Key takeaways
- Strategy and returns both count, in proportions each CVC defines.
- Approvals often involve business units and corporate governance.
- Founders ask about information rights and conflicts before saying yes.
How corporate venture capital differs from VC
| Financial VC fund | Corporate venture capital | |
|---|---|---|
| Money | Raised from limited partners | The parent company's balance sheet, or a fund it backs |
| Goals | Financial returns | Returns plus strategic value to the parent |
| Approvals | Partners or investment committee | Committee plus corporate sign-off, often a business unit sponsor |
| Founder concerns | Terms and support | Terms, plus confidentiality, competitors and signalling |
An example
A fictional logistics group's venture team invests in a route-planning startup. A business unit runs a paid pilot first, and the startup's board agrees that the corporate investor receives financial updates but not product roadmaps that could help the parent's own software team.
How CVC teams handle deal flow
CVC teams often screen against two lists: the investment thesis and the parent's strategic priorities. They also need clear records of who saw a startup's confidential material, because the parent may build or buy in the same space. See Delsivo for corporate venture capital.
Common confusions
- CVC versus corporate development: corporate development buys companies; CVC takes minority stakes.
- CVC versus venture client: a venture client buys a startup's product without investing.
- A CVC investment is not a promise of a commercial deal, and founders should not assume one.