Entrepreneurs often complain that it's hard to understand venture professionals. Their answers can be packed with venture community code words that make it difficult for rookie entrepreneurs to keep up. But it's worth the effort to learn their verbal shorthand because VC's do provide useful strategic guidance.
In advising you to go to Disney, the VC expert was probably directing you to Disney's own venture fund, Steamboat Ventures. Many large corporations, such as Intel, Procter & Gamble, SAIC, Bechtel, Comcast, Nokia (now BlueRun Ventures), IBM, and Novartis, have their own venture funds. Even the CIA has a venture fund, called In-Q-Tel, to help advance technologies for future government use.
The primary benefit of partnering with corporate venture funds is to gain fast access to large customers. For example, a portfolio company of Chevron-Texaco's venture fund may have an insider's advantage in rolling out new exploration technologies. Similarly, Steamboat's connection to Disney and Touchstone Pictures may provide you the right introductions to test and evaluate your animation tools in real world conditions, and then help you bring the finished product to market.
On the other hand, many entrepreneurs avoid corporate venture funds to protect their proprietary information. They reason that a corporate VC may learn important trade secrets during presentations and then pursue the same business idea on their own. Another concern is the corporate VC may lock up their portfolio companies from selling technology to the corporation's competitors, thereby reducing management's own investment upside and flexibility. Every fund is different, and every investment is different, so ask corporate fund managers about any competitive restrictions as a condition for investing in your company. Simply, move on if you don't like the answer.
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I have filed two patents on a technology that makes animated production easier and less expensive. We'd like to raise money to commercialize our technology for home film making as well as major motion picture production. At a venture capital conference, one expert suggested that I just go to Disney to get some money. How should I go about doing this?
