How to Collaborate with Corporate Venture Capital

Most fundraising advice focuses on institutional VC, but corporate venture capital now accounts for a fifth of all U.S. venture deals. This guide speaks specifically to entrepreneurs on how to raise capital from corporations — a fundamentally different process with different motivations and timelines.

Most of what is published about venture fundraising tends to focus on traditional, Institutional Venture Capital (VC). Little has been written that speaks specifically to how entrepreneurs can successfully raise capital from corporations. Over the past 10 years, Corporate Venture Capital (CVC) has grown substantially. Today around a fifth of all U.S. venture deals involve corporations. Historically, CVC was seen as a poor option for entrepreneurs due to a reputation for demanding restrictive and economically lopsided deal terms from entrepreneurs. But CVC has matured and changed. Today it is far more competitive and entrepreneur-friendly. For the right kinds of ventures (particularly B2B ventures), CVC is not only a viable option, but may be more helpful than institutional venture capital. Throughout my career, I have spent time on both sides of the table—both raising capital for, and funding, new ventures—often in corporate settings. CVC can be fruitful option for entrepreneurs, but securing it, and using it wisely, requires a different approach than raising traditional venture capital. The CVC opportunity Is Corporate Venture Capital worth pursuing? To answer that question, consider how CVC may be uniquely suited to help your venture grow and succeed. Successful corporations approach venture with a dual focus on not only financial returns, but also strategic returns. Strategic returns consider all the other ways a corporation may benefit by working with the ventures—from access to new technology to the chance to commercialize new product offerings. This focus on strategic returns means corporations may be better positioned than traditional VCs to help entrepreneurs develop their ventures. They can provide valuable engineering and product knowledge, offer quicker insight into commercial markets, assist with testing or piloting products, open up new channel relationships, and become a customer, or even an acquirer. For many companies, these powerful benefits can not

By Andy Annacone at TechNexus Venture Collaborative