thomas Grota
Twitter @thomasgr