Corporate Venture Capital

Abstract

The lacking innovation has stood in the way of progress of many large corporations. Over the past half-century, companies explore new ways of innovation in order to achieve a successful adaptation to changing environments. This adaptation involves external initiatives such as corporate venture capital programs, which invest in entrepreneurial companies to identify and obtain new emerging technologies from them. This operation is a manifestation not just of companies' desire for growth but also a need to defend against technological disruption and all the rapid innovation that many industries are facing today. This work examines corporate venture capital (CVC) as a model of innovation and as a tool to create value. Established corporations carry out CVC programs which invest in entrepreneurial companies to identify and obtain new emerging technologies from them. I introduce CVC concepts, including its definitions, objectives and historical framework. I also discuss the structure and organization of CVCs, depending on the corporation´s objective and resources. Moreover, I provide to the reader an introduction of the challenges faced by CVCs, focusing on the value of CVC and question whether is a viable strategic tool.