Ganguly and his staff of four, evenly split between Akron and San Francisco, still conduct due diligence on their prospective investments—at the very least, they want to form relationships with partners that have staying power—but the emphasis on strategic alignments gives them some leeway. They invest in some very early-stage companies, as well as some who have already previously raised significant amounts of capital and are well along in their efforts to take their products to market and grow.
"We are a stage-agnostic corporate venture capital fund," Ganguly said. "If the strategic fit is strong, we will invest in the company and start working with them on a strategic basis."
It's an approach more and more large companies like Goodyear have been taking in recent years, Scott Shane, founder of Shaker Heights' Comeback Capital, said. .Shane's firm links investors from outside the region with companies in the Midwest seeking capital. He's also a professor of economics who teaches venture capital and entrepreneurship at Case Western Reserve University.
"With corporate venture capital, you have this array where this pretty large number, maybe 40-ish percent of corporate venture capital, is purely strategic in nature, or almost purely strategic," Shane said. "And Goodyear would be in that camp."
That strategy also means that corporate venture capitalists measure their success differently than their financial counterparts do, which Shane said also allows the corporate funds to sometimes pay more for their investments as well.
"Let's say with the $100 million fund of Goodyear, when it's done, there's no profit — all they do is get their $100 million back. For a traditional venture capitalist, that's a failure," Shane said, "but if they found a single thing that enhanced productivity at a Goodyear factory or something like that, and Goodyear reduced a cost by 10%, that's a huge win for the company even though the fund doesn't look like it made a return. … The CEO of the company would be extremely happy with that."
Toward such ends, Ganguly said his team links the portfolio company with other people in Goodyear's operations.
"We stay engaged until that relationship and linkage is solid and strong, and then it falls on the people within the companies to take the work forward," Ganguly said.