It is important to ensure that potential partners don't feel pressured into engagements but are instead well-informed, allowing them to make more deliberate decisions based on the provided information. 
The Art of Strategic Timing and Holistic Thinking
May 16, 2024
Interviewed by Nicolas Sauvage on June 9, 2023
As a Marketing and communications specialist, Shanna Hendriks did not foresee herself becoming head of business development at NEA (New Enterprise Association). Her first exposure to the startup ecosystem was early in her career, shaping public relations narratives for entrepreneurial organizations. She then continued to industry giants Shutterfly and Tesla.
At Tesla, Shanna soon identified a growing interest from corporate entities seeking to gain footings in Silicon Valley activities. She took on an additional role, continuing to manage marketing campaigns while also nurturing corporate relationships. This new activity eventually led her to formalize her position in business development at NEA. After seven years in NEA, Shanna told the Corporate Venturing Insider that it’s not just a paycheck but one of the best jobs in the world.
Synergistic Alliances
“The way I see value from a strategic CVC is going to be slightly different than how one of our investors might see value from a strategic,” Shanna said.
Strategic value, she explained, is multifaceted most of the time. It isn’t a one-size-fits-all concept but rather takes on different forms depending on the stakeholder’s perspective. Shanna’s work at NEA is a clear invitation to join the diverse spectrum of investors exploring the possibilities NEA creates. But what stands out is the emphasis on strategic value and how it underpins every investment and partnership decision. Strategic value often extends beyond the traditional financial return of investment to encompass the potential for collaboration, product enhancement, and market insights.
From a due diligence standpoint, strategic partners provide NEA with a network of corporate connections to gain crucial insights. What do industry incumbents think of the startup in question? How does the market perceive its potential? The partners’ answers can determine whether a deal gets done, Shanna said, so the responses should be measured and well thought out.
This is a relationship game at the end of the day,” Shanna explained.
Strategic partners also carry influence as potential customers. Some even strive to establish customer relationships before considering taking an equity stake. This not only provides the startup with a source of revenue but also reinforces the investor’s commitment to its success. But strategic value doesn’t stop at mere customer relationships; it extends into the realm of long-term partnerships and collaborations. Relationships are currency in venture capital, and having a network of corporate allies can be decisive. These relationships go beyond the transactional; they are built on trust and shared visions for the future.
Timing
With so much riding on each investment decision, timing is an underappreciated component of success. Visionary CVC leaders are known for spotting opportunities before they become apparent to the masses and investing early when the path ahead is still veiled in uncertainty. This principle holds for financial venture capitalists, to be sure, but Shanna said it applies equally to corporate partnerships and funds with a strategic focus.
“I don’t want to be a gatekeeper,” she said. “But I don’t want our portfolio companies to be spinning their wheels when I know that there’s not a good chance of anything happening there,” shares Shanna.
Time is precious, especially to an entrepreneur who is moving at twice the speed of the rest of the world with not much financial runway in front. When orchestrating introductions and engagements between startups and corporate entities, timing must hit the sweet spot. Too early, and the engagement may wither before it can take root; too late, and the opportunity may have already slipped by. Today, many CVCs engage with startups as early as Series A. Some are willing to consider even seed-stage investments. When dealing with CVCs comfortable with early-stage investment, timing is less of an obstacle. The key is to identify the right moment to initiate discussions. Shanna would rather not be a startup’s first customer but it is third — commencing the relationship once the startup has gained traction in the market.
Shanna underscored the value of discussions about early-stage startups, even when immediate engagement isn’t on the horizon. Planting the seed, sharing insights, and fostering awareness can pave the way for future collaborations. The CVC landscape isn’t built solely on immediate transactions but makes room for building trust between corporate entities and startups. Timing isn’t just about engagement chronologies; it’s also about when to introduce possibilities. Being first doesn’t always equal success here.
Thinking Holistically
Shanna extolled the virtues of building relationships with business development professionals at large venture firms as a mutually beneficial way to navigate the startup landscape. With an overwhelming array of potential solutions and innovations, relying solely on inbound emails is often inefficient. Business development professionals network to identify startups that align with specific objectives, saving time and resources for CVCs.
“You can find efficiencies by partnering with or building relationships with the venture community,” Shanna said.
Shanna urged anyone starting in the CVC sector to anticipate how relationships with portfolio companies will be managed. Who will serve as the primary point of contact? How will information flow? What value can be added beyond financial investment? These questions guide CVCs in offering tangible benefits to their portfolio companies. But Shanna’s advice boils down to one key learning: think holistically.
Understanding financial investments is not the beginning and end of CVC; To win, leaders must also be able to add value to the entire ecosystem. Shanna prescribes a holistic approach not only in building an investment team but also in nurturing a portfolio, recognizing that the true value of CVC lies in the positive impact it can have on all stakeholders.
