Corporate Venture Arms: Are They Worth It?

Should you take money from a corporate venture arm?

Here are some quick Pros and Cons of doing so:

Pros:

• They can be very strategic in making industry connections (especially with other companies they have invested in
• They can often become a customer themselves
• Bring technical expertise and resources unavailable to early-stage venture companies

Cons:

• Often have conflicting mandates, invest for return and invest in finding acquisitions
• Due to incentives many of the partners at CVC’s leave (which is your internal champion)
• At times there are inferior terms (exclusivity on acquisitions, Right of first refusal, and in the worst case invest to stamp out competition).
• While they could become customers, CVCs are often on an island and don’t speak for the company in becoming a customer