#63: Exploring the Frontiers of Corporate Venture Capital as a Service with CEO and Founder David Horowitz of TouchDown Ventures

Hi, I'm Jeppe and welcome to my bi-weekly newsletter on Corporate Venturing. My aim is to provide a comprehensive perspective on the latest developments in the field and its related topics, drawing from the insights of top management, venture capitalists, founders, LPs, and family offices. I aim to offer valuable information and thought-provoking content that will aid in understanding the importance of Corporate Venturing in business strategy.

I am?not a client of Touchdown Ventures nor have I been compensated for this article.

Today I’m speaking with whom I call the founding father of Corporate Venture Capital as a Service, David Horowitz of Touchdown Ventures . David has been referred to me by more than a dozen individuals that I trust very much in the industry. It was with great excitement when David replied promptly to my outreach about participating in the Newsletter. More to follow on who David is and his recommendations on CVC.

Touchdown Ventures’ Origin Story

David graduated from the University of Michigan in the late 1990s and it’s not without pride that he states that he has returned to join the University of Michigan faculty in 2024 where David is teaching venture capital to undergraduate students. It clearly shows the full circle of his knowledge and willing to contribute and pay it forward to the next generation.

David started his career in Investment banking but went into Corporate Venture Capital joining Comcast Ventures in the year 2000 and stayed for almost 15 years. David looks back at his time at Comcast with great pride.

“I was there for almost 15 years and there were a lot of success both in terms of financial performance, but also strategically for Comcast. Nearly every new business that Comcast got into during the time I was there had some tie to the Venture Capital division either we had found the startup that was a technology solution or vendor or Comcast acquired some of these start-up companies so CVC at Comcast became really impactful”

Leveraging his 15 years of experience David together with Scott Lenet and Rich Grant founded Touchdown Ventures 10 years ago in 2014. As David describes it the inception of Touchdown Ventures roots back to a need in the market for seasoned CVC expertise outside the traditional tech sphere and we recognized an opportunity to cater to this demand.

“We saw a big market need...especially non-technology companies that are getting into corporate venture, but they don’t really have anybody on their team with any corporate VC or VC experience. This gap led to the creation of Touchdown Ventures, aiming to blend strategic corporate objectives with the robust dynamism of venture capital”

How has Touchdown Ventures tailored its approach to suit the unique needs of its corporate partners

Touchdown Ventures has a foundational understanding of corporate venture capital (CVC) and a sophisticated ability to leverage synergies that benefit our corporate clients. Their approach is deeply ingrained in a meticulous onboarding process that sets the stage for a fruitful collaboration.

David explains,

“We have honed a robust method for initiating and integrating corporations into our venture framework, which is a cornerstone of our success. This includes a comprehensive strategy phase lasting about 90 days. During this period, we conduct extensive interviews with board members and executive leadership to gain a profound understanding of their current strategic objectives."

The onboarding process culminates in the crafting of a tailored venture capital strategy designed to align directly with the corporation's long-term goals. David adds,

“We collaborate closely with each corporation to develop a customized venture capital strategy that not only meets but anticipates their strategic needs, ensuring that we are not just reactive but proactive in our engagements.”

This approach has proven effective with more than 20 corporate clients, significantly impacting their strategic ventures.

From my own experience in the industry, it is evident that many corporations could benefit from this level of detailed research and strategic planning. Properly implemented, such a strategy can dramatically extend the typically short industry average lifespan of 3.7 years for a CVC.

Moreover, the method by which Touchdown Ventures collaborates with its clients underscores a profound understanding of the necessity for corporate engagement to fully realize the potential synergies. This tailored approach not only fosters alignment but also drives substantial value creation through strategic venture investments, making Touchdown Ventures a leader in the CVC space.

Additionally, David shared a blog that he wrote outlining Five Reasons Corporate Venture Capital Programs Fail . The number one reason David cited was “lack of objectives and overall strategy” related to the corporate venture program.

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How would you explain the concept of VCaaS to someone unfamiliar with it, and what makes it a revolutionary approach in the venture capital landscape?

David elaborated on the concept of Venture Capital as a Service (VCaaS) by emphasizing its unique positioning in the venture capital landscape, especially tailored for corporate entities. He explained that traditionally, corporate entities had two primary approaches to engaging with venture capital: either passively as limited partners in venture funds, where they might gain insights and deal flow but without significant control or strategic integration, or by attempting to manage their own corporate venture capital operations, which poses its own risks including the challenge of assembling and retaining a skilled team.

VCaaS, as pioneered by Touchdown Ventures, bridges these approaches by combining the professional management and strategic rigor of traditional VC with the flexibility and control desired by corporations. David described this as the "ultimate model" because it integrates the advantages of professional venture management with the bespoke needs of each corporate partner.

One of the revolutionary aspects of VCaaS, as highlighted by David, is the ability to maintain control over investment decisions while leveraging the extensive networks and expertise of a seasoned VC firm. This arrangement allows corporations to foster innovation and drive strategic growth without the traditional overhead or the steep learning curve typically associated with setting up and running a standalone corporate venture operation.

Touchdown Ventures, through its ?VCaaS model, provides corporations with a "scaled platform" behind their venture efforts. This means not just expert advice or investment management, but a comprehensive ecosystem including access to an extensive network of VC firms, startups, and industry relationships, which a corporation on its own might find challenging to develop. This scalability and the depth of resources offer a significant advantage, ensuring that corporate ventures can more effectively meet strategic goals and optimize investment outcomes.

David’s description underscores the substantial stability and ongoing value creation that VCaaS offers, making it not just an alternative venture capital model, but a fundamentally better approach for companies that want to engage deeply in innovation without diluting their focus from core operations. This model, according to David, is not only sustainable but can be superior in integrating strategic goals with venture opportunities, thereby enhancing the overall impact and effectiveness of corporate venture initiatives.

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A look at the person behind – David Horowitch

Beyond his notable professional achievements, David Horowitz’s approach to leadership and business is profoundly shaped by his personal values and life experiences. At the core of his philosophy is the value of empathy. David emphasizes,

"Empathy—which means putting yourself in someone else’s shoes—is crucial, not just in our dealings with corporations but across all our interactions, whether it be with corporations, start-up executives, or other venture capitalists.”

This commitment to understanding others' perspectives goes beyond mere business transactions; it is about forging genuine connections that foster a collaborative environment, conducive to innovation and mutual growth.

As mentioned in the beginning of the newsletter David’s role as a professor teaching venture capital at the University of Michigan also illuminates another dimension of his character: his passion for education and mentorship. "Teaching at my alma mater has been a gratifying experience, allowing me to give back and share my knowledge with the next generation of venture capitalists," he remarks. This dedication to education underscores his belief in continuous learning and development, principles he instills within the culture at Touchdown Ventures.

Furthermore, David’s interest in board games reveals his creative and strategic thinking skills. He shares an anecdote about developing a board game inspired by the intricacies of frequent flyer programs, highlighting his ability to transform everyday experiences into opportunities for creativity and problem-solving. David launched the board game frequent flyergame in 2021 during COVID.

“Board games have always been a part of my life, offering a fun way to challenge the mind and strategize, which parallels the complexities we often navigate in venture capital.”

These facets of David’s life—his advocacy for empathy, his commitment to education, and his creative hobbies—paint a picture of a leader who is not only successful in the boardroom but also deeply engaged in personal growth and community contribution. His journey reflects a blend of professional rigor and personal passion, driving him to build environments where people are encouraged to learn, innovate, and connect on meaningful levels.

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Advice to young people in the industry

David strongly believes that the environment in which one starts their career can profoundly impact their professional growth and success. He emphasizes the critical importance of selecting a firm that prioritizes a culture of mentorship and personal development.

?David elaborated on this by stating,

"You should join a firm that has these cultural values of mentorship, training, and development. Ask questions in the interview process. Do your diligence. Talk to current or former employees to ensure you know what you are getting into."

His advice underscores the idea that young professionals should actively seek out environments where they are not just employed but are also nurtured and encouraged to grow. This involves probing potential employers about their commitment to developing their staff—how they handle training, what opportunities for advancement exist, and how they support ongoing education and skill development.

David's own career trajectory, marked by mentorship from seasoned executives, illustrates the transformative impact of mentor-led growth. He credits his success to the guidance and insights provided by experienced mentors during his formative years in the industry. This foundational support not only helped him navigate the complexities of venture capital but also instilled a lifelong commitment to mentorship, which he now extends to others.

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Conclusion

"It was extremely inspiring talking with David. Throughout our conversation, David referred multiple times to the Touchdown Ventures blog on corporate venture capital titled "Risky Business" on Medium. The link can be found in the comment field below. I've read several of the articles and highly recommend them, as they encapsulate key learnings from many years of experience as well as insights into the market."

I hope you enjoyed this week's newsletter. If you have any suggestions or contributions that you would like to share with me, please do not hesitate to reach out. I would be delighted to hear from you.