How to Set Up a Corporate VC Fund

How to Set Up a Corporate VC Fund

June 16, 2021 by investor

In setting up a corporate VC fund in your organization, consider the following:

Start with the legal structure. You can either create an LLC legal entity for the fund or move the fund inside the corporate structure.

Next, establish your investment thesis in alignment with your corporate strategic objectives.  

Build an investment structure with a team for managing deal flow, diligence, portfolio management, and other activities in running a fund.

Use traditional VC programs as a benchmark for this process.

Establish a pipeline of deals to review by setting up partnerships with funds, accelerators, and other groups launching startups that fit your thesis.

Set up syndicate partnerships with traditional VCs to fund deals they’ve completed.

Make sure you create internal communication programs to update the corporation on status and progress.

Create an external communications program to promote the fund and attract startups as well as syndicate partners.

Startups sign up to gain access to corporate partners, customers, brands, and more, so create support programs for the invested companies.  

Establish metrics to capture the results of the work. 

Traditional VCs typically use exits on funded startups.

Corporate VCs should focus on meaningful collaborations with corporate departments and partners.

 

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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.

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