What corporations need to know about venture investing

Corporations are constantly seeking ways to innovate, grow their core business, and defend against disruption. This foundational guide explains why venture investing has become a critical tool — covering investment thesis development, deal structure, and how to build a portfolio that delivers both strategic and financial returns.

In this ongoing series, TechNexus outlines ways corporations can stay innovative, defend against disruption, and better connect with startups. Corporations are constantly looking for ways to be innovative, to grow their core business, and to defend themselves against disruption from new or incumbent competition. Many corporations look to venture investing as a method to advance their innovation goals. In fact, nearly one in four venture capital deals so far in 2024 have included a corporate venture capital investor, according to the Pitchbook-NVCA Venture Monitor. So today, we want to discuss… what do corporations need to know about venture capital investing? First, one common question about CVC is how many corporations are doing it? Data from the World of Corporate Venturing 2024 suggests that nearly 2,300 corporations were active investors in 2023. While that is down from its peak in 2021, it still represents extreme growth from an estimated 494 active corporate investors just a decade before. Each corporate venture capital investor invests for different reasons. And a variety of structures have been tested, from balance sheet investing to traditional fund models, and special purpose vehicles to evergreen setups. What all corporate investors likely share, though, is that they have developed their unique investment thesis that they hope to execute against. At its core, venture investing is about identifying an investment thesis, and sticking to it. Early stage venture capital is a game of numbers, and portfolio diversification is key. Some investments will fail, and venture capital investors have to go into each investment knowing that this risk is real. As veteran entrepreneurs and venture capitalists know, however, “failure is not final,” and indeed, in the corporate world, the ability to try and fail new business lines is oftentimes directly related to the likelihood of a company to succeed. For example, a McKinsey survey found that organizations with the most e

By Kaitlyn Doyle at TechNexus Venture Collaborative