The traditional startup life cycle is to seek venture capital, grow into a successful business, then exit via an IPO or acquisition. For some companies, however, that initial investment and eventual acquisition come from the same source.
Alex de Winter first ventured into the realm of corporate venture capital as director of GE Ventures, the venerable conglomerate’s investment wing. Now, he scouts new promising companies in the healthcare industry for Danaher Equity Ventures.
“Danaher has grown largely though acquiring other companies,” de Winter says. “Some companies may be too early for us to acquire now but could potentially be interesting in the future. So we invest in them now and hope to help them grow.”
The startups get access to Danaher’s business expertise and connections, while Danaher gets a look at burgeoning technology and an opportunity to vet companies before a potential acquisition—without investing its own money in R&D.
“We get a better sense of where the market is going and which companies might be best positioned to take advantage of [healthcare’s future],” says de Winter. In its first four years, Danaher has invested in some 40 companies in the fields of bioprocessing, life sciences, and medical diagnostics.
In the past, says de Winter, corporate venture capital may not have been the first choice for startups preferring big-name firms. “But some startups are realizing today the benefits corporate VCs bring with access to their networks and help with advice and recruiting,” he says. “It goes beyond just capital.”