How to Achieve Success Running a Corporate VC Fund

How to Achieve Success Running a Corporate VC Fund

June 18, 2021 by investor

Corporate VCs can leverage their position in the industry to sign up good startups with an investment.

The corporate VC brings a network of partners, distribution channels, a brand, an existing product line, and more. 

An investment can leverage their research dollars and achieve more than if they build it themselves.

The pharmaceutical industry recognized this advantage years ago and now primarily invest in funding successful biotech startups rather than doing all the research and development themselves.

This model works well where R&D is expensive and there are many potential avenues to take. 

There is a cost of setting up a corporate VC arm, but this investment can be spread across many startups.

If used extensively, it can become a core competence for the company.

To be successful at this, start with a clearly defined set of goals.

Gain commitment from the corporation.

Align the compensation of the corporate team to that of the performance of the investment.

Those companies whose growth has stalled for some time may be more open to committing to it.

Those facing a new wave of technologies may find this a better way to engage.


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Copyright (c) 2021, Hall Martin and All rights reserved.

Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.