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Venture Capital

Corporate Venture Arms: Are They Worth It?

Nov 1, 2022
13:38

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

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