Venture Arms of Samsung, Verizon, & Others Hungry for Deals with Hot Ideas

If startups want to seek funding from venture capitalists linked to major companies, they face a few different considerations compared with making deals with other types of backers. So on Tuesday, venture capitalists from Verizon, Shell, Samsung, Applied Materials, and other companies at the annual New York Venture Summit discussed the mojo they want to see from startups that may be investment opportunities.

The panel, moderated by Ingrid Vanderveldt, entrepreneur-in-residence at Dell, convened at the tail end of the daylong event presented by youngStartup Ventures. During the discussion it became clear that the venture arms of massive companies often look to startups for innovation as well as potential financial returns. Sebastian Titz, investment manager for new ventures with 3M New Ventures headquartered in Munich, Germany said his company looks for new ideas from outside of its own research. “For us, energy storage is a big trend,” he said

Henrik Holland, venture principal with the Cambridge offices of Shell Technology Ventures, said is company is looking for novel approaches to energy.

Daniel K. Keoppel, executive director with Verizon Ventures, said backing startups helps drive fresh thinking at Verizon Communications. “The original idea was to understand what is happening in the innovation community,” he said. “Venture capital is more than just investing,”

Verizon Ventures has offices in Albany, NY, and Basking Ridge, NJ. Keoppel said Verizon tends to develop strong relationships with the companies in its portfolio, yet it has not sought to acquire any of them. “We want to have the first bite at working with them, but to be successful the company it needs to serve all the [telecom] carriers,” he said. “That makes them less interesting as an acquisition target.” If Verizon were to acquire a company, he explained, business relationships with other carriers would end.

Entrepreneurs can benefit, he said, from Verizon’s resources in technology and distribution. If a startup wants to provide services to Verizon, Keoppel said having the venture capital team onboard can also help navigate the company’s intricacies.

He encouraged startups to have their affairs well in order and to be realistic when … Next Page »

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