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Inside Corporate VC: A Candid Look at How It Really Works
- Corporate VC involves providing cash to startups in exchange for ownership, often without added resources or assistance from the large corporation.
- Despite theoretical strategic benefits, Corporate VC often functions mainly as financial investment vehicles.
- Corporate VCs may shut down abruptly if faced with competing priorities within the corporation.
- The industry insider acknowledges the limited value most investors, including Corporate VCs, add to startups.
- Corporate VCs invested over US$100 billion in the previous year, representing a substantial portion of venture capital.
- Corporate VCs sometimes consider developing competing products or services to their portfolio companies if the opportunity is significant.
- Employees at Corporate VC funds lack personal investment and profit share, making them more flexible on negotiation terms.
- While Corporate VC offers job stability and good salaries, employees typically do not share in the profits from successful investments.
- Traditional VCs are critical of Corporate VC competition, but founders generally have positive views due to potential benefits.
- Corporate VCs face potential closure during economic downturns, as they are often considered non-essential expenses and subject to budget cuts.
- Transitioning from Corporate VC to traditional VC can be challenging, as top-tier VCs may not typically hire from Corporate VC backgrounds.
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