Vadim Kotelnikov    

Corporate Venture Investing in External Startups

Strategic Benefits


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Benefits of Investing in External Ventures

  • Increasing innovativeness Download PowerPoint presentation, pdf e-book. Corporate venture capital investment is associated with the creation of firm value. This relationship is most salient in certain industries, in particular, within the devices and information technology sectors. The contribution of corporate venture capital investment is strongest when it is focused on attaining a window on technology rather than purely a narrow return on investment.

2 Basic Business Growth Strategies

Value Innovation: Yin-Yang Strategies  Download PowerPoint presentation, pdf e-book

  • Cutting out own comparable research effort

  • Cementing relationships, developing external ventures as customers, marketing partners, or OEM manufacturers

  • Getting preferential treatment in areas such as pricing, distribution rights, licensing technology, or company acquisition

  • Learning and understanding new business dynamics in order to identify new market or technology discontinuities that may change current product or service requirements

  • Converting equity into cash at the start-up's IPO

Venture Investing

Investment Criteria >> Ranking by VC Firms and Business Angels

Corporate Investing Through Venture Capital Firms

Business Plan Evaluation >> Questions

Due Diligence >> Worksheet >> Checklist

Valuation    Structuring the Deal

Venture Acquisitions >> Apple >> Google

Spinouts >> Thermo Electron


Best Practices

Team and Venture Assessment by using Innovation Football

GE Equity    Nortel Telecom

Warren Buffett >> Investment Criteria >> Most Important Criteria

Why Do Corporations Invest in External Start-Ups?

3 Strategies of Market Leaders  Download PowerPoint presentation, pdf e-book

Corporations are a major - and rapidly growing - source of funds for new ventures. In today's new entrepreneurial economy, the real shareholder value is created by companies whose corporate strategies include well-developed venture strategies.

3Ws of Venture Investing

Partnership between small innovative firms and large corporation is mutually beneficial. While entrepreneurial companies can discover  technology and market opportunities and move faster to capitalize on them, they can achieve enormous leverage through technology and distribution agreements with large global corporations... More

Strategic Considerations

Strategic benefits of corporate venture investing may include:



  • Reducing the risk of missing a new turn in technological development

  • Preventing competitors from acquiring a breakthrough technology

  • Motivating internal talents to outperform outside ventures


A Strategic Investment

Corporations that have stayed the course with venture investing tend to make equity investments in innovative startup companies with strategic rather than simply financial motives. They exploit synergies between what they are doing and what the investee companies are doing. In time, they reap both strategic and financial benefits as they create actual value that in turn is translated into superior financial performance.



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