Corporate Venture Capital Is Doing It Wrong

This story was first published in The Aleph Report.

It’s no secret that corporations are struggling to keep up with the innovation pace of the market. They’ve been trying different approaches for the past decade, some more successful than others. Corporate Venture Capital (CVC) is becoming one of the usuals. According to CBInsights 2017 report, CVC activity is growing rapidly.

Most of this activity is being driven by new funds being open. An interesting fact is that the region that’s pushing the growth isn’t the US or Europe, but Asia.

And while the share of CVC deals is still small compared to their VC counterparts, the average deal size is considerably higher for CVC than VCs.

The word that comes to mind when I read these charts is panic. Corporations are panicking and pushing hard on their innovation efforts.

The striking thing is that while CVC activity is increasing, it’s still an outlier when it comes to corporate investment. Most organizations are ramping up their investments, but they are funneling it through their corporate structures.

The increased activity and frenzy is good news for startups. With a fairly slowed IPO market, Corporate acquisitions are the next desirable thing. The fact that many organizations…