Intel, Apple, and Europe's 50-Year VC Revolution: A Conversation with Oxford's Thomas Hellmann

Intel, Apple, and Europe’s 50-Year VC Revolution: A Conversation with Oxford’s Thomas Hellmann

Interviewed January 21st, 2025

In January 2025, Corporate Venturing Insider welcomed Thomas Hellmann, a professor at the University of Oxford, for episode #98, where he shared his extraordinary journey into the world of venture capital. His observations on the evolution of corporate venturing, as well as fascinating stories, underscore his expertise.

In conversation with Nicolas Sauvage, President of TDK Ventures, Hellmann recounted how he serendipitously pivoted from macroeconomics to Silicon Valley’s burgeoning VC scene and unpacked the strategic missteps of Apple’s early CVC arm. Offering deep insights, historical lessons, and thought-provoking perspectives on the intersection of academia, investment, and entrepreneurship, Hellmann’s reflections serve as a treasure trove for aspiring entrepreneurs, investors, and academics alike.

The Unexpected Journey into Venture Capital

Hellmann’s career trajectory was anything but traditional. Initially, he envisioned himself as a macroeconomist. However, while pursuing his PhD at Stanford in the early 1990s, he was influenced by two professors — Nobel Laureate Joseph Stiglitz and Masahiko Aoki — who opened his eyes to the power of economic analysis and institutional frameworks. Aoki, a thought leader in Japanese economic policy, suggested Hellmann explore Silicon Valley instead of focusing solely on Japanese banking.

“At the time, Silicon Valley was still in its formative stages,” Hellmann recalled. “It was nowhere near the level of frankly wealth and publicity it has today. I was lucky to be among the first generation of scholars that took venture capital seriously.”

The Early Days of Venture Capital Research

In 1992, when Intel Capital was just one year old, Hellmann started interviewing VCs to understand what made Silicon Valley unique. His research focused on why venture capital had not taken off in Europe. “Thirty years ago, we built this very, very long list of why Europe doesn’t have venture capital,” he recalled.

However, with time, many of the initial assumptions proved incorrect. “Thirty years later, most of the items on the list turned out to be wrong. It just took a lot more time. So we’re basically living in this ‘50-year venture capital revolution,’ and we’re halfway through.”

He emphasized that Europe’s delayed emergence as a VC powerhouse was not just about risk aversion but also about the gradual establishment of essential financial institutions. “That prevented Europe from having it then, it took 25 years to build the institutions. And this has to do with people’s willingness to take risks, yes, but it has to do with financial institutions.”

Today, institutions like BPIFrance play a crucial role in fostering a sustainable VC ecosystem, helping Europe solidify its place in the global venture landscape.

Lessons from Intel

During his time at Stanford, Hellmann observed the rise of Intel Capital, under Les Vadász, and the leadership of Andy Grove, Intel’s legendary CEO. One particular moment stood out to him as a powerful example of Grove’s leadership style — marked by humility, self-awareness, and a relentless desire to improve.

“Andy Grove was teaching a class with a fantastic colleague of mine called Robert Burgelman. They were co-teaching a tech entrepreneurship class. I was just a fly on the wall, and Andy was teaching. I saw Andy coming out and talking to Robert Burgelman. And here is the CEO of one of the most powerful companies in the U.S. talking to a poor academic, and Andy asks Robert, ‘What am I doing wrong? Why are they not responding? Why is this class dragging? What do I do?’”

Instead of attributing the lack of engagement to the students, Grove sought constructive feedback — demonstrating a level of intellectual humility rarely seen in executives of his stature. “He realized that it wasn’t working, and instead of blaming the students, which would have been the easy thing, he said, ‘Tell me, what can I learn?’ And I thought that was very impressive.”

For Hellmann, this moment exemplified what made Grove such a transformational leader — his willingness to question himself, seek guidance, and continuously refine his approach. This mindset not only shaped Intel’s culture but also became a defining trait of great venture capitalists and corporate leaders who embrace learning as a lifelong process.

Beyond Grove’s personal leadership style, Intel Capital itself became a model for corporate venture success, remaining one of the longest-standing and most influential CVCs in history. “I think I never would have predicted it to last 30 years.” he said. “The worry with CVC is always that it’s the baby of the current CEO and changes with the next CEO turnover or even a strategy turn. Intel was remarkable.”

However, in a significant shift, Intel recently announced the spin-off of Intel Capital into an independent entity after investing over $20 billion in 2,000 companies over 34 years. This move marks a major transition in corporate venturing, signaling a shift towards greater autonomy for corporate-backed investment firms and raising questions about the evolving role of CVCs in fostering innovation.

Apple’s CVC and the PowerPoint Debacle

One of the most intriguing stories Hellmann shared was about Apple’s short-lived venture capital arm, Strategic Investment Group, in the early 1980s. Strategic Investment Group was designed to focus purely on financial returns. However, this approach led to an infamous decision.

“They ended up acquiring a small company and it was a mess. So they decided that the company needed to be split in two,” Hellmann explained. “One part became Claris, an Apple subsidiary. The other part that really didn’t fit in was this weird product called ‘PowerPoint’. They didn’t know what to do with this thing, and they sold it to the highest bidder, who was Microsoft.”

Apple had unknowingly given away a key component of what would become Microsoft Office, helping Microsoft strengthen its software dominance. Despite an 80% IRR, Apple’s board shut down the venture arm, concluding that the strategic losses far outweighed the financial gains.

The Rise of European VC and the Role of Governments

Hellmann also addressed the evolution of venture capital in Europe. He dismissed the idea that government involvement is a hindrance, pointing out that Silicon Valley itself was built on government funding through the U.S. Department of Defense.

“The biggest success story of government support for venture capital is France. BPI France has been an essential part of how France developed the tech sector.,” Hellmann said. “They’re not doing what Mariana Mazzucato recommends, which is sectoral policies. They’re saying we’re supporting an ecosystem, and they’re quite industry agnostic.”

Founder’s Dilemma: Control vs. Scale

A significant theme in the conversation was the tension founders faced between maintaining control and scaling their companies.

“Do you want to scale or to control?” Hellmann asked. Many founders struggle with this transition, but successful entrepreneurs recognize when it’s time to step back.

Hellmann also referenced Noam Wasserman’s book, The Founder’s Dilemma, which explores this tradeoff in depth. He pointed out that while some founders successfully transition to CEO roles, others are better suited for early-stage innovation.

The Value of Paying It Forward

One of the key cultural differences Hellmann highlighted between Silicon Valley and Europe is the willingness to help others without expecting immediate returns.

“Paying it forward is beyond coaching, mentoring, but also helping introduce to the right people. It’s hard to believe unless you’re there and you see it because in the Bay Area this is really special,” he said. In many European countries, people are more protective of their networks. Changing this mindset is crucial for fostering innovation.

The Future of Venture Capital

Thomas Hellmann remains optimistic about the continued evolution of venture capital but acknowledges regional differences. “The second generation of European venture capitalists is building a much more refined expertise. We’re not just trying to do what Sequoia does in the U.S. and then realizing it doesn’t work,” he explains. Instead, this new generation is adapting financing strategies to make venture capital a viable investment in Europe.

However, he notes a key challenge: “The U.S. model is based on unicorn logic, and we’re trying very hard to replicate that in Europe. It’s not wrong — the unicorn model increases ambition and competitive awareness. But you can generate great returns even without unicorns.” While major hubs like London, Paris, and Berlin have gained traction, he stresses that broader regional ecosystems must also function for sustainable success: “If, for example, Lille (a small town in France) doesn’t function, then that’s just economic reality.”

The Role of Corporate Venture Capital

Hellmann sees CVCs as valuable players in the startup ecosystem — if structured correctly. “If done well, CVCs offer incredible value. At later stages, they provide distribution, R&D support, and strategic partnerships that traditional VCs can’t. The key is ensuring alignment between the startup and the corporate.”

For early-stage startups, however, he cautions against taking CVC funding too soon. “Early stage, probably no corporate investors — but if you get them, get two of them. They neutralize each other a little. If you have just one, you risk giving undue power to an entity that may not fully understand you or has different strategic incentives.”

For those looking to dive deeper into his insights, Hellmann’s Apple’s VC case study is available through the Stanford Case Series, along with his broader research on venture capital.