Corporate venture capital – or CVC for short – is a subset of venture capital. CVC usually comes from large corporations seeking to invest in smaller businesses which are both relevant and beneficial to the parent group. The corporation will offer funding in exchange for a share in the business, as well as offering their expertise, network and contacts.
Businesses looking for corporate venture capital funding need to prove that they can help the larger corporation via market reach, insights or innovative technology. Corporations will already be aware of successful, disruptive businesses, so these are usually the primary targets for CVC funding.
Benefits of corporate venture capital
- Reach: You can broaden the reach of your product and service
- Visibility: The CVC will convince the corporation to purchase businesses with potential. If you are an entrepreneur looking to exit your business, this can be an attractive option
- Informed investors: Alongside funding, you can also access the know-how of a big corporation and learn from its team and networks
- Contacts: From experts to partners and distribution networks, you can meet the contacts who can help you take your business to the next level
- Innovation: By working with experts, you can tap into further innovation to develop your offering