Business experimentation through corporate venture capital

Andrea Mina, Jocelyn Probert, Stan Metcalfe
Work package: 
WP 3
Publication number: 
01 April 2011

Abstract: Of the various sources of credit and debit instruments that can be used to finance enterprise and innovation, in the last few years venture capital has received the lion’s share of scholarly and policy attention. The independent venture capital model is, however, not the only one and large firms have also been involved in technology investments through corporate venturing programmes. The focus of this paper is the corporate venture capital (CVC) model, with an emphasis on direct investments in new companies as opposed to investments through external funds. On the basis of secondary (archival) and primary (interview-based) sources of information, the paper investigates the operations of a sample of major CVC units active in the European market. It aims to look beyond existing – often inconclusive – evidence of deal flow and performance to develop a fine-grained understanding of the use of CVC by major global firms. More specifically, we address 1) the rationale for the strategic vs. financial orientation of CVC investments; 2) its evolution over time; and 3) the sources of CVC advantage.

Keywords: R&D strategy, corporate venturing, learning, open innovation

JEL Codes: O32, D22, G30, L21

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