Hello, how are you? As I was telling you, We cannot talk about corporate entrepreneurship or Corporate Venture without talking first about open innovation. Hugo Kantis developed a wonderful work of research about the topic of Corporate Entrepreneurship or Corporate Venture, and he explains how this phenomena of finding new ideas and projects from the outside, starts permeating into the companies at a worldwide level. The first works on open innovation, and we are talking about open innovation because it turns out that in the past the companies did research from within, and they really did not launch any products until they launched them from within, today all that has changed, the strategy of business innovation now emphasizes the need to explore and capitalize resources from outside the company, instead of sticking to the capacities of assets of the organization, that has changed entirely due to the speed and the times we are living with the competition at a global level. The proposal was to work with ideas and projects generated outside the company this means getting all the actors involved, who are part of what we call today ecosystem, in this way, by getting more people involved collaboration is fostered, the area of corporate entrepreneurship is broadened, understood as the collection of instruments that companies have in order to accelerate the innovation and creation of new businesses, this has changed radically because companies always only looked inside really what has happened for all of this to happen, and why invest resources on the outside?, well, the answer is very simple, isn’t it? the answer is the technological innovation process has accelerated at a worldwide level, and it already has a disruptive character, that the companies cannot have that speed today to be so disruptive, and the latter is evident, and no one wants to lose the race, nor be threatened by the changes. The most important challenge on open Innovation is where companies seek to accelerate their innovation processes through alliances or purchasing what is known today as Startups, it is precisely a fit, that is, it must fit perfectly, in other words, that both parts can fit or develop synergies between both cultures, that is today’s greatest challenge not buying Startups, but checking if you buy a Startup, how it fits perfectly with the company’s values. To define what Corporate Venture is, or Venture Incorporate, or Corporate Entrepreneurship, according to the Corporate Finance Institute in the United States, Corporate Entrepreneurship, also known as Corporate Venture Capital, is the practice of directly investing company’s funds, corporate funds in external companies, and which are external, that is, in Startups, this is what big companies who want to invest in smaller but innovative companies are starting to do, they do it through agreements of joint Ventures and by purchasing capital shares, that is, they buy stocks of these startups. The investing company can also bring the startup a great experience, their facilities, operation, marketing, strategic management, and even give them a credit line. This is the great synergy that can be done, on the one hand the Innovation of the startups, of the startuppers versus the expertise of the big corporate company. Derived from the Venture Corporate, or Corporate Venture, Corporate Venture Capital this movement that is known, by the way, as CVC started with the appearance of new companies in the field of technology. The main objective of CVC or Corporate Venture Capital is to obtain competitive advantage and access to new and innovative ideas which can turn into potential competitors of the future, companies don’t want to have more competition, therefore they start buying them, but the difference of an acquisition, is that this focuses on startup companies. Corporate Venture Capital uses investment signatures, maybe from third parties and what happens is that what it finally does is to put money on it, invest capital on companies they have, which are innovative to continue developing them. Some of the main actors of Corporate Venture Capital are obviously what you know as Google Ventures. What Google Ventures does around the world, and I have lived that experience a lot, is to go around buying startups in order to incorporate them to their system, Qualcomm Ventures also does that, where they really use Qualcomm’s sales force to promote entrepreneurs. Intel Capital, I’m sure you know it, the chips etcetera, also buy companies to accelerate their innovation processes. Undoubtedly there are other industries which are also relevant for CVC, especially companies of biotechnology, telecommunications, fintech, services Currently the Corporate Venture Capital, CVC as it is known, influenced the market of fast growth with over four hundred and seventy-five new funds, and over one thousand, one hundred funds which in the past have been investing on Corporate Venture Capital, but, which are the objectives of CVC, of this movement of Corporate Venture Capital different from Venture Capital, of the funds of Venture Capital CVC or Corporate Venture Capital endeavours to reach objectives both strategic and financial. A Corporate Venture Capital strategically- oriented aims mainly at increasing the company’s sales and profits directly or indirectly and making agreements precisely with new companies that use those technologies, and this will allow them to break into new markets they identify new purchasing objectives and have access to new resources while what the capital venture funds are seeking are return opportunities the CVC funds seek opportunities to expand their companies and find new markets. What other differences are we finding between capital Venture funds and Corporate Venture funds? There are a couple of things: Venture Capital funds try to sell the Innovative companies they buy versus Corporate Venture Capital funds who want to keep them in their belly, they are not going to sell them, quite the opposite, what big companies need, who make their own investment wings inside the company is try to broaden sales, grow in sales, gow, and above all break into new markets, while venture capital funds try to find a way out in five to ten years. To be honest CVC’s have the option of investing on companies in early stages this is one of the things which characterize them. There usually are five stages: Financing on the initial stage, that is how Corporate Venture Capital funds participate they are newly created companies which can start operating but not in the comercial production and sales stage in this stage a startup uses up a large amount of cash for the development of products and their initial marketing, in other words, there are startups that are still not selling but the companies buy them to help them develop, don’t they? The Corporate Venture Capital funds also invest seed capital funds which is money used to cover the initial operational expenses of the startup and that with this what they accomplish is starting to try new markets. Also the funds, also the corporate companies that have corporate entrepreneurship invest on this kind of companies even though they are not yet billing, the important thing is that they inject money of early stages it’s cheaper for the company and above all they start kind of developing their marketing strategy but also within corporate entrepreneurship there is a third stage of investment which is the financing known as financing for growth or expansion which is basically capital given to companies which are to a large extent in expansion and through the launching of new products, this also works in this industry and you normally see what is happening in this sense, don’t you? that they invest in companies that are starting to bill and that can be competition. They can also invest in companies that want to go into the stock Exchange, this is more uncommon but corporate entrepreneurship can also look for companies which are halfway consolidatet but they can inject relationships, money, infrastructure to get to the Mexican stock Exchange or any other stock Exchange you also get to see this it’s less common but also the capital, the corporate entrepreneurship focuses on this and finally the highest level which is no longer considered as much as corporate entrepreneurship is known as Mergers and acquisitions and it is in this stage where companies invest on companies which are already purchasing, are already merging or making an acquisition, it is between a merger and acquisition, as it is known and corporate entrepreneurship is the last stage the companies are already consolidated and what you are looking for is a strategic alliance, a strategic purchase to be able to do it. These are the stages included in corporate entrepreneurship and to be honest it is growing more and more in our country. Finally, which are the benefits or which is the added value of Corporate Venture Capital for startups? Well there are many, the truth is that to be honest they provide all the infrastructure, economic security, the part of infrastructure in the sense of offices, laboratories, they also provide you with talent, there is a lot of talent which is in the companies, who work in the companies, that the company or the startup could not pay for, and they provide networking, especially a consolidated company which invests in your startup the truth is that they provide you with networking, they connect you to a sales channel, to be honest it has many, many advantages, and well for the investing companies they work as a door to enter to new innovations, sorry, to new technologies, to innovative processes and businesses, and that allows the to continue competing and maintaining a hegemony. In Mexico we have seen many cases, the topic of Corporate Venture or Corporate entrepreneurship is starting to be disclosed, both in Monterrey and in Mexico City and in some important cities of Mexico, and well, we have seen how some companies such as CEMEX, such as Cinepolis, Telefonica Movil, and even TELMEX companies such as Cinepolis, oh, I had already mentioned it, as Bimbo which has an investment company, already many companies are into corporate entrepreneurship, it is, it’s relatively new, it won’t take more tan ten years FEMSA and Arca Continental are also doing it through many platforms where they are encouraging entrepreneurs. In the topic of banking we have seen spectacular things especially Bancomer has invested on Several startups which have given them a great, great competitive advantage. Televisa is also a very important example of being involved in this topic of corporate entrepreneurship. My name is Luis Antonio Márquez, thank you very much.
