Geoff McGrath, McLaren Applied Technologies
Gaule's Question Time: A track record in investment for the future
the second of a series of monthly interviews with leading venture
investors, Andrew Gaule, founder of the H-I Network and Corporate
Venture Senior Executive Forum, talks to Geoff McGrath, managing
director of McLaren Applied Technologies, at the factory and Formula 1
centre in Woking. To listen to the audio, click here. For second half of interview about linking to the core click here .
Gaule: Can you give us a brief description of the McLaren approach to venturing and how it exploits its capabilities?
McGrath: McLaren Applied Technologies [www.mclarenappliedtechnologies.com] works along the principle of open innovation and manages a network of entrepreneurial technology companies in order to accelerate the route to market entry for new solutions. This programme is analogous to corporate venturing insofar as we invest our time and expertise to prequalify technologies for inclusion in our jointly-developed solutions and we actively seek investment for such joint ventures.
Gaule: What have been your most interesting recent ventures?
McGrath: McLaren Applied Technologies has most recently been engaged in venture backing for initiatives involving remote monitoring and real-time data analysis for sports and health applications that leverage our expertise in telemetry, data processing, modelling and simulation to provide information in a timely, relevant and clear format for professional users, from nurses and doctors to sports coaches.
Gaule: What are the opportunities for investments and fundraising?
McGrath: Markets are difficult and it is increasingly difficult to raise funds for prerevenue opportunities. That said, with the right partners and a first few wins, the potential for investment in a growth opportunity is good.
Gaule: What have you seen as the most challenging issues when managing the relationship with core business?
McGrath: Critical to the success of a joint venture relative to core business is the understanding across the group of the likely exit strategy and the protection for intellectual property that is spun off in future. Really the challenge is to clearly demarcate the boundaries between core IP and that which will be spun off and to communicate the opportunity across the organisation so it is viewed in a positive light and supported fully.
Gaule: A number of H-I Network members are considering technology spin-outs or collaborations. What do you see as the top three challenges?
McGrath: Top challenges may be described as follows:
l Choosing the partner with complementary technology, culture and shared ambition and drive.
l Forming an effective integrated team in a joint venture that has a single culture.
l The legal burden to establish the entity often puts people off forming a joint venture until funding is available.
Gaule: What do you do to relax when you are not building your ventures?
McGrath: I like to watch others doing sport - Formula 1, football and rugby. I like to cook for others and play flamenco guitar strictly for myself.
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The full, 15-minute interview is available to listen to here.