CVC International Trends and Practical tips to get it right

By Lourdes Ayala, Mark Rundall, James Baillieu, Carole Bodin, Miguel Kindelan

10-2020

On September 17th, Bird & Bird held a webinar on the investment of Corporate Venture Capital (CVCs) in start-ups entitled "CVC international trends and practical tips to get it right".

Lourdes Ayala, head of the Corporate and M&A area of the Madrid office, introduced the session by highlighting the relevance of the topic. She noted that "nowadays many companies, governments and corporations around the world know that the constant evolution of technology is a challenge where we all have to play an active role".

Lourdes continued by highlighting how 50% of the developing economy is dependant on technological services and that more than 90% of CEOs believe that long-term success is contingent on the incorporation of innovative ideas. She identified the different formulas for corporate venturing, as well as carrying out a brief analysis on the current situation and its evolution. 

Mark Rundall and James Baillieu, both partners in Bird & Birds Corporate practice and based in the London office, spoke about the adaptations of the market to CVCs, especially in the UK, providing a series of tips for those who wish to invest and attract investors.

Following this, the Counsel of the same area of the Paris office, Carole Bodin, explained in a practical way the legal challenges in the investments of the CVCs and how they have been resolved through "black lists" or the control of the reputational image by the CVCs. 

Finally, Miguel Kindelan, Executive Director of GP Bullhound Spain, analysed the issue from the perspective of a start-up, reviewing the main misgivings of these in front of the CVCs. 

Miguel explained that, although founders of start-ups initially see the investment of a CVC as a huge business opportunity (since it tends to significantly accelerate the growth of the company) in the long run they complain about the great complexity involved and the possible conflicts of interests. He stressed that the loss of independence and control of the project, difficulties which are highlighted by founders, places them in a situation where they are heavily dependant on their investors. In response, Miguel commented on some of the possible solutions to these problems, noting the growing number of "success stories" in this context.