Startup Funding Espresso -- How to Achieve Success Running a Corporate VC Fund

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

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.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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