Corporate Venture Capital Explained: How Strategic Investors Back Startups

Corporate venture capital is when an operating company — not a fund of outside investors' money — puts its own balance sheet behind a startup. The corporate writes the check for two reasons at once: it wants a financial return, and it wants something the startup has. A technology, a customer relationship, a view into where a market is going. That second reason is what separates a corporate check from a traditional one, and it cuts both ways. A traditional venture firm lives or dies on portfolio returns. A corporate investor also asks whether the deal helps its own business. If the answer stops being yes, the relationship can cool in ways a pure financial investor's never would.

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