Corporate venture capital is the least understood category of venture capital. Most venture capitalists fear -- if not despise -- corporate venture capital, while entrepreneurs are often confused about whether they should take this capital or not.
The concept of corporate venture capital is simple. A company takes a minority stake in a start-up or growth-stage company, typically, to achieve its own short-term or long-term strategic goals. The investee company, in theory, gets access to all the resources of the investing company.
The concept has been around in the U.S. and other developed countries for a long time. Quite a few of the Fortune 100 companies – Intel, Cisco, Unilever, BP – have a separate venture capital entity for such investments. In India, corporate venture capital is a relatively recent phenomenon. Local companies such as Reliance, Airtel and Future Group have started their own investment entities.
To read the full, original article click on this link: Guide to Corporate Venture Capital - WSJ.com
Author: RADEEP TAGARE
