Successful Exits through Corporate Venturing

1
Successful Exits through Corporate Venturing

• Geoff Baker
• Director, Plant Asset Management
• Non-executive Director, Finance South East Ltd

2
Corporate Venturing Key Points

• Business plan taken to a large Corporate that may
  be interested in the concept.
• The selected Corporate Partner gets involved in
  financing the deal and will become the ultimate
  buyer for the company.
• The exit strategy and pricing mechanism is
  defined at the start of the deal.
• Time scales are agreed and shareholders agreement
  formulated, detailing specific requirements for
  both parties.
• Exit time comes
• Corporate gets a new business aligned to their
  business needs at a lower cost than an
  acquisition.
• Entrepreneurs get a cash reward and potential for
  ongoing further involvement and reward.

3
Questions and Issues Around the Deal

• Why didnt the Corporate Partner just go ahead
  and do this within the business anyway if they
  felt it is so important?
• What happens if the business needs more money
  than the business plan indicates?
• What happens if the Corporate Partner gets taken
  over by a competitor during the process and it
  doesnt want to continue supporting the venture?
• How is this sort of deal received by the resident
  managers in the Corporate Partner business?
• What happens after the business is sold to the
  Corporate Partner? How do they achieve
  sustainability and long term growth of the
  business?
• An absolutely
  fundamental question!