“Pitching corporate venture capital: Tips from TechCrunch”


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Corporate Venture Capital Funds: Steady Source of Funding in 2023

This is What Corporate Venture Capital Funds Offer Startups

Amidst the venture industry’s funding slowdown in 2022, nontraditional investors such as hedge funds and private equity firms avoided participating in venture deals. Many thought that corporate venture capital funds would follow suit; however, they continued to participate in venture deals and even increased their presence, according to PitchBook data. In 2022, CVCs participated in 26.2% of venture deals, up from 25.6% in 2021. While this may seem like a small change, it is significant as other types of crossover investors participated less in 2022 than in 2021.

While regular venture firm fundraising may not be particularly robust this year, there are signs that corporate venture capital will remain a steady source of funds in 2023. Scott Lenet, the co-founder and president of Touchdown Ventures, which helps corporations set up their CVCs, stated that the firm is getting more inquiries than ever from corporations looking to begin their fund. The last few years’ volatility has led to more funds looking to deploy capital, good news for startups. Additionally, receiving the backing of an investor who is not tied to a specific fund lifecycle in an uncertain exit environment has its appeal.

How Corporate Venture Capital Funds Benefit Startups

Corporate venture capital funds provide startups with not only financial backing but access to resources such as research and development, strategic partnerships, and business development. As part of a corporate entity, CVCs also provide startups with the opportunity to collaborate with the parent company and its subsidiaries. For startups, this can mean having access to an established business network, industry expertise, and a sizeable customer base.

Why Startups Prefer Corporate Venture Capital Over Traditional Investors

One of the reasons startups prefer corporate venture capital over traditional investors is because of the long-term benefits it offers. Corporate investors are not solely interested in financial returns; they’re interested in collaborating with startups that provide them with a competitive edge in the market. This means that corporate venture capital investors will be more patient in their investments and work to build long-term relationships with their portfolio companies.

The Difference Between Corporate Venture Capital and Traditional Venture Capital

Corporate venture capital differs from traditional venture capital in that CVCs are part of a larger company with established business networks and expertise in various industries. This means that, in addition to financial backing, CVCs can provide their portfolio companies with access to new markets, customers, and business partners. Traditional venture capital firms, on the other hand, only offer financial backing and may not have the same level of industry expertise and business network as a corporate investor.

Conclusion

In conclusion, corporate venture capital funds remain a steady source of funds for startups in 2023, despite the venture industry’s funding slowdown. Corporate venture capital funds provide startups with access to resources such as research and development, strategic partnerships, and business development, and offer benefits that traditional venture capital firms cannot. With the backing of an investor who is not tied to a specific fund lifecycle, startups can build long-term relationships with their corporate investors and collaboratively work towards success in the market.#Corporate #venture #capital #pitch #TechCrunch


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