City Research Online

Abstract

is a world where almost all companies are either seeking to find, or are fearful of, the next disruptive ‘unicorn’. Global demographic and environmental change, in conjunction with “digital transformation across all sectors, increasing shareholder and regulatory scrutiny, and the heightened presence of global competitors” (EY, 2015) are amongst the ‘megatrends’ significantly impacting the strategies of large corporates.

Against this backdrop the number of Corporate Venture Capital (“CVC”) units worldwide doubled between 2012 and 2014, as corporates increasingly view CVC as part of the solution to assist them to “identify life-threatening changes to their business early, so that they can adapt or, better yet, get in on the act” (Economist, 2014).

There is general academic agreement that CVC has a positive effect on firm performance, although the studies caution that these benefits are not guaranteed and ventures may take several years to become profitable, as with any VC investment. Furthermore, recent studies provide empirical evidence to substantiate the claim that CVC-backed ventures fare better than independent venture capitalist-backed ones, as well as indicating that CVC-backed entrepreneurial ventures receive higher valuations at IPO compared to ventures funded solely by traditional VCs.

Given the growing importance of this area and the new maturity of the field (no longer just a pro-cyclical corporate ‘nice to have’) Cass Business School has carried out an interviewbased study to ascertain key questions and corporate needs to be able to answer if it is to take a first step into this high risk/high reward, but possibly essential, field.

Publication Type:	Monograph (Working Paper)
Additional Information:	© 2016 Cass Business School
Subjects:	H Social Sciences > HG Finance
Departments:	Bayes Business School > Finance

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