Why building a corporate venture arm for your company

Driving innovation is one of the main priorities of every leader. Yet, it’s not so easy doing it in a very competitive market or in a conservative industry. One of the most effective ways to build an innovative company is to build a corporate venture arm. That’s, for example, what Shell did back in 1998.  For episode 046 of “The World Class Leaders Show”, I invited Andrea Course, Venture Principal of Shell Ventures, to share her experience with innovation, startups, founders, and CEOs. Andrea has 15 years of experience in the energy sector. Prior to joining Shell, Andrea worked as Venture Principal at Schlumberger Technology Investments. In addition, she is a speaker and gender equality advocate who supports minority-owned startups as founder and managing partner for Course Investments. She holds a degree in Engineering Physics from the University of Central Oklahoma, a Master of Science from the University of Oklahoma in Aerospace Engineering, and an executive MBA from the University of Houston. Shell Ventures invest in mainly three verticals: 1) Resources and Environment, which covers decarbonization 2) Power and heat, like wind and solar energy storage, energy grid management 3) Mobility, which covers the mobility systems of the future

How to choose the right companies to invest in

In Andrea’s experience, it comes down to three key criteria:
  1. The company needs to have something unique like a technology protected against others that may want to copy. It could be a trade secret or something protected by IP
  2. The company must solve a problem, and not have a technology in search of a problem. If they’re not solving a problem, the technology is just a “nice to have” 
  3. The company must have a strong team. As a founder/CEO, you need to be surrounded by people who are smarter and know more than you do.  

The power of diversity in the startup world

A diverse team is crucial for the success of the company. Diverse members can bring a different set of skills, experiences, perspectives as well as personalities. It’s the power of cross-pollination. However, the VC industry (not just the energy industry) is still facing a huge lack of diversity in terms of gender, age, race, and background. Gender is still the most pressing issue in the investment world. If we look at the numbers from 2021, the amount of money that went to female investors is less than 2% out of all the capital that was invested. The absence of diversity prevents companies from making better decisions because you don’t have diverse voices in the room. 

What makes great founders and CEOs

  1. Their ability to pivot and turn the company into something completely different
  2. They need to be resilient, able to put in the hard work and execute in very extreme conditions.
  3. They’ve launched other companies before. Even if their previous company failed, they’ve learned massive experience that can be used for their new startup. This also shows their persistence and dedication to succeed.
  4. They need to have a lot of optimism and confidence

The best way to support the startups after the investment

You should first leverage the power of your company brand. Shell, for example, helps its portfolio companies to scale internationally and deploy their technologies in countries that otherwise will be hard for them to reach. Shell also gives access to their customers and supply chain network.  Besides, it’s important to build a dedicated team that can look after the implementation of the technology within the company as well as supports the startup in marketing, engaging with key business stakeholders, partners, and other investors. Not surprisingly, many founders feel frustrated after getting the investment because they find it difficult to get visibility internally, roll out their technologies, or they get lost in so-many other corporate strategic priorities.

How to deploy new technologies in a large and established company

It’s not that easy. Many companies have a strong internal business experience, so introducing new technologies or changes can create some level of resistance and conflict. This is when you hear senior professionals say: we’ve been doing this for the last 50 years. We’re fine. Why change it now?” And for some industries, this is often expected. The energy industry, for example, is known for being very risk averse. And with good reason, because it can’t afford to have any more disasters. If something doesn’t work out, you pay a very high cost in this industry. It’s not like Silicon Valley.  There are other two good strategies to use in these situations. One is by bringing a solid business case that can demonstrate that you can save, for example in a company like Shell, 60% or 70% of carbon emissions which is the key strategic priority for the company. The other is to take baby steps by starting with smaller pilots before you fully deploy the technology. Finally, it’s important to decide internally first whether you’re making a strategic or just a financial investment (or maybe is something in between). And based on that answer, then you can decide how much time and effort to put into this implementation. 

Final Q&As

Q: What’s one lesson that you learned in your career? A: It’s easy to get disappointed when things don’t go your way, especially after you’ve worked hard on something. But if you think about all those occasions in the past, and what happened afterward, things always turn out for the best. Remember that life is not a perfect road. Q: Is there anything that you would have done differently in your career?  A: I don’t think so. Because if I hadn’t made those mistakes, I wouldn’t be where I am. You just have to take it and learn from it and move on.  Q: When did you have your top level of performance? Why? A: My job is my life. I spend more time at work than I do with my kids. So it’s really making sure that you’re surrounded by people who are not looking at you as an idol but helping you grow and learn. I work at my best when I learn indeed.  Q: What is one book that really made an impact on your life or on your career?  A: It’s “Brave, Not Perfect: Fear Less, Fail More, and Live Bolder”. It’s a great book written by Reshma Saujani, the CEO of Girls Who Code. It focuses on the differences between females and males, and how, even at an early age, we teach our females to be perfect, rather than be brave, and how that has consequences later on in life. I’m constantly thinking in my head “you need to be brave, not perfect”. So it’s a great book for those who have kids or are surrounded by females at work. Listen to the podcast related to this article: https://www.andreapetrone.com/why-building-a-corporate-venture-arm-for-your-company-with-andrea-course-podcast/
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