Provide an elaborate discussion and at least one in-depth reply.
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Discussion based on: Laufer, R., Lane, D., Hamermesh, R. G. (2006). Corporate venture capital at Eli Lilly.
Here are some of the significant questions to analyze this case. Take at least a couple of issues that you consider most interesting to you and discuss your thoughts on those and respond to at least one other person’s discussion. Provide an elaborate discussion and at least one in-depth reply. 1. What is the role of corporate venture capital?
2. What is your assessment of Lilly Ventures?
3. What should Darren Carroll do regarding the potential investment in Protagonist?
4. What other recommendations would you have for Darren Carroll?
5. Poll Question – Should Lilly Ventures invest in Protagonist? I also need a response to the following post: Olivia’s post What is the role of corporate venture capital?
The role of corporate venture capital varies depending on the industry. For example, the article states that chemical and pharmaceutical companies use venture investments mainly to learn about, license, or acquire innovative compounds, properties or intellectual property or it could be part of a collaboration agreement between firms to cooperate in development, marketing, or sale of products that each individual partner would not be able to create alone. This can also offer backing of a large company and potentially extend to be able to assist in offering capital and or expertise that they may not have access to.
What is your assessment of Lilly Ventures?
I think that Lilly Ventures is unsure of what they want to get out of CVC. I also do not believe they are knowledgeable enough to know what their vision is for being a CVC. I feel that they need to come up with a better plan of action on investing in VCs. I think they are only focusing on equity from being a CVC instead of also including their idea of what Lilly Ventures overall goal of investing in VCs. Although it’s normal for a company to have some problems during development, I think that they need to communicate more frequently and effectively within Lilly Ventures and that they need to improve their strategic needs for the company.
What should Darren Carroll do regarding the potential investment in Protagonist?
The main concern is that no other U.S. investors are interested in Protagonist. They are conducting further research to see why other U.S. firms are hesitant to invest. One issue that is causing problems with luring U.S. investors is the location of Protagonist. While this could bring potential cost reduction benefits, the distance and time difference makes this difficult for co-investors because many investors like to be located close to the companies that are in their early stages. This can also be expensive when trying to keep effective communication with a venture that is halfway across the world, especially with the fact that this issue was happening in the early 2000s. And even though there is talk about relocating the company to the United States, there are a lot of benefits to keeping Protagonist in Australia as relocated would cost the company a lot of time and energy to get them back up and running again. I don’t believe this would be a major issue today as our technology has advanced significantly.
What other recommendations would you have for Darren Carroll?
I believe that Darren Carrol needs to help them strategically align better so that any potential investments are a strategic fit with Lilly. There also needs to be better goal alignment for companies seeking to gain resources from corporate venturing. They need to adopt policies and procedures to manage the resources, knowledge and networks offered by Protagonist and be able to collaborate with its partners to help better suit Lilly’s interests. With strategic alignment, it will also help retain the important team members and create powerful incentives for their team. I believe that they should partner compensation with the success of investments as this will lead to better employees and profitable investments.
Poll Question – Should Lilly Ventures invest in Protagonist?
I believe that Lilly Ventures should invest in Protagonist as it is a promising project for them to take on. While it is a big commitment of time and energy to manage, I find that this project would be beneficial for Lilly Ventures overall as it robust and the financial benefit is too great for them to throw in the towel and walk away.
