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"The Choice Between Independent and Corporate Venture Capital"
- An Entrepreneur’s Perspective

This paper examines the key differences between corporate and independent venture capital, from the perspective of the entrepreneur.


by Dr. Craig Collie

Price:    $70.00
Report format : PDF (Downloadable)
Number of pages : 24

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Report Description
Corporate venture capital and independent venture capital are currently the two main types of funding available for capital intensive start-ups, and entrepreneurs are often forced to make a decision as to which type of investor they wish to partner with.

There is some existing literature which describes the differing value-adding benefits of each type of venture capitalist, but this is believed to be the first paper to examine and compare the key benefits and risks that independent and corporate venture capitalists provide ventures, during both their development and exit.

Table of Contents:

  1. Introduction
    • 1.1 Industry structure
  2. Literature review
  3. Methodology
  4. Findings: management
    • 4.1 Expertise & input
    • 4.2 Risk of VC losing interest
    • 4.3 Credibility
    • 4.4 Plasticity
    • 4.5 Early product sales
    • 4.6 Intellectual property leakage
  5. Findings: exit issues
    • 5.1 Reduction of exit options
    • 5.2 Risk of corporate not acquiring the venture
    • 5.3 Insider knowledge on bidding price
    • 5.4 Premature exits
  6. Methods to mitigate against risks
    • 6.1 Strategy 1: Secure more than one corporate investor
    • 6.2 Strategy 2: Take funding from a CVC who has few or no strategic incentives
    • 6.3 Strategy 3: Involve a CVC who is highly autonomous from their parent company
    • 6.4 Strategy 4: CVCs not eligible to board membership
    • 6.5 Strategy 5: Avoid conditions
    • 6.6 Strategy 6: Avoid investments from an independent vc late in their fund cycle
  7. Conclusion
    • 7.1 Implications for research
  8. References

 

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