Investment management
Most CVC programmes do not require formal business-unit sponsorship at the point of investment, although post-investment engagement metrics are becoming increasingly important.
There is also a clear shift away from corporate investors asking for aggressive strategic rights. Some 42% do not negotiate any special rights and:
To both provide and derive value from strategic investments, 92% of surveyed CVCs look for some form of board representation, with 63% (up from 58% in 2025) taking both board and observer seats, 28% observer only and only 8% neither. For 93%, the CVC investment professional holds the board or observer seat, though 35% will sometimes designate corporate parent representatives, most often as observers.
With more CVCs taking board and/or observer seats, many small teams are facing capacity crunches for qualified board or observer representatives. 19% report holding six or more seats and 42% have no maximum limit. For established programmes in North America and Europe, 41% limit the number of seats per qualified team member to 5 or less.
Performance and portfolio management
Measuring performance is one of the most challenging aspects of running a corporate venturing programme, with (financial, strategic, and operational) metrics and dashboards guided by the CVC charter and informed by programme maturity phase, operating model, and corporate culture. More than one-third (37%) of programmes with more than $300m in assets under management now employ a dedicated chief operating officer or portfolio manager to handle reports to the parent corporation as well as other non-investment-related functions.
Financial performance
Competitive financial metrics tend to grow in importance with CVC programme maturity and scale and are seen as a necessary part of ensuring unit longevity.
Survey results show that standard VC metrics such as IRR (78%) and total value-to-paid-in capital or TVPI (66%) are the language of financial performance for most CVCs. Other important metrics are estimated fair market value of portfolio (64%), multiple on invested capital or MOIC (54%), exits (54%), distributions to paid in capital (52%) and return on invested capital against a corporate hurdle rate (34%).
90% of CVCs have financial performance targets, with more than half (52%) aiming for VC-level (1.6-2/5X, 16-24% IRR) or top quartile financial returns. This number rises to 57% if newer CVC markets like Japan and Brazil are excluded. The percentage with ‘no financial performance targets’ stayed constant at 10%.
Across all markets, reported 2025 Gross TVPI and IRR continue to show less than 40% of respondents achieving VC-level performance targets in the face of a challenging exit environment. However, 47% of expansion stage programmes and 59% of resilient programmes say they are meeting those VC-level performance targets. Recorded loss rates have not materially changed.
Financial portfolio management practices are becoming more sophisticated with close to half of respondents using portfolio construction models for fund planning and management and 62% looking to adopt and interpret CVC-specific IFRS accounting standards for valuation, impairment, and investment classification. While 71% rely on event-driven activity to make valuation adjustments, 48% are required to perform quarterly portfolio valuations and 29% annual valuations.
Secondary market sales are becoming part of the portfolio management strategy and toolkit for 23% of CVCs. While nearly two-thirds of sales may be driven by parent (or portfolio company strategic shifts), 55% are looking to manage portfolio financial performance by generating liquidity (DPI) from valuable later-stage companies or exiting underperforming investments (47%). For CVCs with assets under management exceeding $300m, 40% say they tap secondary markets to drive DPI (67%).
Strategic impact is the raison d’être for most CVCs but responsibility for achieving it is often shared with the parent corporation, making it challenging to define, track and communicate performance. As most CVCs have a mandate to find transformative ideas (Horizon 2-3), the ability to communicate insights and provide advice remains the top strategic priority for the vast majority (78%). CVC participation in executive or business unit strategy sessions, and the sharing of portfolio and pipeline reviews were rated the most effective approaches for insights capture and sharing, with trends analysis and ‘storytelling’ seen as critical delivery capabilities.
Reflecting the importance of Horizon 1 innovation in CVC charters, some 69% also focus on parent commercial engagement, the results of which are communicated through a combination of ‘activity metrics’ (number of startups assessed, ‘attach rate’/percentage of portfolio engaged with parent, briefings and advisory projects) and commercial impact ROI (revenues, savings, risk reduction, value of sales to parent), and illustrated with anecdotal success stories. Portfolio – Parent ‘Attach rate’ along the engagement pipeline is an increasingly common metric, with 45% looking to achieve it with more than 50% of their portfolio.
Access and optionality are priorities for programmes with an M&A mandate. Though more than half (52%) of surveyed CVCs play some role in sourcing potential M&A candidates, 55% have yet to see a portfolio company acquisition. Invest-to-acquire mandates are most common in sectors like consumer goods, where 70% of CVCs play a role in M&A, 44% have had portfolio companies acquired (and an additional 11% expect to acquire one shortly), and are measured on and rewarded for their M&A-related contributions.
Contents
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