Touchdown Ventures aims to be a true partner in working with corporations to achieve success in venture capital. Touchdown leverages decades of experience to guide companies through best practices in setting up a fund, determining an appropriate investment strategy, sourcing and vetting potential investments, and ultimately managing the investments. The corporations dedicate a certain amount of funding to this effort and Touchdown helps to make sure the program is successful.
No. Our biggest value-add to corporations is working with them—on an ongoing basis—to source, evaluate, structure and manage investments. That said, fund set-up and investment strategy development are critical components to launching a corporate venture capital effort. Touchdown will always go through this process before kicking-off external deal sourcing/evaluation efforts.
No. Each corporate partner has its own fund that is solely capitalized by that corporation. Touchdown manages each fund separately to pursue the unique goals and objectives of each corporate partner. Each fund has its own investment committee, often times controlled by the corporate partner to ensure that its capital is going towards investment opportunities that align its with broader financial and strategic objectives.
Touchdown partners with a variety of companies across industries and size.
While Touchdown considers the specific needs of each of its corporate partners, we generally prefer an approach that is both financial and strategic. As discussed above, the strategic benefits of corporate venture are extremely important. On the other hand, making sound financial investments is critical to the long-term success of any corporate venture fund—can make the effort a self-sustaining profit center in the long-run and build a positive reputation with financially-oriented co-investors.
Touchdown balances strategic and financial goals through its investment approval and compensation models. By forming investment committees that are oftentimes controlled by our corporate partner, it makes it more likely that approved investments are strategically relevant.
Touchdown has no set criteria for investment sectors, geographies, or stages. Touchdown works with each of its corporate partners to develop an appropriate investment strategy, including which types of investments to consider.
There are many factors which go into each investment decision, however, the most important tend to be: (i) team, (ii) market opportunity, (iii) product quality and defensibility, and (iv) traction as a signal of ability to execute/grow.
This process also varies by corporation. Typically Touchdown will prepare an investment memorandum recommending an investment and the committee for that fund will approve or deny the investment. Each fund has its own investment committee, oftentimes controlled by the corporate partner to ensure that its capital is going towards investment opportunities that align its with broader financial and strategic objectives.
We have not raised our own fund outside of the corporate funds that we manage. We may, however, raise a fund in the future.
The corporation (or corporate fund) who is sponsoring/funding the investment will be named on the cap table. Touchdown, however, will generally manage that investment on behalf of the corporate partner.
Corporate venture capital is a critical component of external innovation. The benefits of supplementing internal R&D with external innovation are widely documented. Estimates have quantified that venture-backed firms are three times as efficient in generating innovations as corporate research. In general, startups are capable of taking more risks and moving more quickly than most corporations can.
There are many ways that corporations can participate in venture capital. If they have the resources and ability to attract talent, they can build an internal program. This can be a great option, however, it is typically very expensive and takes a long time to launch. Corporations can also simply invest in other venture funds as a Limited Partner. While this can be a good way to generate financial returns, corporations will often have little to no control over and visibility into the investments that are made. As such, investing in a traditional fund rarely delivers the strategic benefits of directly investing in a customized group of startups that meet the corporation’s specific goals.
Touchdown Ventures brings the team, engagement model, and process to run a corporate venture capital program. Touchdown already has an experienced team in place (over 50 years of venture capital experience). Our model and processes have been developed through decades of experience working within corporate venture and managing some of the world’s most successful venture funds. As such, we can get to market quickly and bring credibility with and an investment process that is well understood by other investors and entrepreneurs. Also, by utilizing a well-understood/widely accepted venture compensation model, Touchdown is generally more cost effective than building an internal team.