Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
Overall, corporate VCs invest more than traditional VCs by about 2%.
Corporate VCs operate the same as traditional VCs with some exceptions:
- Corporate VCs seek a strategic advantage rather than a financial return
- Many don’t lead funding rounds but only follow them
- They bring strategic support to the startup such as sales channels and industry partnerships
- They focus on early to mid-stage companies primarily and avoid seed-stage startups
- They invest based on the current strength of the corporation and don’t follow the traditional raise-a-fund-and-deploy-it cycle
- They don’t exert substantial control over the company, compared to traditional VCs who seek a financial return in a specific timeframe
- They don’t look for a strong financial return as the only exit option
- Corporate VCs are measured by the impact of the investment into the startup, such as number of pilots and programs rather than startup sales growth
- They don’t limit their investment horizon to the 10-ear fund cycle as a traditional VC does
- Corporate VCs access deals primarily through their partnerships rather than the general market
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