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While corporate investing has many similarities to traditional venture capital investment, at its essence it’s a different beast. There are different elements to consider, different priorities, different (and typically, many more) stakeholders, and a whole host of added complications.

Corporate investors have strategic goals as well as financial, and strategic goals are much harder to measure and prove. They have a complex web of relationships to manage (both external and from a range of directions internally) that can result in fruitful results for all involved but can also cause serious headaches.

Corporate innovation has the power to change the world when it’s done right.

Done badly, it can become a money pit lined with bad blood.

For an in-depth guide in all things CVC, Corporate Venturing: A Survival Guide is essential reading.

The GCV Institute also offers a host of in-depth and hands-on courses for professional CVC development and certification. Explore the full range here.

The GCV network has a rich network of experience and knowledge, and this page is the home for all the articles, guides and advice pieces we have created on the art of being a CVC.

 

Read this before you start
Things to avoid 

Five corporate investing pitfalls to avoid

Corporate investors have a more complicated role to navigate than financial VCs.

These five strategies can help smooth the job.

Things to prepare for

These things surprise financial investors when they move into CVC 

Cogent Venture Partners’ Mario Augusto Maia talks about the transition from financial asset management to CVC, and how to deal with the hurdles involved.

Difficulties and fears

The difficulties and fears startups have around corporate investment

Corporate investors can have a bit of a bad reputation among startups.

But what are the main worries and fears, and how can they be allayed?


Running a CVC team

Running a corporate venturing team isn’t the same as managing a run-of-the-mill office team. Of course you need everyone to get results, work together to pull in the same direction, and ultimately get along, but there are several quirks and considerations that only corporate venturers understand.

The secret sauce of corporate investing is creating opportunities for portfolio companies and parent company business units to collaborate. Building internal networks is what will transform good results into excellent results. Chad Bown of BP and Nicole Lapointe of Capital One share tips on building them.

Even if you’re an extremely experienced corporate investor, you still might never have had to lead a funding round.  If it’s something you’re building up to, here’s how.

If your CVC team has met with a degree of success and you need to scale your team, here’s how to take your unit to the next level.

Creating a culture of innovation is a great way to lead by example when it comes to looking for innovation outside of your parent company. It allows your unit to be truly effective but it can be a difficult culture to create, especially in a restrictive corporate sphere. Jonny Crowe of Liminal Ventures knows how to do it.

Building a diverse CVC unit is equally important for eliminating blindspots and truly thinking outside the box. Our in-depth piece explains how to take action.

There are also important things to consider when it comes to a portfolio company forming its board. There are strategic considerations to be aware of.

And finally, compensation doesn’t tend to work the same as it does within the traditional venture capital industry. We investigated how different units handle CVC compensation, to help you navigate this hot topic.


The business development function

You might not be aware that corporate investment units with business development embedded in their teams tend to outperform those without. This is why business development has become such an important department of successful CVC units.

If you don’t currently have a business development function, here’s why you might want to consider getting one.

It’s not just about the money, startups are now coming to expect it when they take corporate investment. So if you’re competing in a crowded investment market, it will make you stand out to companies looking for the best investor. Here’s why it’s important from the startup perspective.

So, now you’ve decided you definitely need a business development function, here’s how to build it.

Taking LP positions
Investing in other funds

How to get the most out of investing in other funds

Finding funds that are willing to collaborate and engage with their limited partners is one of several pieces of advice on fund-of-fund investing.

External money

Five tips for CVCs who want external LP money

If a CVC unit wants to bring in outside money, it needs a great track record, a unique angle and skin in the game.


Venture building

Venture building is increasingly becoming an alternative tool to investing in startups. Corporates choosing to build their own ventures from business ideas that evolve inside their organisations is a strategy that has enjoyed a recent surge in popularity. But it isn’t a new idea – large corporations have always done it.

As startup valuations have become excessively high, building your own startup is often seen as a less costly route than buying one.

If it’s something you’re thinking of starting at your own unit, you need to know how to build a venture and how to make it a success.


Small funds

According to our most recent GCV Keystone annual global survey of corporate venturing units, some 38% of CVC funds are smaller than $50m.

A smaller fund is often the way corporates begin experimenting with startup investment.

For companies without unlimited coffers, a $150m commitment might be a non-starter, but $50m is easier to sell to the CEO and board. Sometimes, when a small fund has been successful, bigger fund allocations will follow.

These are the ways to make the most out of even a small initial pot.


Big funds

The number of large funds are on the rise. While the enormous Softbank Vision Funds have caught a lot of the headlines in recent years (both positive and negative), there are several units that have more quietly grown their capital to a 10-figure level, including the investment arms of oil and gas major Saudi Aramco, pharmaceutical firm Bayer and telecoms, IT and consumer electronics manufacturer Nokia.

While a big fund has many advantages, especially in the ways it can support portfolio companies, there are downsides too.

Seed-stage investing
Tips

Six tips for investing in seed-stage companies

More corporate investors are turning to seed-stage investing to get early exposure to new technologies. But it requires a different skill set to what CVCs are used to.


Intrapreneurship

It is hard to build an agile, innovative startup inside a big corporation. There is a tension between the desire to innovate like an agile startup and the realities of how corporates operate and are measured

But it’s not impossible.

While there’s no hard and fast recipe to make “intrapreneurship” work, here are five tips to make sure your internal startup returns value to your corporate master and avoids the innovation graveyard.


Handling a downturn

Downturns are an inevitability, it’s impossible for things to be on the up indefinitely. And with the UK and Japan officially in recession, it’s either already happening, or it’s happening soon.

If a parent company is feeling the heat, it might think cutting its CVC function is the easy way to cut costs. Here’s how to navigate your unit through trickier times.

Down rounds could also raise their heads, and while they can feel like a painful let down for both the company and investors, there are ways to make the process easier.

Startup failure is also part and parcel of venture capital, and it happens more often during a downturn. If a corporate wants to bring an investment relationship to an end, there will be difficult conversations to be had. Here’s how to manage them. 

 

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