CORPORATE VENTURING
Corporate Venturing is the commercialisation of high value innovation by leveraging key assets and core business strengths of a larger corporate while taking new, typically higher profile risks. This can be executed via building new ventures, partnering with nimble adjacencies or investing / acquiring strategic opportunities for exceptionally high value growth.
Corporate Venturing has grown rapidly internationally and is in early stages of maturity in New Zealand.
The returns are realised over a longer period, and are significantly greater, typically 5 – 20x return on investments. These rewards can be achieved via market capitalisation growth, incremental revenue & EBIT, dramatic cost reduction or ‘lifeboat’ strategies amongst evolving disruptive technology players.
However, the risks are different as well.
A key challenge for corporates in executing corporate venturing lies in overcoming possible rigid organisational structures, bureaucratic processes, and cultural barriers that hinder high risk/reward innovation and entrepreneurial agility.
Corporates who can focus on commercialising both core business (horizon 1) improvements and new technology or business model ventures (horizon 2 and 3), appreciate the nuance and the boldness of this ‘dual-bet strategy’ and the need for complimentary risk and reward profiles.
Done well, the practical implementation of venturing is an efficient and cost-effective way to explore, validate and execute on horizon 2 and 3 (higher risk/reward) opportunities.
Corporate Venturing
What we do
Point16 specialise in directing corporates to successful implementation of corporate ventures. We do more than strategy and planning, we are comfortable “on the tools” and can validate and create ventures thoroughly and at pace.
While everything is completely tailorable, from budget to type of engagement, our most common work in Corporate Venturing will involve one or a combination of the following:
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Venture Strategy
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Problem Discovery
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Solution Validation
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Venture Scouting
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Prototype Development
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Partnership and/or investment Due Diligence
We understand the reality of corporate organisational complexity, and we offer a respectful balance between stability and experimentation.
Our role is to right-size venture bets for your organisation, and we know how to tilt the odds towards 10x returns or more, while respecting core business culture and risk requirements having cut our teeth in high regulatory corporate environments.
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Our approach
Multiple levels of engagement
We are a proven group of entrepreneurs and corporate experts.
The Point16 team consists of business people from cross functional disciplines and founders that have exited their companies who are specialists at validating new venture opportunities quickly.
Point16 help organisations define exactly what they want to achieve and understand the structure, governance and commitment required to realise significant value while mitigating or removing unknown risks in the process. We embrace the company risk-benefit culture and treat it as our own using it as our yard stick to achieve on behalf of the business.
We build venture teams and entities, whether they are focused on scalable cost reduction, incremental revenue, EBIT or market cap opportunities, fast pivoting or “building life-rafts”.
We operate as a core team supported by a scalable multi-disciplinary bench of experts with established credentials. We design an approach that is right for each business on a fully customised basis, and we truly roll up our sleeves to pilot through the tricky bits. We believe in the importance of execution.
Our streamlined approach ensures that you stay focused, motivated, and on track to success.
We understand that every business operates differently. That's why we offer multiple levels of engagement to suit your preferences and budget. Whether you prefer hands-on consultation, comprehensive planning, or ongoing support, we have flexible models that fit your company's needs.
Point16’s services are fully customisable. We operate in cycles and with changing levels of engagement. A cycle typically lasts 2 – 3 months and we have 4 levels of engagement: from the lightest touch to completely immersive.
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Sustainable Lifestyle Fund
In 2019, the Point16 directors established the Sustainable Lifestyle Fund (SLF), a boutique private equity fund with a difference. SLF would buy and hold small / medium traditional kiwi businesses and support the management of them for long term, high yield dividends for investors while demonstrating sustainable business practices for its people and environment with practical success.
The fund would buy great kiwi businesses that were currently profitable, with a tangible product, happy customers, and core team with optimal leverage levels. They would have profitable cashflow to pay down debt and deliver dividends and cover a range of industries that were hard to disrupt and could succeed in tough economies.
Point16 would support management development, strategy deployment and insert mode
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Today P16 supports SLF by:
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Running effective board meetings for the OpCos and the fund
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Building powerful business strategies
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Coaching GMs and leadership teams for accountability and business brilliance
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Delivering strategic projects: process change, ops excellence, IT upgrades, market entry, R&D program, business case for major capex, etc.
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Running a federated CFO and HR function
Since the end of 2019, the Fund Unit value has doubled, and we have achieved our revised annual dividend goals. We are on target to achieve 35 – 50% annual dividends from FY25.
What we do
If you’re a Corporate Venture Team, Strategy Manager or C-Suite member seeking expert guidance in navigating the complexities of corporate venturing, particularly those aiming to capitalise on growth opportunities through innovative ventures, get in touch with the team at Point16. Our specialised support is tailored for businesses looking to overcome organisational barriers, manage risks effectively, and drive sustainable growth in their ventures.
There are many situations a company may find itself in that would warrant standing up a venture strategy. Typically, a business has a desire for further growth opportunities, whether this is due to proactive or reactive disruption anticipation, competitor differentiation or general curiosity for what is possible in the industry in which the corporate operates.
Corporate companies we have supported include:
Westpac, Westfield, Ports of Auckland, Lion, AWF Madison, Tonkin & Taylor among others
