Jon Lauckner, president of the GM Ventures fund, says General Motors Co. doesn't want to buy pioneering technology companies. It just wants first crack at their innovations.
Lauckner, 52, talked to Enterprise Editor Dave Guilford last week. Key points from the interview:
Why does GM need a venture capital fund?
I think that as we clarify what we think are the key success factors going forward, we've got an appreciation that technology and innovation have to be a big part of the equation. If you want to be known for having brands and vehicles that offer the very best technology, then you're going to have to go out there and try to find the next generation of technology before others get to it.
Is the fund's $100 million budget a one-time deal?
This is an ongoing activity. [In] the first year we're going to put $100 million to work. In subsequent years we'll put together amounts that make sense. There's a definite commitment that this has to be more than a one-shot, one-year type of activity. Otherwise it won't have the value that it needs [and] won't be terribly successful.
Will GM buy startup firms?
No, actually, we're not looking at the fund as a precursor to a mergers and acquisitions activity. It is not intended to do that. We will for the most part have minority positions in these companies, probably a less than 30 percent equity share.
Why not acquire companies?
We've been on a long journey to define what our core business is, including the events of the past year. I don't know that there is a lot of appetite to change the core business from where we are today, and I think you can pretty much capture it with "design, build and sell the world's best vehicles." So it's a vehicle manufacturing business, as opposed to a component business or a very special technology business.
What can GM offer a small entrepreneur?
Somebody has to step forward and say, "We'll be your first customer." If we're investing with these startup companies, potentially we can help them build scale very quickly. We can be, if not their first customer, their first customer in the automotive space.
Being able to deliver the scale that we can deliver is important, because as the old saying goes, you can't grow big companies in small markets.