Analysis of Corporate Venture Capital from an Investor Perspective
52 Pages Posted: 29 May 2019
Date Written: April 25, 2019
Corporate venture capital (CVC) is on the rise. About 300 investments carried out by Google show the current relevance of CVC. Existing literature is focused on specific topics influencing the success of CVC and on the objectives pursued with CVC. In this paper, these factors are concluded. It is described what should be the main drivers to invest CVC. Moreover, this paper provides an answer to the question what is the best way to invest CVC, especially when it comes to structuring. It can be derived from a literature-based method that CVC is of particular importance for companies with a high need for innovation in a competitive environment. A second finding is that founding a CVC unit investing indirectly in venture capital (VC) funds first and after a certain amount of time, investing directly leads companies to success. While investing, corporate investors can use incentives in order to avoid principal-agent issues.
Keywords: Corporate Venture Capital; Chemical Industry
JEL Classification: G24
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