What corporations need to know about strategic and financial venture returns

Beyond the strategic benefits, corporate venture investing can deliver measurable financial returns — but only if done with the right data-driven approach. This installment of the What Corporations Need to Know series digs into how to track and maximize both strategic and financial returns from venture portfolios.

In our inaugural post in the What Corporations Need To Know series, I covered corporate venture capital – how common it is, why corporations should consider it, and how to develop an investment thesis and execute on it. In this post, let’s dig a bit deeper … What do corporations need to know about being data driven? Zooming out a bit, data is one of the main currencies of large businesses. Fortune 500 corporations generate more data in a day than they may know what to do with, and the most efficient corporations analyze data constantly in order to streamline operations, improve revenue, decrease costs, and optimize for employee retention. So when it comes to corporate venture capital, it should be no surprise, then, that one of the biggest questions we are asked is “How can we measure success?” Corporations track metrics, OKRs, and KPIs across all business lines, and corporate venture capital and innovation need not be an exception. In conversations with the C-Suite of prospective corporate partners, we address the question of measuring success with another question: “What do you want to achieve?” Corporations approach corporate venture capital for a variety of reasons, and each reason will have different results to measure. We’ll evaluate these in two buckets: strategic rationale and financial rationale. Strategic Rationale & Results Most corporations that invest in venture capital are doing it for some strategic reason – they want to be one step ahead of the innovation in their industry, and they recognize the need to invest in collaboration with early-stage companies. Here are some strategic success metrics to consider: Strategic Fit : Assess how well the portfolio companies align with the corporation’s core business objectives. Are these investments helping to advance the company's strategic goals? A successful venture ecosystem initiative should create synergies with existing operations. Innovation Impact : Measure how venture investments contribute to the

By Kaitlyn Doyle at TechNexus Venture Collaborative