CVC is not Monolithic: The Four Strategic Use Cases for Corporate Venture Capital

Corporate Venture Capital is not monolithic — there are four distinct strategic use cases that drive very different outcomes. With over 4,000 CVC funds worldwide participating in 26% of global venture deals, this framework helps corporations choose the right approach for their innovation goals.

CVC is not Monolithic The Four Strategic Use Cases for Corporate Venture Capital Corporate Venture Capital (CVC) has grown considerably over the past ten years. According to Silicon Valley Bank, the number of Corporate VC funds worldwide has expanded to over 4,000, and in 2021 those funds participated in ~26% of all global venture deals. In today’s world, the value of CVC as a strategic tool has never been greater —nor has it been more imperative. Given these trends, more and more corporations are launching or expanding venturing programs. But we find Executive teams often approach corporate venturing too narrowly. CVC is a powerful tool to not only earn financial returns, but to accelerate innovation, build ecosystems, and drive transformative business growth. CVC is not monolithic; it’s multi-dimensional, with four main strategic use cases. The following is a framework to help establish which kinds of CVC program(s) are right for your company. The Four Strategic Use Cases A simple way to think about the various strategic use cases is to consider where to focus efforts along two dimensions: A focus on strategic-first returns versus financial-first returns (Financial returns are defined as a corporation’s share of the value of a venture and strategic returns are defined as the value the corporate can itself create because of a venture) A focus on the corporation’s business model (internal growth & optimization) versus external ecosystem development (outward on partnerships, collaborators). Together, these dimensions frame four different use cases, each meant to target a different strategic outcome (Figure 1) . Answers to these choices do not need to be binary (i.e., you can target both strategic and financial returns), but the selections a corporation makes reveal where, and why, a corporation should be using venturing. Traditional Venture Capital A commonly understood use case is to follow the traditional venture capital model. Here, the corporation plays the r

By Andy Annacone at TechNexus Venture Collaborative