There is no single blueprint for corporate venture capital. The strongest CVCs design their models around their parent company’s strategy, priorities and appetite for risk.
Last week we showcased three very different corporate venture units: MSD’s $600m Global Health Innovation Fund, which has been operating for nearly two decades; Snowflake Ventures, founded in 2020, which invests from the corporate balance sheet with a close eye on creating ecosystem alliances for the parent company; and CVS Health Ventures, now five years old, which operates a $150m evergreen fund and has seen its mandate widen from early-stage investing to a multi-strand strategy including fund investments and growth equity.
What struck me was not simply how different these models are, but how specifically each has evolved to address the problems of its parent company.
Take Snowflake Ventures. Parent company Snowflake is locked in an intensifying battle with rival Databricks, as each encroaches on the other’s territory in the race to establish itself as the core platform for corporate AI applications. The venture arm therefore becomes an ecosystem-building tool, funding startups that build applications “Powered by Snowflake”. Investment from the company requires deep product-roadmap integration with Snowflake’s AI Data Cloud, anchoring enterprise data in the Snowflake ecosystem rather than Databricks’ Delta environments.
MSD’s investment arm, meanwhile, has been a mechanism for taking the pharma company into digital healthcare, investing in data and AI well before the current boom. Its mission is about modernising the business, increasing efficiency and keeping strategic options open — which requires a close working relationship with business units.
CVS Health faces a very different problem: intense margin pressure from the rapidly rising cost of pharmaceuticals. There is an explosion of demand for anti-obesity GLP-1 drugs, while patients are also demanding expensive gene therapies and complex oncology biologics. CVS, which operates an insurer, pharmacy benefit manager and pharmacy, feels those rising costs across its business. CVS Health Ventures is therefore looking for ways to improve the economics of healthcare from multiple directions: investing in obesity-care platforms that can help manage the cost and distribution of drugs, using AI to reduce administrative costs and friction, and backing solutions that move care out of expensive hospitals and into the home. Given the range of problems it needs to tackle, a multi-pronged approach makes sense.
There is a lesson here for anyone trying to design the “right” CVC model: there probably isn’t one.
Corporate venture arms are not only as varied as the companies they serve; they are shaped by the particular strategic problems those companies are trying to solve — and those problems can change.
That makes some of the perennial arguments at CVC conferences rather less useful than they appear. Is an independent evergreen fund better than investing from the balance sheet? Is it better to report directly to the CEO, or sit within strategy or finance? A small, nimble IC or one that pulls widely from across the company?
The answer is always: it depends.
The more interesting question is whether the structure is actually helping achieve the job given to the CVC.
That brings takes us back to something we have been trying to understand for more than a decade at GCV: what are CVCs actually doing, and what results are they getting?
We have just launched our latest GCV Keystone annual survey to build that picture. As corporate venture grows — both in numbers and in influence across the wider venture ecosystem — the industry needs better benchmarks to understand which approaches are working, where they are falling short and how leading teams are adapting.
So if you work in corporate venture, please take part in the survey. It is detailed because we want to get beyond the usual questions about fund size and investment volumes and understand how CVCs actually operate.
Your answers are anonymised, and everyone who completes the survey will receive an early copy of the resulting report.
There may be no single right way to run a CVC. But the more we know about what everyone else is trying — and what is actually working — the better equipped the whole community is to work out what is right for them.
This editor’s note was first published in GCV’s Blueprint newsletter, which tracks corporate venture news, key deals, new funds best practice and jobs.
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Maija Palmer
Maija Palmer is editor of Global Venturing and puts together the weekly email newsletter (sign up here for free).
