Corporate venturing- It is a concept of larger company investing in a smaller company which has growth potential. This is done through separate funds maintained specifically to invest in startups. They either develop, sponsor or invest in startups in order to create innovative products or services.It151 is not only purely financial but also helping them to develop products or services that will generate income or cost savings for both parties. Earlier, many of the companies had a venture capital fund or offer strategic alliances. Traditionally, the corporate venturing was mostly been done in the highest growth sectors.
Corporate venturing v/s Venture capital
Corporate venturing is a subset of venture capital. Corporate venturing was started due to the vast emergence of startup companies in the technology field.The main goal of corporate venturing is to gain a competitive advantage by gaining access to innovative companies which has a probability to prosper in future.Unlike Venture Capital, Corporate Venture Capital strives to achieve goals both strategically and financially.Many times this happens when they both compete for deals, but now they are believing in collaborating. Corporate venturing team gets access to the expertise, capital and business skills of the venture capital firm, while the venture capital firms can benefit from the industry expertise the corporate unit provides, as well as their capital.