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SINET Showcase 2011
A view from 3000 Sand Hill Road
Gerald BradyHead of Entrepreneur Services Group
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Some numbers from a banker – of course!
47% 1 in 6$5.9m
£27bnSources: National Cyber Security Alliance; Help Net Security; Ponemon Institute; Detica
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Mega-trends drive disruption
5
Countries need to drive:• Growth
• Employment
• Innovation
• Wealth creation
Mega-trends:• Globalization
• Shift to knowledge based economies
• Globally mobile workforce
• Globally connected (everyone to everything)
Companies are impacted by:• Traditional innovation models
• Exponential innovation
• Pressure on growth
• China moving up the value chain
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The sell-side is also talking about innovation
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However, given the speed at which the innovation curve continues to progress, new entrants with new products and redefined business models also have a chance to succeed, re-shaping profit pools across the industry. This is all the more so given a well funded venture capital industry (staffed with industry veterans), creating dilemmas for the leaders of the past and a driving force for deal-making activity:
‘Invent or Dent’: If you cannot innovate, dent your balance sheet to procure innovation. This is either a defensive strategy (to fend off disruptive threats) or an offensive strategy (to pursue new areas of growth).
‘Reply or Die’: If something new is about to supersede your approach, swallow the threat early. Otherwise, your own historical growth profile will turn into another company’s future growth.
‘Corroborate or commiserate’: Consolidate to sustain your and your partners’ innovation paths, especially when well-funded competitors can cyclically outspend you.
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Corporate innovation is different this time
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Internally focused
Driven byR&D
EvolutionNOT
Revolution
Cost not outcome focused
Little correlation with Corporate Venture
Capital
Internally focused
Isolated / little correlation with CVC
Cost not outcome focused
Evolution NOT Revolution
Driven by R&D
Internally focused
Driven byR&D
EvolutionNOT
Revolution
Cost not outcome focused
Little correlation with Corporate Venture
Capital
Greater external focus
Innovation partnering (VC,
M&A, JVs & licensing)
Outcome driven
Open to cannibalization
CEO / Chief Innovation Officer led
Traditional corporate Innovation The new model for corporate innovation
14 14
Companies’ are tracking the innovation landscape
Mature
Disruptive trends,white spaces& roadmaps
CorporateVC
M&APartneringDistributionVenture Portfolio:
Segmentation bycompany stage Growth
Start-ups
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Start-up formation remains robust in Silicon Valley
15
Q32011: No summer slow down – 2nd highest new account openings
Q1 09 Q2 Q3 Q4 Q1 10 Q2 Q3 Q4 Q1 11 Q2 11 Q3 110
50
100
150
200
250
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SVB’s: At the center of the innovation economy
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SVB
VCs
Portfolio companies
Corporates
Globalinnovation
centers
SVB’s Role• Positioned like Switzerland
• Neutral about:- Investors- Location- Stage- Sector
• Able to connect:
Corporate CompaniesCorporate VCsCorporate Corporate