Comment by Nicolas Sauvage, president, TDK Ventures

In a recent article, we reviewed the prolific rise of first time CVCs in the venture capitalist investment space since the beginning of the covid-19 pandemic. TDK Ventures and GCV surveyed CVCs across the globe between April 2020 and June 2021, 49% of investors were first timers getting their start during the pandemic. Initially we hypothesised this would of course be due to the changing demands of the pandemic itself, however, digging deeper through conversations with Professor Claudia Zeisberger of INSEAD Business school, there is something much deeper at play. On a more fundamental level, this huge influx of new participants in the CVC space has stemmed from many corporations collectively recognising the critical need for renewed agility and awareness in today’s dynamically changing world. Circumstances, such as covid-19, as well as new innovations and breakthroughs can rapidly disrupt entire business sectors faster than ever before, starting altogether new megatrends. Instead of flexing business practices temporarily just for the pandemic however, corporations are instead learning from the crisis and looking to make permanent changes in practice to ensure stability through future instabilities. Thought leaders are realising the key to agility and awareness is to be on forefront of the state-of-the-art, identifying new technologies and even nurturing and shaping their path – turning potential challenges or even threats into new opportunities and partnerships. The scales have tipped The same GCV Institute report was recently updated extending the data to include up to March 2022. Results show the 50/50 balance of the scale has now tipped and 52% of CVC investors were first timers since the beginning of the covid-19 pandemic (2,092 of 4,062 surveyed). That is right, the trend continues to persist even more corporations are catching on and beginning to get involved in CVC investing to keep aware of state-of-the-art innovations in their respective industries. This suggests that more businesses are seeing that the new normal previously mentioned is not going anywhere and that new business practices are indeed warranted. Similar to the concept of diffusion of innovation popularised by Everett Rogers, we may be witnessing the idea of having a corporate venture capital arm catch on as participation extends from the more innovative and risk accepting entities, to more mainstream popularity. Two immediate repercussions to consider however, are what this means for first-time CVCs as they break into a dynamically evolving space, and what this means for entrepreneurs as potential partnerships with a CVC becomes more and more probable. Developing CVC…

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