The last decade has witnessed the creation of divisions of Corporate Venture Capital (CVC) by hundreds of companies. The participation of CVC in the general ecosystem of Venture Capital (VC) has been growing and VC should no longer be associated only with financial companies. In fact, and according to the study carried out by CB Insights, in 2018 the average size of deals of CVC reached an all-time high of $26,3 million. Apparently, CVC emerges as a relevant source of entrepreneurial capital.

But the issue raises two questions: How does the nature of CVC – as a corporate investment – ​​differ from the traditional intermediary venture capital model? e What is the interest of established companies in venture capital?

First, it is necessary to clarify the concept of Corporate Venture Capital (CVC), usually defined as an equity investment by an established company in antrepreneurial venture. According to the article Making Sense of Corporate Venture Capital, the definition of CVC excludes investments made through an external fund managed by a third party, as well as more general investments of corporate venturing.

The nature of CVC differs from the traditional venture capital model, as the company seeks to maximize value for Shareholders, either in terms of financial value want in strategic value, contrary to a isolated focus on financial return. It seems that the essence of Corporate Venture goes beyond the traditional investment, since it involves the creation of structural collaborations, partnership agreements and a fantastic marriage with foreign ventures – start-ups and scale companies – benefiting the internal corporate innovation and generating mutual growth.

And we are already halfway through answering the second question – What motivates companies to invest in ventures? Previous studies report that CVC can act as an instrument for identifying potential substitutes to existing corporate offerings, such as: new products, services ou T. In the light of research results, companies have identified the following points as strategic investment objectives:

• “Acquiring knowledge of new technologies and new markets”;
• “import or enhance innovation within existing business units”; It is,
• “identify potentials acquisition opportunities".

“This is the best time ever for corporations invest in start-ups at an early stage because the cost of starting a start-up is the lowest it's ever been seen (…) we are in the key moment”. Pierre Rogers, Venture Investor and Founder of PuroTrader

Increasingly, companies are partnering with start-ups, and 2018 reflected strong growth in the Global Corporate Venture Capital. CVC groups participated in $52.95B of funding through 2.740 deals and 264 first-time CVC companies (Maersk Growth, Porsche Ventures, Coinbase Ventures, to name a few).

Google Ventures (GV) again ranked number one as the most active CVC, investing in more than 70 companies. A Salesforce Ventures was the second most active, followed by Intel Capital. When it comes to the most active investors in unicorn companies (companies valued at $1B+), the top 3 was occupied by CapitalG (GoogleCapital), GV e Dell Technologies Capital.

The sectors of internet, mobile e healthcare attracted investment from CVCs in 2018, showing an increasing number of deals and funding. With regard to emerging industries, AI, Cybersecurity e Digital Health were the trends of Global Corporate Venture Capital.

To conclude, we would like to suggest that the reader take a moment to reflect on your company's growth trajectory and how corporate finance and innovation policies are perceived in your area of ​​expertise.

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