Many large corporations choose to become Emerald LPs, not only for financial return, but also for what we would call strategic return. This could be access to new technologies, access to important partnerships, and access to knowledge and experience that has the possibility to help transform their business for a sustainable future. As regards the latter, LPs at a certain investment level are given the opportunity to send one of their employees for a secondment – where they can learn firsthand how corporate venture capital at Emerald works.
To find out what a secondment was like from the inside, we spoke to Dr. Janina Zippel from Beiersdorf at the end of her 5-weeks with Emerald.
Q: How would you describe your secondment with Emerald in one word?
Q: Who did you work with during the secondment who had the most lasting impact on you? Why?
I worked with the whole team: sector specialists on deal sourcing in sustainable packaging; finance specialists on the analysis of business models and growth potential of investment candidates; and fund partners on the term sheets and negotiations with startups.
The most lasting impact was the discussion on Emerald’s business model evaluation, especially the challenges of financing hard tech companies in the climate tech space. It is very different to build a company around software versus a company that needs physical assets. So a clear value proposition is key for an investment case. It was interesting to see their approach to identify the most valuable candidates.
Beyond daily business, exchanging with fund partners on the differences between VC and a strategically focused CVC – as Beiersdorf is – was very important. For a strategic CVC, it is important to find the best balance possible financially and strategically from a startup investment.
Q: What was the best part of the secondment for you personally & professionally?
Professionally, I would say the term sheet negotiations and working with the startups.
As regards term sheet negotiations, Emerald is the lead investor most of the time and is leading deal negotiations and deal terms. Their many years of experience really shined through here.
Being one of the largest skin care companies in the world, we want to make a measurable and positive contribution to the environment and society. Thus, for Beiersdorf it is key to engage with the top entrepreneurs and future market leaders in clean tech and climate tech to drive the green transition – fully in line with our corporate C.A.R.E.+ strategy and sustainability agenda CARE BEYOND SKIN. The right contractual conditions are mandatory for a future joint growth in the market and a successful industrialization of the new green technologies. This is key to make a strategic collaboration and investment successful.
As for startups, Emerald understands the challenges that startups face and coaches them. These are the moments when venture capital “comes to life” and that really add value to young entrepreneurs. This was very inspiring.
Being in close contact with the Emerald team, also challenging topics could be discussed. We have been collaborating with them for a year and a half. Getting these firsthand insights during the secondment, it made it more tangible e.g. how big a challenge it is finding the perfect packaging deal is, in a just evolving market environment with many uncertainties from a technological and economic standpoint.
Personally, the welcome to the team was incredibly warm. There was a high level of trust and engagement and I felt absolutely integrated.
Q: What are 2-3 key facts you can share with young & expanding CVCs that you learned from working with Emerald?
- Deal flow sourcing: A profound network in the startup and VC community is key to get access to the most relevant investment deals. Emerald supports us to further build this network through our collaboration.
- Financial due diligence: Emerald is a financially driven revenue focused investor. I have profited from Emerald’s experience in analyzing business models and growth potential of emerging technology startups.
- Term sheets and negotiation: The discussion on Emerald’s term sheet and negotiation strategy as lead investor in many deals gave us valuable insights and inspiration.