The European VC (EUVC)
E658 | Martin Scherrer, Redstone VC: CVC Secondaries Without Burning Bridges
The European VC (EUVC)
•November 28, 2025•42 min
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The European VC (EUVC)•Nov 28, 2025
Key Takeaways
- •CVCs need portfolio mindset, not single investments.
- •Secondary sales often require 50‑80% discount on NAV.
- •External specialists smooth runoff and preserve founder relationships.
- •Align financial and strategic goals to avoid bridge‑burning exits.
- •Corporate LPs demand clear operating manuals and performance‑based structures.
Pulse Analysis
In this episode, Martin Scherrer of Redstone explains how the firm blends classic venture capital with a "VC-as-a-service" model for corporates and family offices. The conversation opens with the recent shutdown of Munich Re’s corporate venture arm, framing the urgency of mastering CVC secondaries. Scherrer outlines Redstone’s dual expertise—deep founder experience and institutional VC know‑how—positioning the firm to guide corporates through the delicate process of winding down a venture portfolio while preserving strategic relationships.
The hosts dive into the mechanics of a runoff. Scherrer stresses that corporates often view startup investing as a one‑off, yet successful CVCs treat it as a true portfolio, balancing strategic and financial returns. When a corporate decides to exit, secondary buyers typically demand 50‑80% discounts on net asset value, making a quick sale unattractive for value‑maximizing owners. Redstone’s approach, illustrated by the Score and Helen Energy case studies, relies on external specialists who can rapidly onboard dozens of portfolio companies, assess board positions, and run scenario analyses—sell now, secondary in the next round, or hold to exit. This method protects founder interests and maximizes eventual liquidity.
Finally, Scherrer outlines best‑practice governance for corporate LPs. Clear operating manuals, defined decision rights, and performance‑based fee structures align financial incentives with strategic goals, preventing bridge‑burning exits. He advises that when a corporate is the sole LP, the fund essentially becomes a CVC, requiring a balanced investment committee and the option to spin out or bring in third‑party capital to safeguard the portfolio. By marrying rigorous VC processes with corporate strategic objectives, Redstone helps firms transition smoothly, retain founder goodwill, and ultimately extract the most value from their venture investments.
Episode Description
Corporate venture capital isn’t just having “a bit of VC on the side.”
Done well, it’s a strategic lens on the future. Done badly, it’s a short-lived pet project with a half-life of 3.7 years and a trail of confused founders and annoyed co-investors.
In this episode, we sit down with Martin Scherrer, Partner & Head of Managed Funds at Redstone, alongside our own CVC lead Jeppe Høier, to unpack what really happens when corporates leave venture — and how to do it without destroying value or reputation.
Redstone runs a dual model: classic VC funds + “VC-as-a-Service” for corporates and family offices. Martin himself has lived three lives:
Inside Swiss Re’s CVC (later shut down)
As a founder of an insurtech in Switzerland
Now as VC & fund manager at Redstone across multiple corporate mandates.
🎧 Here’s what’s covered:
01:37 Why Martin? Why now? — Jeppe on Redstone’s VC-as-a-service role, his history with them, and why Martin is the go-to voice on CVC secondaries.
02:50 Redstone in both worlds — Martin explains Redstone as a VC + CVC-as-a-service platform with deep corporate, VC, and founder roots.
06:12 Portfolio thinking 101 — Why corporates underestimate startup investing, ignore the J-curve, and must commit to true portfolio construction + financial KPIs.
09:37 Runoff vs. selling the bag — Score case: options to sell the whole portfolio at a 50–80% NAV discount vs. patient value-maximising runoff.
13:54 Spin-outs & resilience — How CVCs can evolve into mixed-LP or fully independent VC funds (Swisscom Ventures, Berliner Volksbank → Redstone Fintech III).
18:27 Follow-ons in “shutdown mode” — Why corporates sometimes should still fund follow-ons in runoff to unlock new investors and protect upside.
20:25 Designing the partnership — Governance, IC design, reporting (e.g. IFRS 9), and performance-based structures that align Redstone and corporates.
31:41 Managing vs. buying portfolios — How Redstone runs CVC runoff as an external manager with fees + carry, versus secondary buyers who acquire the assets outright.
44:02 How to avoid a wind-down — The “gold standard”: bring in third-party LPs, avoid annual-budget setups, ringfence capital in a dedicated entity, and keep exec sponsors close.
Show Notes
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