Case Detail

Case Summary

Technical Note: Corporate Venture Capital

Case Number: 7-115-001, Year Published: 2015

HBS Number: KEL893

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Authors: Robert C. Wolcott; Boris Bauke; Ronny Baierl

Key Concepts

Competitive strategy, Corporate strategy, Entrepreneurial finance, Financial strategy, Growth strategy, Innovation, Technology management, Venture capital

Abstract

This technical note provides a history and context for corporate venture capital (CVC) investment, or the practice of corporations making equity investments in startup companies outside their core business. The note outlines the growth of CVC, from its inception in the 1960s through its maturation today, and explores companies' motivations for making these types of investments, which typically involve a combination of both financial and strategic goals. In addition, the note explores how CVC units within companies are structured, how they evaluate and finance investment opportunities, and how they generate business value for the parent company.

Learning Objectives

After students have analyzed the technical note, they will be able to:

  • Differentiate between corporate venture capital and traditional venture capital organizations
  • Examine the reasons why a corporation might establish a CVC unit
  • Understand key factors regarding how successful CVC organizations operate
  • List the benefits of a startup receiving its funding via CVC
  • Evaluate a CVC unit’s roles and responsibilities within its parent company

Number of Pages: 15

Extended Case Information

Teaching Areas: Strategy

Geographic: Global

Industry: Investment

Year of Case: 2014